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Low Cost Retirement Solutions Based On Robo-Advisors And Exchange Traded Funds

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  • Kamil Nowak

    (Nicolaus Copernicus University in Torun)

Abstract

This paper briefly analyzes American retirement system and bares its shortcomings. The post crisis economic reality, low savings rates and misguided policy changes, requires searches for new retirement solutions. Especially it’s worth to have a second look at costs of traditional retirement products. Analysis of mutual funds expense ratios and financial advisors fees proofs their significant impact on future retirement. New products based on ETFs and managed by robo advisors are the low cost alternative. The substance of this paper is cost comparison of traditional retirement products with innovative FinTech solutions. In a result of this analysis robo advisors and ETFs turned out to be definitely more cost effective, what makes investing more accessible and substantially increases future retirement.

Suggested Citation

  • Kamil Nowak, 2017. "Low Cost Retirement Solutions Based On Robo-Advisors And Exchange Traded Funds," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 6(3), pages 75-94.
    • Handle: RePEc:cpn:umkcjf:v:6:y:2017:i:3:p:75-94
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    File URL: https://apcz.umk.pl/CJFA/article/view/CJFA.2017.018/14400
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    References listed on IDEAS

    as
    1. James M. Poterba & John B. Shoven, 2002. "Exchange-Traded Funds: A New Investment Option for Taxable Investors," American Economic Review, American Economic Association, vol. 92(2), pages 422-427, May.
    2. Kamil Nowak, 2016. "Implementation Of Alternative Index Weighting To Warsaw Stock Exchange," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 5(2), pages 163-179.
    3. Alicia H. Munnell & Jean-Pierre Aubry & Caroline V. Crawford, 2015. "Investment Returns: Defined Benefit vs. Defined Contribution Plans," Issues in Brief ib2015-21, Center for Retirement Research.
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    Cited by:

    1. Austin, Rebekah E. & Dunham, Lee M., 2022. "Do FinTech acquisitions improve the operating performance or risk profiles of acquiring firms?," Journal of Economics and Business, Elsevier, vol. 121(C).
    2. Campanella, Francesco & Serino, Luana & Battisti, Enrico & Giakoumelou, Anastasia & Karasamani, Isabella, 2023. "FinTech in the financial system: Towards a capital-intensive and high competence human capital reality?," Journal of Business Research, Elsevier, vol. 155(PA).

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    Keywords

    robo advisors; ETF; retirement;
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