The Best Retirement Plans of 2020

Fidelity: Best Overall

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Fidelity stands out as a top provider of retirement plans to large companies, small companies, and individuals. Fidelity offers 401(k) plans for large and small businesses; SEP-IRA, SIMPLE IRA, and Self-Employed 401(k) for small businesses; and individual retirement accounts including traditional, Roth, and rollover IRAs. While most people will probably manage their accounts online, Fidelity offers more than 190 retail locations for in-person help.

Unique retirement-focused offerings from Fidelity include its suite of retirement planning calculators and tools including the useful Fidelity Retirement Score, which helps you assess your retirement preparedness, and four mutual funds with no fees at all. For individual account holders, you generally won’t pay any recurring account fees or have to worry about account minimums.

Stock and ETF trades are commission-free at Fidelity as well as more than 3,400 mutual funds with no transaction fees. 

Putting it all together, Fidelity offers an excellent package of retirement accounts that can help you achieve your long-term retirement investing goals.

Charles Schwab: Runner-Up

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Charles Schwab is another major provider of corporate, small business, and individual retirement plans. Schwab offers online investment tools for both passive and active investors. That is likely to improve with the upcoming acquisition of TD Ameritrade, which will add to the suite of investment tools with the popular thinkorswim platform. If you need help in person, Schwab operates more than 360 branch locations.

Schwab accounts include commission-free online stock and ETF trades and give you access to more than 4,200 mutual funds with no transaction fees. Most self-directed retirement accounts have no minimum balance requirements and no recurring fees. Schwab also offers a robo advisor, Schwab Intelligent Portfolios, that can pick and manage your retirement account investments for you.

Schwab is best for retirement investors who want to keep fees low and either want to manage their own investments or go completely hands-off with the robo advising option.

Vanguard: Best for Mutual Funds

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Vanguard offers full corporate, small business, and individual retirement plans. A key reason for picking Vanguard over another brokerage for your retirement plan is its family of mutual funds (and ETFs). Vanguard is the second-largest asset manager worldwide, too, thanks, in large part, to its robust selection of retirement funds.

Vanguard is well-known as a pioneer in index funds, which are a type of mutual fund or ETF that mimics the performance of a major index. Because they don’t employ teams of expensive stock pickers, this type of fund generally comes with a very low cost. Vanguard charges an average 0.10% fee for mutual funds compared to an average of 0.63% industry-wide.

Vanguard charges no fees to buy or sell its own mutual funds in a Vanguard account, so fans of Vanguard funds may get the best deal holding their retirement account at Vanguard as well.

Best Robo-Advisor: Betterment

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As we briefly touched on above, a robo advisor is a type of investment account where a computer allocates your funds based on a professionally-designed portfolio. Betterment created the modern robo advisor as we know it today and remains a well-known platform in the industry. For retirement, Betterment offers IRA accounts as well as 401(k) plans for businesses.

When you sign up for a new account at Betterment, you’ll fill out a short survey answering questions about your age, finances, and retirement goals. Based on those results, Betterment will assign you to a portfolio made up of low-cost ETFs. Betterment will keep your investments in balance with your goals and investment plan automatically whether you make regular contributions or not. 

For individual IRA accounts, Betterment charges a 0.25% annual management for regular accounts ($0 minimum balance) or 0.40% for a premium account ($100,000 minimum) that includes access to a human financial advisor.

Best for Small Businesses: ForUsAll

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ForUsAll is a retirement plan provider that is also a newcomer to the industry. But they came in with fresh ideas and aggressive pricing to undercut the typical small and midsize 401(k) provider with low-fee investment choices. Advisory fees range from 0.35% of assets to 0.20% based on the size of the employer’s plan.

For employers, ForUsAll is a bargain. Businesses pay just $200 per month for plans up to $250,000 in assets and no fees for larger plans. This friendly and low-cost provider is great for independent businesses that don’t want the costs or hassles of the giant providers. And employees will be thrilled with the low fees and risk-sensitive investment options.

TIAA: Best for Teachers

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Teachers often have somewhat unique retirement needs compared to other professions. Their needs may include a pension plan, 403(b) or 457 plan. TIAA has worked with educators on retirement planning for more than 100 years. And while the company has grown in recent years to include non-retirement products and accounts outside of education, TIAA has maintained its educator-friendly plans for teachers, universities, and other schools looking for retirement options.

Employees with TIAA employer-sponsored retirement plans can choose between different investment options, which may include annuities. Small businesses and self-employed business owners can look to SEP or SIMPLE IRAs at TIAA. If you’re on your own, a TIAA IRA includes online commission-free stock and ETF trades in addition to a list of mutual funds with no transaction fees if you hold them for at least six months. If you like keeping your money in-house, TIAA also runs its own family of mutual funds.