Maximize Your Wealth with Empower (Formerly Personal Capital): A Complete Guide to the Financial Management App

In today’s fast-paced world, effective financial management is crucial to maximizing your wealth and securing your future. Thankfully, there are tools like Empower (Formerly Personal Capital) that make it easier to keep track of your finances, optimize your investments, and plan for the future. In this comprehensive guide, we’ll explore how Empower can help you gain control of your financial life and achieve your financial goals. From understanding the basics of the app to utilizing its advanced features, we’ll delve into how this powerful financial management app can make a significant difference in your wealth-building journey.

On August 18, 2020 Empower Retirement announced its acquisition of Personal Capital, one of the first digital investment managers and our best robo-advisor for portfolio management. On February 16, 2023 the company name officially changed to Empower.

I. Introduction to Empower

A. What is Empower?

Empower is a leading financial management app designed to help individuals take control of their financial lives. It offers a suite of tools that enable users to track their expenses, monitor their investments, and plan for long-term financial goals. By consolidating financial information from various accounts into one platform, Empower provides users with a comprehensive view of their financial health, allowing them to make informed decisions about their wealth management.

B. Benefits of using Empower for financial management

There are numerous advantages to using Empower for financial management, some of which include:

1. Comprehensive financial overview: By aggregating your financial data in one place, Empower offers a holistic view of your assets, liabilities, and net worth.
2. Effective budgeting and expense tracking: With its user-friendly interface, Empower simplifies the process of tracking and categorizing expenses, enabling users to stick to their budgets and make smarter financial decisions.
3. Robust investment management tools: Empower’s investment tools help users assess their portfolio performance, minimize fees, and optimize their investments for long-term growth.
4. Retirement planning: The app’s retirement planner helps users visualize their financial future and develop a plan to reach their retirement goals.
5. Access to financial advisors: Personal Capital offers access to certified financial planners for users seeking personalized advice and guidance on their financial journey.

C. The importance of financial management in wealth building

Effective financial management is critical to building and preserving wealth. By tracking expenses, managing investments, and planning for the future, individuals can make more informed decisions about their finances and ensure they are on the path to achieving their financial goals. Empower’s suite of tools empowers users to take control of their financial lives, helping them maximize their wealth and secure their financial future.

II. Getting Started with Empower

A. Creating an account

1. Visit the Empower website or download the app: To get started with Empower, visit their website (www.personalcapital.com) or download the app on your iOS or Android device.
2. Sign up for a free account: Click on the “Get Started” or “Sign Up” button and provide your email address, create a password, and enter your mobile phone number.
3. Verify your account: Empower will send a verification code to your mobile phone number. Enter the code to verify your account and complete the registration process.

B. Linking your financial accounts

1. Add accounts: Once your account is set up, you can begin linking your financial accounts (e.g., bank accounts, credit cards, loans, investment accounts) by clicking on the “Add Account” or “+” button.
2. Search for your financial institution: Type the name of your bank, brokerage, or other financial institutions in the search bar and select it from the list.
3. Enter your login credentials: Provide your online login credentials (username and password) for each financial institution. Personal Capital uses bank-level security to protect your data.
4. Complete the linking process: The app will automatically import your financial data and sync your accounts. This may take a few minutes, depending on the number of accounts and the complexity of your financial situation.

C. Navigating the dashboard

The Empower dashboard provides a comprehensive overview of your financial situation. Here are the main sections to help you navigate the dashboard:

1. Net Worth: The net worth section displays your total assets and liabilities, giving you a snapshot of your overall financial health.
2. Cash Flow: This section helps you monitor your income and expenses, allowing you to identify trends and areas for improvement.
3. Portfolio: The portfolio section provides detailed information about your investments, including performance, asset allocation, and fees.
4. Retirement Planner: This tool helps you assess your current retirement savings and determine the steps you need to take to achieve your retirement goals.
5. Banking & Credit: Here, you can track your bank accounts, credit cards, and loans, ensuring that you stay on top of your financial obligations.
6. Tools & Resources: This section offers a variety of financial calculators and educational resources to help you make informed decisions about your finances.

By familiarizing yourself with the Personal Capital dashboard, you’ll be better equipped to monitor and manage your financial life effectively.

III. Budgeting and Expense Tracking

A. Categorizing transactions

1. Automatic categorization: Empower automatically categorizes most transactions based on the information provided by your financial institutions. This helps you understand where your money is going and how your spending aligns with your budget.
2. Manual categorization: If a transaction is not categorized correctly, you can edit the category manually by clicking on the transaction and selecting the appropriate category from the dropdown menu.
3. Custom categories: You can create custom categories if the existing ones do not fit your needs. This allows for a more personalized budgeting experience and accurate tracking of your expenses.

