Investing

Three spring cleaning tips for savers Dusty, forgotten 401(k)s. IRAs left unmaxed from last year. The weeks leading up to Tax Day are a great time to get your accounts in order. Don’t look now, but Tax Day is right around the corner. We say this not to kill your vibe (promise). Temperatures are warming up, and we’ll all soon be swept up in summer fun. That’s why now’s the time to do a little spring financial cleaning. Before all the graduations, road trips, and weddings temporarily short circuit your brain’s budgeting apparatus. So pick a time, throw some music on, and consider knocking out these three essential spring cleaning tasks. 1 | Consolidate your accounts and feel the power of one BIG number Investing and savings accounts can pile up over the years and become a little like that loose change lying around your house and car. A few quarters here, a handful of dimes there. It doesn’t seem like much separately. But it adds up. 401(k)s and IRAs are no different. A couple thousand in this one, a few hundred in that one. Sometimes there’s an account you forget about every year until the tax form comes. All that splintering of your money has several potential drawbacks, especially when it comes to investing accounts: Accounts serving the same goal could have wildly different levels of risk. External accounts miss out on our Tax Coordination feature and make it harder to use our automated tax-loss harvesting without incurring a wash sale. Last but definitely least, lots of small accounts can keep you from noticing your progress and celebrating a milestone. Special milestones like $25k, $50k, or even $100,000 saved for retirement. So we encourage you to consider rolling over old 401(k)s and IRAs into one place. If you’re not in love with the 401(k) plan a previous employer offered, you can even roll that into an IRA if it’s the right call for you. At the very least, it may spare you a few forms to input come tax time. 2 | Travel back in time and save some more Maybe you set the goal of maxing out your IRA last year and fell short. But you’re flush with cash now, possibly thanks to a bonus or a big tax refund that’s on the way. You’re in luck, because the IRS essentially lets you time travel for a saver’s do-over. You have until Tax Day of this year to max out your IRA’s limit for last year. Doctor Who approves. And we make it easy in practice. While making a deposit into your IRA, just select the tax year you want the deposit to go toward. 3 | Take a fresh look at your cash goals The early days of spring are an excellent time for a quick cash gut check: Do you have enough pocketed for that family vacation? Is your emergency fund funded to a point where you feel financially secure? If your tax return came back in the red, can you comfortably cover the expense? If you answer no to any of these questions, now’s the time to reassess your cash flow and redirect it to the right spots.

How Betterment’s tech helps you manage your money Our human experts harness the power of technology to help you reach your financial goals. Here’s how. When you’re trying to make the most of your money and plan for the future, there are some things humans simply can’t do as well as algorithms. The big idea: Here at Betterment, we’re all about automated investing—using technology with human experts at the helm—to manage your money smarter and help you meet your financial goals. How does it work? Robo-advisors use algorithms and automation to optimize your investments faster than a human can. They do the heavy lifting behind the scenes, managing all the data analysis and adapting investment expertise to fit your circumstances. All you need to do is fill in the gaps with details about your financial goals. The result: you spend less time managing your finances and more time enjoying your life, while Betterment focuses on your specific reasons for saving, adjusting your risk based on your timeline and target amount. Plus, robo-advisors cost less to operate. While the specific fees vary from one robo-advisor to the next, they all tend to be a fraction of what it costs to work with a traditional investment manager, which translates to savings for you. Learn more about how much it costs to save, spend and invest with Betterment. A winning combination of human expertise and technology: Automation is what Betterment is known for. But our team of financial experts is our secret sauce. They research, prototype, and implement all the advice and activity that you see in your account. Our algorithms and tools are built on the expertise of traders, quantitative researchers, tax experts, CFP® professionals, behavioral scientists, and more. Four big benefits (just for starters): Less idle cash: We automatically reinvest available dividends, even purchasing fractions of shares on your behalf, so you don’t miss out on potential market returns. A focus on the future: Nobody knows the future. And that makes financial planning tough. Your situation can change at any time but our tools and advice can help you see how various changes could affect your goals. We show you a range of potential outcomes so you can make more informed decisions. Anticipating taxes: We may not be able to predict future tax rates, but we can be pretty sure that certain incomes and account types will be subject to some taxes. This becomes especially relevant in retirement planning, where taxes affect which account types are most valuable to you. Factoring in inflation: We don’t know how inflation will change, but we can reference known historical ranges, as well as targets set by fiscal policy. The most important thing is to factor in some inflation because we know it won’t be zero. We currently assume a 2% inflation rate in our retirement planning advice and in our safe withdrawal advice, which is what the Fed currently targets. Additional advice is always available: At Betterment, we automate what we can and complement our automated advice with access to our financial planning experts through our Premium plan, which offers unlimited calls and emails with our team of CFP® professionals. You can also schedule a call with an advisor to assist with a rollover or help with your initial account setup. Whether you need a one-time consultation or ongoing support, you can always discuss your unique financial situations with one of our licensed financial professionals Managing your money with Betterment: Our mission is to empower you to make the most of your money, so you can live better. Sometimes the best way to do that is with human creativity and critical thought. Sometimes it’s with machine automation and precision. Usually, it takes a healthy dose of both.

Three ways it can pay to automate your investing Our managed offering adds value beyond a DIY approach. Here’s how. Key takeaways Portfolio construction is just the beginning. Betterment’s automated investing is designed to help you manage risk, maximize returns, and minimize leg work. Tax-smart features help you keep more of what you earn. Fully-automated Tax Coordination and tax-loss harvesting seek out efficiencies hard to replicate by hand. Navigation helps keep your goals on track. Automated rebalancing, effortless glide paths, and recurring deposits make it easier to stay the course through market ups and downs. Peace of mind is part of the return. Automation frees up time and headspace, letting you live your life instead of worrying about your portfolio. With the arrival of self-directed investing at Betterment, you can choose from thousands of individual stocks and ETFs on your own, including the very same funds we research and select for our curated portfolios. So if you can now buy the same low-cost investments, why pay someone (i.e., us) to manage them for you? It’s a fair question, and to help answer it, it helps to understand why our portfolio construction is just the beginning of the story. It's not just the Betterment portfolio you see today, but the one you see tomorrow (and in the weeks, months, and years that follow) that captures the full value of our expertise and technology. The ongoing optimization and evolution of your portfolio, in other words, is where our automated investing really shines. Sometimes the benefits are tangible. Sometimes they’re emotional. But regardless of how you frame it, we’re constantly working in the background to deliver value in three big ways. Tax savings: keeping more of what you earn Navigation: keeping your investing on-track Calm: keeping your sanity—and your spare time 1. Tax savings: keeping more of what you earn One of the most reliable ways to increase your returns is lowering the taxes owed on your investments. And here's the first way Betterment’s managed portfolios can pay off. Our trading algorithms take tax optimization to a level that’s practically impossible to replicate on your own. Take our Tax Coordination feature, which uses the flexibility of our portfolios to locate assets strategically across Betterment traditional IRAs/401(k)s, Roth IRAs/401(k)s, and taxable accounts. This mathematically-rigorous spin on asset location can help more of your earnings grow tax-free. Then there’s our fully-automated tax-loss harvesting, a feature designed to free up money to invest that would've otherwise gone to Uncle Sam. Our technology regularly scans accounts to identify harvesting opportunities, then goes to work. It’s how we harvested nearly $60 million in losses for customers during the tariff-induced market volatility of Spring 2025. Betterment does not provide tax advice. TLH is not suitable for all investors. Learn more. It’s also a big reason why nearly 70% of customers using our tax-loss harvesting feature had their taxable advisory fee covered by likely tax savings.1 And with the upcoming addition of direct indexing to Betterment’s automated investing, our harvesting capabilities will only continue to grow. 1Based on 2022-2023. Tax Loss Harvesting (TLH) is not suitable for all investors. Consider your personal circumstances before deciding whether to utilize Betterment’s TLH feature. Fee coverage and estimated tax savings based on Betterment internal calculations. See more in disclosures. 2. Navigation: keeping your investing on-track It’s easy to veer off-course when managing your own investing. Life happens, calendars fill up, and the next thing you know, your portfolio starts to drift. When you pay for automated investing, however, you not only get our guidance upfront, you benefit from technology designed to get you to your destination with less effort. As markets ebb and flow, for example, we automatically rebalance your portfolio to maintain your desired risk level. And the “glide path” that automatically lowers your risk as your goal nears? It just happens in eligible portfolios. No research or calendar reminders needed. Our management also helps steer your investing toward a time-tested path to long-term wealth. Most of our portfolios are globally diversified so you take advantage when overseas markets outperform. And we encourage recurring deposits so you buy more shares when prices are low. Recent research by Morningstar helps quantify the value of this “dollar-cost averaging” approach. They found investors lost out on roughly 15% of the returns their funds generated due in large part to jumping in and out of the market. Betterment customers using recurring deposits, meanwhile, earned nearly ~4% higher annual returns.2 It turns out it’s easier to stay the course with a little help. 2Based on Betterment’s internal calculations for the Core portfolio over 5 years. Users in the “auto-deposit on” groups earned an additional 0.6% over the last year and 1.6% annualized over 10 years. See more in disclosures. 