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Online Financial Planning: The Chilling Thing I Found Out About My 70th Birthday

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Retirement plans are like sausage. I want mine to be fat and juicy, and until recently I really didn't care how it was made. But then I got a peek at the recipe, and suddenly I had opinions about how it was put together.

On Tuesday, LearnVest, a financial budgeting platform and lifestyle website aimed at women, launched low-cost financial planning services to help demystify the ingredients that go into investing and retirement plans for individuals.

LearnVest joins other online financial advisory websites such as Personal Capital and FutureAdvisor that also aim to increase transparency and decrease the costs of financial planning. These new online advisers take slightly different approaches, but they all have one thing in common: Each aims to disrupt the brick-and-mortar financial planning industry and make planning services cheaper and more accessible to the masses.

I recently took these advisers for a test drive and put my Roth IRA and 401(k) (both happen to be with Fidelity) through their number-crunching programs to see what kind of advice I'd get.

What I found was both dreadful and hopeful: My vision of a plump retirement sausage at age 70 has been officially revised to look like mini hot dog. I pay too much in fees, I undersave, overspend, and a one-third of my meager investments are potentially misallocated based on my age, income and savings profile, according to FutureAdvisor.

It's hopeful because I actually have time -- and a little more knowledge -- to do something about my investments by the time I'm cruising around Florida with a walker in 2050.

I first looked at Personal Capital, launched in 2011 and created by Bill Harris, the former CEO of Intuit and PayPal. The site doesn't actually offer much on the website for a small-beans investor like myself. One needs $100,000 in aggregated investment accounts to get access to a personalized -- e.g., human -- financial adviser. The fees are just under 1 percent of your investments, which is lower than the typical 2 to 2.5 percent traditional investment advisers charge.

But the website's free service does provide at least one eye-opening piece of data: After you plug in your investment accounts, it shows you the amount you're paying in fees for them. Turns out I am paying around $59 in fees every year for my company's 401(k) at Fidelity, which comes out to an expense ratio of around .75 percent -- significantly higher than the recommended ratio of around .55 percent. (An expense ratio is the cost to run the fund.) By Personal Capital's calculation, I stand to lose four years of retirement savings in fees alone when I retire at 70 if I stay with this particular plan.

Next I went to the FutureAdvisor website, which was created by former Microsoft engineers and launched earlier this year. It offers a substantially deeper dive than Personal Capital on investment analysis as part of its free service. A premium service is still in beta mode.

I plugged in my fantasy retirement goal -- again to retire at age 70 with a healthy income of $60,000 -- along with my current savings. FutureAdvisor plotted a course of action for me: It told me I need to save at least $983 a month to get to my goal. Working with something like a glorified retirement calculator, the biggest beef I had with this recommendation is that the figure is a nice target, but it has little to do with my current actual living expenses. The site's 401(k) fee analyzer also had the same conclusion about fees as Personal Capital: I am paying too much.

FutureAdvisor also offered me a detailed breakdown of how an investor with my profile should be behaving: Fewer domestic stocks, more emerging markets and REITs, and fewer bonds. In other words: Go for the growth.

Lastly, I played around with LearnVest's updated platform that launched this week under the company's new designation as a registered investment adviser. LearnVest said it plans to have more than 50 certified financial planners on staff by the end of the year.

The new services build on LearnVest's existing Money Center tool, a free budgeting tool and money management service. But getting more substantial advice will cost you something: The three tiers of services range in price from $89 for the Budget Starter, $349 for a Five-Year Planner, and up to $599 for the Portfolio Builder, aimed at helping a customer build a long-term investment portfolio and including multiple check-ins with a live financial planner. The cost is substantially lower compared to traditional planners' prices, which can range from $150 to $300 per hour.

I accessed the free budgeting services on LearnVest, which didn't tell me much that I didn't already know (like I am spending too much money eating at restaurants). However, the site does nudge you through a diagnostic financial survey for a free phone call with a financial planner. If you're hoping for free advice, you won't get much other than the nuggets scattered throughout the content on the site -- like don't spend more than 30 percent of your income on lifestyle costs.

All of the site's new pay services include the assistance of a live financial planner, who will offer budgeting or investing advice, risk tolerance analysis and portfolio recommendations. Without doing a one-on-one session, I can't say whether the services are worthwhile for the fees. But the financial planning services may provide a level of hand-holding that is reassuring if you're just getting started investing or making long-term financial plans.

After the tour through these three sites, I have not changed my investments to lower-fee accounts as suggested by two of them, but the idea has been officially planted. I also feel more confident to take a little more risk and invest more aggressively for now.

FutureAdvisor appears to have the most promise for both beginning and advanced investors. Its free services are robust, though you will need to take some initiative to learn pieces of the investing vocabulary and be confident to make your own decisions based on what you learn. LearnVest's promise to bring financial planning to the masses is appealing, and I look forward to learning more.

Even if you're not planning on becoming an active investor, taking a look under the hood of your investments is very worthwhile. At least when you complain about your banking fees in the future, you'll know how much you're actually complaining about when it comes to your 401(k).