B. Setting up a budget

1. Determine your monthly income: Calculate your total monthly income, including salary, bonuses, rental income, and any other sources of revenue.
2. Identify your expenses: Review your transactions in Empower to understand your spending habits and identify recurring expenses.
3. Create a budget: Based on your income and expenses, create a monthly budget that allocates funds to various categories such as housing, groceries, transportation, savings, and entertainment.
4. Input your budget in Empower: In the “Cash Flow” section, you can input your budget for each category to help monitor your spending and ensure that you are staying on track with your financial goals.

C. Monitoring your spending habits

1. Review your transactions regularly: Check your transactions in Empower regularly to ensure they are correctly categorized and accurately reflect your spending habits.
2. Compare actual spending to your budget: Use the “Cash Flow” section to compare your actual spending to your budget, identifying any areas where you may be overspending or underspending.
3. Track progress over time: Empower allows you to view your spending habits over time, helping you recognize patterns and trends that may impact your financial goals.

D. Identifying areas for improvement

1. Analyze your spending habits: Review your spending habits to identify areas where you can reduce expenses and redirect funds towards your financial goals.
2. Set realistic goals: Establish realistic short-term and long-term financial goals that align with your overall financial plan.
3. Adjust your budget as needed: Make adjustments to your budget based on your spending analysis and financial goals, ensuring that you are continually working towards maximizing your wealth.
4. Monitor your progress: Regularly assess your progress towards your financial goals, making adjustments as necessary to stay on track and achieve financial success.

IV. Investment Management

A. Analyzing your investment portfolio

1. Portfolio overview: Empower provides a comprehensive overview of your investment portfolio, including the performance, asset allocation, and sector breakdown. This information helps you understand the strengths and weaknesses of your investments.
2. Historical performance: Review your portfolio’s historical performance to identify trends and understand how your investments have performed over time.
3. Asset allocation: Evaluate your asset allocation (stocks, bonds, cash, etc.) to ensure it aligns with your risk tolerance and investment goals. Empower provides a visualization of your current allocation and compares it to your target allocation.

B. Risk assessment and diversification

1. Risk assessment: Empower’s risk assessment tools help you understand the level of risk associated with your investments, enabling you to make more informed decisions about your portfolio.
2. Diversification: Ensure that your portfolio is well-diversified across different asset classes, sectors, and geographic regions to mitigate risk and optimize returns. Personal Capital’s tools can help you identify areas where your portfolio may be over-concentrated or lacking diversification.
3. Rebalancing: Regularly review and rebalance your portfolio to maintain your target asset allocation and risk profile.

C. Fee analyzer for minimizing costs

1. Identify fees: Empower’s fee analyzer helps you uncover hidden fees associated with your investment accounts, such as mutual fund expense ratios, account management fees, and trading costs.
2. Compare fees: Compare the fees you are paying with industry benchmarks to determine if you are overpaying for your investments.
3. Minimize costs: Consider adjusting your investment strategy to minimize fees and maximize returns. This may involve switching to lower-cost investment options or negotiating fees with your financial advisor.

D. Retirement planner for long-term financial goals

1. Set retirement goals: Establish your desired retirement age, income, and lifestyle to determine how much you need to save for retirement.
2. Input your information: In the retirement planner tool, input your current financial information, including your income, savings rate, and investment portfolio.
3. Project your financial future: Empower’s retirement planner uses your financial data to project your future net worth, retirement savings, and likelihood of achieving your retirement goals.
4. Adjust your strategy: Review your retirement plan projections and make adjustments as needed to ensure you are on track to achieve your long-term financial goals. This may involve increasing your savings rate, adjusting your investment strategy, or working with a financial advisor to develop a comprehensive retirement plan.

V. Wealth Building Strategies with Empower

A. Utilizing the Empower Cash account

1. High-yield savings alternative: Empower Cash is a high-yield cash account that can serve as an alternative to traditional savings accounts. It offers a competitive interest rate to help your money grow over time.
2. Emergency fund: Use the Empower Cash account to build and maintain an emergency fund, which can cover unexpected expenses and provide a financial safety net.
3. Short-term savings goals: Utilize the Empower Cash account for short-term savings goals, such as vacations, home improvements, or other planned expenses, where you want to keep your funds easily accessible.

B. Tax optimization strategies

1. Tax-loss harvesting: Empower’s tools can help you identify opportunities for tax-loss harvesting in your investment portfolio, which involves selling underperforming assets to offset taxable gains and reduce your overall tax liability.
2. Asset location: Strategically allocate your investments between taxable and tax-advantaged accounts (such as IRAs or 401(k)s) to maximize tax efficiency and optimize your returns.
3. Tax-efficient investments: Consider investing in tax-efficient assets, such as index funds or municipal bonds, to minimize the tax impact on your investment returns.

C. Planning for major life events (e.g., buying a home, college savings)

1. Home purchase: Empower’s tools can help you determine how much house you can afford, estimate your mortgage payments, and create a savings plan for a down payment.
2. College savings: Use Empower to project the future cost of college education and develop a savings plan using tax-advantaged accounts like 529 plans or Coverdell Education Savings Accounts.
3. Life insurance and estate planning: Empower can help you evaluate your life insurance needs, estimate potential estate taxes, and identify strategies for wealth preservation and transfer.

D. Leveraging Empower’s financial advisory services

1. Access to certified financial planners: Empower offers access to certified financial planners (CFPs) who can provide personalized advice and guidance based on your unique financial situation and goals.
2. Comprehensive financial planning: Work with a financial advisor to develop a comprehensive financial plan that covers areas such as investment management, retirement planning, tax strategies, and risk management.
3. Ongoing support and advice: Benefit from ongoing support and advice from your financial advisor to help you stay on track and make adjustments to your financial plan as your circumstances change.
4. Fee structure: Empower’s financial advisory services operate on a tiered fee structure based on your account balance. Evaluate the fees associated with these services to determine if they align with your needs and financial goals.

VI. Security and Privacy Considerations

A. Protecting your data with Empower

1. Encryption: Personal Capital (Empower) uses bank-level encryption to secure your data both in transit and at rest, ensuring that your financial information remains protected.
2. Read-only access: The app establishes a read-only connection with your financial institutions, which means that no transactions can be initiated or executed through Empower. This limits the risk of unauthorized access or fraudulent activities.
3. Regular security audits: Empower undergoes regular third-party security audits to maintain the highest security standards and ensure that your data remains protected.

B. Ensuring secure access to your accounts

1. Two-factor authentication (2FA): Personal Capital employs two-factor authentication to verify your identity when you log in to the platform. This provides an additional layer of security and protects your account from unauthorized access.
2. Strong, unique passwords: Create strong, unique passwords for your Personal Capital account and your linked financial accounts to minimize the risk of unauthorized access.
3. Account monitoring: Regularly review your linked financial accounts for any suspicious activity or unauthorized transactions. If you notice anything unusual, report it to your financial institution and update your login credentials as necessary.

C. Staying informed about potential threats

1. Stay updated on security best practices: Regularly educate yourself about cybersecurity best practices and implement them to protect your financial accounts and personal information.
2. Beware of phishing attempts: Be cautious of emails or messages claiming to be from Empower or your financial institutions that request your login credentials or personal information. Always verify the source before providing any sensitive information.
3. Keep your devices secure: Ensure that your devices are protected with up-to-date antivirus software and security patches. Also, avoid using public Wi-Fi networks when accessing your financial accounts to minimize the risk of unauthorized access.

VII. Conclusion

A. Recap of the benefits of using Empower for financial management

Personal Capital offers a comprehensive suite of tools that enable users to take control of their financial lives. By consolidating financial information from various accounts into one platform, users can effectively track expenses, monitor investments, and plan for long-term financial goals. Some of the key benefits of using Personal Capital for financial management include:

1. Comprehensive financial overview
2. Effective budgeting and expense tracking
3. Robust investment management tools
4. Retirement planning assistance
5. Access to certified financial planners

B. How Empower can help you maximize your wealth

By providing a holistic view of your financial situation, Personal Capital empowers you to make informed decisions about your wealth management. The app’s features enable you to create and maintain a budget, optimize your investments, minimize fees, and plan for long-term financial goals such as retirement. With the help of Personal Capital, you can identify areas for improvement, implement effective wealth-building strategies, and maximize your financial potential.

C. Encouragement to take control of your finances and build a secure financial future

Achieving financial success and building wealth requires dedication, discipline, and effective management of your financial resources. By leveraging Empower’s powerful tools and resources, you can take control of your finances, make more informed decisions, and create a solid foundation for a secure financial future. Start your journey toward financial freedom today by exploring the many features and benefits that Personal Capital (Empower) has to offer.

History of Empower

Empower was created in 1891, when parent company Great-West Lifeco was founded as an insurance provider on the Canadian prairie. After serving more than a century of expansion and a profound evolution of service offerings, the modern iteration of Empower was launched in 2014, when the retirement businesses of Great-West Life combined the record-keeping services of Great-West Financial, JPMorgan Chase, and Putnam Investments. Part of Great-West Life & Annuity Insurance Company, Empower is an indirect wholly owned subsidiary of Great-West Lifeco(TSX: GWO). Empower is led by President and CEO Edmund F. Murphy III.

In 2019, Empower signed a 21-season contract to the naming rights of the Denver Broncos stadium, named Empower Field at Mile High.

In June 2020, the company announced its acquisition of Personal Capital, an investment and wealth management adviser, for $825 million. As of June 2020, Empower has administered more than $1.0 trillion in assets for 12.0 million individuals over 67,000 Organization retirement plan participants. In September 2020, the company also acquired the retirement plan business of MassMutual for $4.4 billion.

Empower acquired the heritage SunTrust 401(k) recordkeeping business, which includes approximately 300 retirement plans consisting of more than 73,000 plan participants and $5 billion in plan assets.

On September 29, 2020, Empower announced that it would acquire the retirement plan recordkeeping business of Fifth Third Bank.

February 1, 2022, “Empower” replaced “Empower Retirement” as the company’s public-facing brand name.

April 4, 2022 Empower acquired Prudential’s full service retirement.