3. Calm: Keeping your sanity—and your spare time Our automation can save you time—two hours for each rebalance alone3—but the value of automating your investing is more than just time saved. It’s quality time spent. How much of your finite energy, in other words, are you spending worrying about your money? We can’t erase all of your anxiety, but our team and our tech can empower you to build wealth with confidence and ease, with an emphasis on the ease. 3Based on internal data for a client with one account subject to Betterment’s TaxMin methodology and no other tax features enabled. Betterment will not automatically rebalance a portfolio until it meets or exceeds the required account balance. Between market volatility and a constant barrage of scary headlines, the world is stressful enough right now. There’s little need to add portfolio optimization and upkeep to the list. That is, of course, unless you enjoy it. But many of us don’t. The majority of Betterment customers we surveyed said they hold most of their assets in managed accounts, with self-directed investing serving as a side outlet for exploration. That’s why we offer both ways to invest at Betterment. The payoff is personal Investing performance and price are often measured down to the hundredth of a percentage point. That’s “zero point zero one percent” (0.01%), also known as a “basis point" or "bip" for short. Here at Betterment, it’s our mission to make every one of the 25 bips we most commonly charge worth it. We measure our portfolio’s performance after those fees, so you see what you’ve really earned. And we don’t stop there. With direct indexing and fully paid securities lending coming soon to automated investing, you’ll get even more ways to make your money work harder.

How we make market downturns less scary And how it can benefit your investing’s bottom line. The recent round of tariffs and trade wars have roiled markets, offering the latest example of investing’s inherent volatility. The fact that market drops do happen, and happen with some regularity, means that managing them is not only possible but paramount. "It's not about whether you're right or wrong," the investor George Soros once quipped. "But how much money you make when you're right, and how much you lose when you're wrong." Mitigating losses, in other words, matters just as much as maximizing gains. And this is true for two important reasons: The bigger the loss, the more tempted you may be to sell assets and lock in those losses. The bigger the loss, the less fuel for growth you have when the market does rebound. Point A is psychological, while Point B is mathematical, so let’s take each one separately. In the process, we’ll explain how we build our portfolios to not only weather the storm, but soak up as many rays as possible when the sun shines again. Smoothing out your investing journey Imagine you’re given a choice of rides: one’s a hair-raising roller coaster, the other a bike ride through a series of rolling hills. Sure, thrill seekers may choose the first option, but we think most investors would prefer the latter, especially if the ride in question lasts for decades. So to smooth things out, we diversify. Owning a mix of asset types can help soften the blow on your portfolio when any one particular type underperforms. Our Core portfolio, for example, features a blend of asset types like U.S. stocks and global bonds. The chart below shows how those asset types have performed individually since 2018, compared with the blended approach of a 90% stocks, 10% bonds allocation of Core. As you can see, Core avoids the big losses that individual asset classes experience on the regular. That’s one reason why through all the ups and downs of the past 15 years, it’s delivered ~10% in composite annual-weighted returns after fees since its launch1. 1As of 12/31/2025, and inception date 9/7/2011. Composite annual time-weighted returns: 20.1% over 1 year, 9.3% over 5 years, and 10.1% over 10 years. Composite performance calculated based on the dollar-weighted average of actual client time-weighted returns for the Core portfolio at 90/10 allocation, net of fees, includes dividend reinvestment, and excludes the impact of cash flows. Performance not guaranteed, investing involves risk. Core’s exposure to global bonds and international stocks has also helped its cause, given their outperformance relative to U.S. stocks year-to-date amidst the current market volatility of 2025. A smoother ride can take your money farther Downside protection is all the more important when considering the “math of losses.” We’ll be the first to admit it’s hard math to follow, but it boils down to this: as a portfolio’s losses rack up, the gains required to break even grow exponentially. The chart below illustrates this with losses in blue, and the gains required to be made whole in orange. Notice how their relationship is anything but 1-to-1. This speaks to the previously-mentioned Point B: The bigger your losses, the less fuel for growth you have in the future. Investors call this “volatility drag,” and it’s why we carefully weigh the risk of an investment against its expected returns. By sizing them up together, expressed as the Sharpe ratio, we can help assess whether the reward of any particular asset justifies its risk. This matters because building long-term wealth is a marathon, not a race. It pays to pace yourself. And yet, there will still be bumps in the road Because no amount of downside protection will get rid of market volatility altogether. It’s okay to feel worried during drops. But hopefully, with more information on our portfolio construction and automated tools like tax loss harvesting, you can ride out the storm with a little more peace-of-mind. And if you’re looking for even more reassurance, consider upgrading to Betterment Premium and talking with our team of advisors.

The pitfalls of comparing portfolio returns How to take stock of your stocks (and bonds)—here, there, everywhere. Investing can feel like a leap of faith. You pick a portfolio. You deposit money. Then, you wait. Trouble is, it takes a while for compound growth to do its thing. Using the Rule of 72 and historical stock returns, it takes roughly a decade for every dollar invested to double. That’s a lot of time for second-guessing. You may peek at your portfolio returns and wonder, “Could I be doing better?” Don’t worry; it’s normal to question whether we’re making the right choices with our money. But comparing different portfolios can be tricky. Variables abound. There’s the composition of the portfolios themselves, but also their fees and tax treatments. So whether you’re sizing us up with rival money managers, or with the stock indexes you see most often in the news, we’re here to help you level set. The ABCs of apples-to-apples comparisons Let’s start with a statistic we’re quite proud of: Since its launch, our Core portfolio’s average annual return has been ~10% after fees*. Those are the returns of real Betterment customers, minus fees, and taking the timing of deposits and withdrawals out of the equation. This helps focus more on the performance of the portfolio itself. *As of 12/31/2025, and inception date 9/7/2011. Composite annual time-weighted returns: 20.1% over 1 year, 9.3% over 5 years, and 10.1% over 10 years. Composite performance calculated based on the dollar-weighted average of actual client time-weighted returns for the Core portfolio at 90/10 allocation, net of fees, includes dividend reinvestment, and excludes the impact of cash flows. Performance not guaranteed, investing involves risk. So, is 10% good? Well, it depends on the comparison. Stock indexes like the S&P 500 and Dow Jones dominate the news, but they’re hardly comprehensive. For one, they exclude bonds, a lower-yield staple of many portfolios. There’s a reason why regardless of the portfolio, we recommend holding at least some bonds. They help temper market volatility and preserve precious capital. Secondly, popular indexes also largely ignore international markets. The S&P, for example, typically represents less than half the value of all investable stocks in the world. Our globally-diversified portfolios, meanwhile, spread things out in service of a smoother investing journey. We're built for the long run, and history has shown that American and International assets take turns outperforming each other every 10-15 years. So the modest amount of international exposure in many of our portfolios means this: you're in a better position to profit when the pendulum swings the other way. Now, taking all of this to heart isn't easy. Not when the S&P returns 20% in a given year. At moments like these, it’s perfectly normal to feel FOMO when looking at the returns of your globally-hedged investing. To keep the faith, it helps to keep the right benchmark(s) in mind. Not all diversification is created equal We’re not alone in offering globally-diversified portfolios. But two portfolios, even with similar stock-to-bond ratios, can take very different paths to the same end goal. Tax optimization, market timing, and fund fees can all impact your investing’s bottom line as well. Some investors compare providers by investing a little with each, waiting a few months, then comparing the balances. This sort of trialing, however, may not tell you much. When it comes to our portfolios, you can find better comparisons in two particular ETFs that seek to track a wide swath of the market: ACWI for stocks and AGG for bonds. See how your Betterment portfolio stacks up against them in the Performance section for any goal or account. Simply scroll down to “Portfolio returns,” click “Add comparison,” and pick from the available allocations of stocks and bonds. We show your “Total return” by default at Betterment, otherwise known as the portfolio’s total growth for a given time period. You can also see this expressed as an “Annualized” return, or the yearly growth rate you often see advertised with other investments. Putting your performance in perspective Comparison may be the thief of joy, but it’s okay, prudent even, to evaluate your investing returns on occasion. Once or twice a year is plenty. The key is to steer clear of common pitfalls along the way. Like comparing your globally-diversified apple to someone else’s all-U.S. orange. Or cherry-picking a small sample size instead of a longer, more-reliable track record. It’s easier said than done. That’s why we bake more relevant comparisons right into the Betterment app. It’s also why we produce content like this. Because if there’s a silver lining to the slow snowballing of compound growth, it’s that you have plenty of time to brush up on the basics.

How we keep your Betterment account and investments safe So you can invest with peace of mind All investing comes with some risk. But that risk should be based on the market, not your broker. That’s why we safeguard both your Betterment account and your investments with multiple security measures, all so you can log in and invest or save with peace of mind. Here’s a sampling. Four ways we keep your Betterment account safe Two-factor authentication Two-factor authentication (2FA) adds an extra layer of security to your account, like an extra lock on a door. Besides your regular password, 2FA requires a second form of verification such as a code texted to your phone (good) or one served up by an authenticator app like Google Authenticator (even more secure). This helps ensure that even if someone manages to get hold of your Betterment password, they still can't access your account without a second form of verification. Encryption Every time you interact with us, whether on our website or our app, your data is protected by encrypted connections. This means that the information transmitted between your device and our servers is scrambled in a way that only we can understand. Password hashing When you create a password for your Betterment account, it's not stored in plain text. Instead, we use a process called hashing, which converts your password into a unique string of characters. This way, even if our systems were breached, your actual password would remain unknown and unusable by unauthorized parties. App passwords Connecting third-party apps to your Betterment account (or vice versa) unlocks several benefits. You can easily track your net worth on Betterment, for example. Or quickly import your Betterment tax forms to certain tax prep software. When a third-party app asks for your Betterment credentials, instead of using your regular login, we ask you to create a password specifically for that app. In the scenario the third-party app’s connection is compromised, you can easily revoke its read-only access to your Betterment account. Note that some apps may use the OAuth standard, which lets you use your regular login while maintaining a similar level of security as an app password. TurboTax is one such example. Four ways we keep your investments safe Easy verification of holdings Transparency is one of our key principles, so we make it easy to verify everything is in its right place. We not only show each trade made on your behalf and the precise number of shares in which you’re invested, we also list each fractional share sold and the respective gross proceeds and cost basis for each. You can find all this information in the Holdings and Activity tabs for each of your goals. Independent oversight We regularly undergo review by independent auditors. This means auditors reconcile every share and every dollar we say we have against our actual holdings. They also spot check random customer accounts and verify that account statements match our internal records. And they ask questions if anything is even a penny off. No commingling of funds Your funds are kept separate from Betterment’s operational funds. This means that your investments are held in your name and are never mixed with our company finances. In the unlikely event we face financial difficulties, your assets remain secure and untouched. SIPC insurance To add another layer of protection, your Betterment securities are insured by the Securities Investor Protection Corporation (SIPC). This insurance covers up to $500,000 per customer, including a $250,000 limit for cash claims. While SIPC doesn’t protect against market losses, it does provide a safety net in case of a brokerage failure. An explanatory brochure is available upon request or at sipc.org. How you can help Be on the lookout for suspicious phone calls, texts, and emails (odd-looking URLs, typo-riddled messages, etc.) and know that Betterment will never ask you for your password or 2FA code except when logging in or editing your personal information in the app. Use a strong, unique password for your account. If you receive any unexpected or suspicious communications or have questions, please email fraud@betterment.com.