Your Betterment investment can be easily divided into different segments or sub-accounts called “goals”. Goals can be designated for different purposes, each with its own portfolio, target balance, time horizon, and deposit/withdrawal schedule. Goals allow you to save and invest for multiple things at the same time while customizing the investment needs for each one.
To create a new goal, simply click the "Add Account" button on the summary page of your account and follow the instructions.
Some popular goals are:
- Safety Net: Grow your savings to cover 3 to 6 months of unplanned expenses in a conservatively-invested portfolio. Safety net goals have a fixed stock recommendation at 40%, to balance the need to retain value in drawdowns with the desire for inflation-beating growth.
- Retirement: Invest long-term for the savings you plan to spend in retirement. Please note this account is NOT a Roth or Traditional IRA. The allocation is set to glide to a more conservative risk level as you get closer to your retirement age.
- General Investing: This is an excellent goal type for unknown future needs or money you plan to pass on to future generations. The recommended allocation for this type of goal defaults to a target based on your age, but the recommendation will adjust itself as you update the time horizon on the Advice page of your account.
- Major Savings: Save for big purchase goals, (e.g., a down payment for a home, tuition or other big goal). This goal has a specific target date and target amount, and we give advice that follows a tailored glide path to a nearly zero-risk portfolio right when you want the money.
*Depending on the goal you choose, we factor in the amount of your initial deposit (and frequency of scheduled auto-deposits) and your age or time horizon to arrive at specific suggestions that will keep you on track to meet your goal. The allocation recommendation for each goal is designed to take on the optimum amount of risk to optimize for expected returns.
As you get closer to your goal, we continue to provide updated advice to balance risk and reward. If you fall off-track, we will advise you on the best way to get back on track to reach your goal on the advice page of your account.
Your Betterment pricing plan is always based on the sum of your account balance across goals.
Read more about goal-based investing in our resource center: