About Schwab Intelligent Portfolios (2024)

You can have the following account types:

• Taxable: Individual, Joint Tenant, Tenants in Common, Community Property, Custodial, Revocable Living Trust
• Tax-Advantaged: Traditional IRA, Roth IRA, Rollover IRA, Inherited IRA, SEP-IRA, SIMPLE IRA

Of course!Afterconsidering your options,you can choose a Rollover or Roth IRA account. These rollovers are as simple as contacting your former employer plan administrator or custodian and telling them you want a direct rollover of your plan assets.

Next Steps

• Complete any forms required by your plan administrator or custodian.
• Decide how you want your retirement assets distributed.
• Your Schwab rollover specialist can assist you with questions depositing funds into your Schwab Intelligent Portfolios IRA.

Tips:

• To prevent funds from being taxed, the check should be made payable to "Charles Schwab & Co., Inc., FBO (Your Name)."
• For an easy deposit, give your employer your Schwab Intelligent Portfolios IRA account number and ask them to include it on the check.
• Instruct your plan administrator or custodian to mail the check to: Charles Schwab & Co., Inc., P.O. Box 628291, Orlando, FL 32862-8291.

If you need help, give us a call at866-855-9102to talk to a Rollover Consultant. If you are currently a Schwab Plan participant, please call800-724-7526.

First, you should identify if you want to enroll ataxableortax-advantagedaccount into Schwab Intelligent Portfolios. You can see the types of accounts commonly used below. You will need to have this information when you are completing the online questionnaire to receive a portfolio recommendation.

• Taxable: Individual, Joint Tenant, Tenants in Common, Community Property, Custodial, Revocable Living Trust
• Tax-Advantaged: Traditional IRA, Roth IRA, Rollover IRA, Inherited IRA, SEP-IRA, SIMPLE IRA

To start the process,log in. Select Open Account in the left rail. You will enter the online questionnaire to build your portfolio. After you answer all the questions, you will receive a portfolio recommendation. On the next page, select Schwab Intelligent Portfolios, and you will begin the account enrollment process. You will be presented with two options—"Open a new account" or "Enroll an existing Schwab account." Select the latter. On the next page, you will have the ability to select the Schwab account you would like to enroll. Once you follow the prompts to review the appropriate disclosures, your account will be enrolled into Schwab Intelligent Portfolios, and your funds will likely be liquidated from your existing Schwab account and invested into your Schwab Intelligent Portfolios account within 3-5 days.

Note: If you are interested in a Schwab Intelligent Portfolios Premium^® account, you'll first need to enroll in a Schwab Intelligent Portfolios account, and then select "Explore Premium" in the left navigation after login.

Transactions (e.g., account closures) can take up to five business days to process. Processing times are also noted in theSchwab Intelligent Portfolios Solutions Brokerage Agreement.

You can withdraw cash at any time by logging in to your account and requesting a transfer to another Schwab brokerage or Schwab bank account, or to another financial institution. Funds will be available immediately unless the amount that you request to withdraw exceeds the cash allocation in your portfolio. If the withdrawal requires the sale of ETFs to provide the requested cash, the availability of the funds will be delayed until the sale transactions have settled. The processing and settlement takes between 4-6 business days.

After your withdrawal, your portfolio will rebalance as needed to reach its target asset allocation. Your withdrawal may also cause your account to be ineligible for tax-loss harvesting if you have enrolled in the service and your account falls below the minimum.

We are committed to keeping fees low to help you achieve your goals. It starts with not charging an advisory fee or commissions. We can do that because we earn revenue from other sources as detailed below.

• ETFs: Schwab Intelligent Portfolios invests in Schwab ETFs. This creates revenue for Charles Schwab Investment Management, Inc., a Schwab affiliate that receives management fees on those ETFs. Schwab Intelligent Portfolios^®also invests in third-party ETFs, and Schwab also receives compensation for providing shareholder services to those third-party ETFs.
• Cash: We believe cash is a key component of an investment portfolio. Based on your risk profile, a portion of your portfolio is placed in an FDIC-insured deposit at Schwab Bank. Some cash alternatives outside of the program pay a higher yield.
• Order Flow: Schwab receives revenue from the market centers where ETF trade orders are routed for execution.

No, Schwab Intelligent Portfolios has leveraged the power of technology to automate these complex tasks.

Tax-loss harvesting is available for taxable portfolios with $50,000 or more, and there are no additional fees for activating this feature in your account. You must be enrolled for tax-loss harvesting to occur.

Both Schwab ETFs™ and third-party ETFs are filtered through a carefully selected set of stringent criteria. This ensures that all ETFs chosen for Schwab Intelligent Portfolios deliver both diversity and cost efficiency.

These selection criteria help pare down more than 2,000 ETFs to the 51that could potentially be part of your Schwab Intelligent Portfolios account. So, let's examine those criteria and see how that works.

Eschewing risk.Any nonstandard ETFs are eliminated—that is, ETFs that are inverse and leveraged, actively managed, that invest only in one country, or those that have less than three monthsof history, among other factors.

Size matters.Next, all ETFs without sufficient assets under management are stripped out, because ETFs without sufficient assets are at greater risk of closing.

Monitoring consistency.Schwab Intelligent Portfolios ETFs must closely track the indexes our asset allocation models are based on. This measure is not whether the fund outperforms the benchmark, but rather the degree to which it approximates the index and is a good representation of the asset class.

Low OERs are key.Finally, the selection process focuses on ETFs with low operating expense ratios (OERs) while also meeting the size, tracking, and bid-ask spread criteria. (Source: "ETFs: What They Are and How They Can Fit Into Your Investment Portfolio," Wall Street Journal.)

After the ETFs are chosen, Charles Schwab Investment Management, Inc. (CSIM) monitors their performance quarterly. CSIM also reviews the ETF selection annually to make sure the ETFs available for Schwab Intelligent Portfolios continue to meet the criteria described above and can provide consistency and diversity.

Please visit theSchwab Intelligent Portfolios Selection Processpage for more information and a representative list of ETFs used in Schwab Intelligent Portfolios.

Asset allocation is the foundation of every well-constructed investment portfolio and is at the heart of the advice we at Schwab give when advising clients on their total portfolio. Because it is so important, we have dedicated an entire team of Charles Schwab Investment Management (CSIM)–experienced analysts to continually use state-of-the-art research and evolve our approach to creating asset allocations designed to improve outcomes for individual investors.

Learn More:
Schwab Intelligent Portfolios® Asset Allocation White Paper

The appropriate asset allocation differs from person to person depending on their situation, risk tolerance, and time frame for their investing goals. The table below shows a sample asset allocation for three individual investors ranging from aggressive to conservative.

• Investor 1: A 30-year-old who sees herself as aggressive and is saving for retirement. This investor clearly has a long investment horizon (both for starting to withdraw from this portfolio and the period over which she would need to withdraw). The primary goal is capital appreciation (growth), and her investment strategy is Global Aggressive Growth with Taxable Bonds.
• Investor 2: A 40-year-old father whose tolerance for fluctuations in his portfolio value is above average and is using this account to save for the college expenses of his 3-year-old twins. His goal is a combination of capital appreciation, income and being somewhat defensive. His investment strategy is Global Moderate Growth with Taxable Bonds.
  
• Investor 3: A tax-sensitive 65-year-old retired investor who is living off her portfolio and wants to reduce portfolio volatility. Her primary goal is to generate adequate income starting now, with some potential for capital appreciation to sustain the portfolio over a long term. Her investment strategy is Income Focused Moderately Conservative with National Muni Bonds.

Learn more by visiting thisasset allocation white paper.

Cash investments play an important role within a well-diversified portfolio and serve several purposes, including:

• Greater stability
• Liquidity
• Diversification
• Potential inflation protection

A cash allocation provides stability to help mitigate downside risk. Lower portfolio risk can help moderate downturns and keep investors focused on their longer-term goals. Cash allocations are determined according to an investor's risk profile, with the most risk-averse or short-term portfolios holding the highest levels of cash and the least risk-averse or longer-term ones holding the lowest levels of cash.

Cash in Schwab Intelligent Portfolios provides an additional layer of stability in the form of FDIC insurance of up to $250,000 per depositor, as it is "swept" into deposit accounts at Schwab Bank, where it also earns a market rate of interest for highly liquid cash investments.

An automated system monitors your portfolio closely—this includes:

• Rebalancing as needed: Your portfolio won't trade every day;however, we perform daily check-ins. When an asset class exceeds its allocated portion in your portfolio, the excess ETF shares are sold, and the proceeds are used to buy positions that have fallen below their target percentage; this keeps your portfolio consistent with your Investor Profile.
• Professional oversight: Periodic evaluations are performed to ensure that your asset allocation represents the right mix of risk and return. The ETFs included in Schwab Intelligent Portfolios are also evaluated to ensure that they continue to meet the stringent selection criteria.
• Tax-loss harvesting: If you have an account with $50,000 or more in assets, and you've elected to automate tax-loss harvesting, your account will be tracked daily for opportunities to offset capital gains by strategically realizing losses.

Every portfolio has a target asset allocation—a combination of stocks, bonds, commodities and cash determined by the investor's stated goals, risk tolerance and time horizon. Over time, however, contributions/withdrawals, gains, and losses cause your portfolio to stray from the original target and become unbalanced.

The solution is rebalancing—the act of periodically buying or selling assets to restore your portfolio to its original target allocations. Schwab Intelligent Portfolios automatically rebalances accounts thanks to an algorithm that adjusts your account when an asset class shifts above or below its target range.

Learn More:
Rebalancing and Tax-Loss Harvesting in Schwab Intelligent Portfolios

Automatic rebalancingis designed to keep your portfolio's asset allocation consistent over time so that it stays aligned with your intended risk level. When markets are calm, your portfolio may trade infrequently. But when markets are volatile, a portfolio can see multiple rebalancing trades in a short timeframe.

Also, clients with taxable accounts over $50,000 can enroll intax-loss harvestingto help offset capital gains — up to $3,000 of ordinary income, if your losses exceed your gains for the year. During the recent turbulence, tax-loss harvesting trades also surged. Remember that these trades are a silver lining to your investment losses.

Tax-loss harvesting can help offset capital gains and lower your taxable income by automatically selling an ETF that has fallen enough below the price you paid for it and replacing it with an alternate ETF in the same asset class to keep your portfolio's allocation consistent.

Periods of elevated market volatility highlight the potential benefit of tax-loss harvesting as the number of these trades have historically surged when markets turn turbulent. The goal of the Schwab Intelligent Portfolios algorithm is to maintain a portfolio that closely tracks the investor's strategic asset allocation and captures tax-deductible losses while generallypreventing wash salesin your account. As it's a complicated and time-consuming process,Schwab Intelligent Portfolios has automated this process.

Learn more:
Rebalancing and Tax-Loss Harvesting in Schwab Intelligent Portfolios

For taxable accounts, the wash sale rule is a sale and then repurchase of the same security over a 30-day period which disallows the loss for tax deduction purposes. During times of market volatility, trading increases both for account rebalancing and tax-loss harvesting purposes. Because of this, when clients adjust their risk after a trading event has occurred, there could be certain securities within their portfolio that do not trade immediately in order to comply with this tax code. However, the trade instruction remains in the account and is executed as soon as possible.

Learn more
Watch Out for Wash Sales

• Minimum amount to start your plan: $25,000
• You may open multiple accounts within your plan to meet different financial goals: $5,000 minimum per account
• For a one-time planning fee of $300, and just a $30/month advisory fee after that, you'll get access to unlimited 1:1 guidance from a CERTIFIED FINANCIAL PLANNER™ professional, a digital financial plan that provides a customized roadmap to help reach your goals, as well as interactive online planning tools.
• Commissions: None charged
• Just as if you'd invested on your own, you will pay the operating expenses on the ETFs in your portfolio, which includes Schwab ETFs. We believe cash is a key component of an investment portfolio. Based on your risk profile, a portion of your portfolio is placed in an FDIC-insured cash deposit at Schwab Bank. Some cash alternatives outside of the program pay a higher yield.See more information below.

• The one-time planning fee of $300 will be charged upon confirming your first CERTIFIED FINANCIAL PLANNER™ professional meeting.
• A $30/month advisory fee will incur 90 days after confirming your first CERTIFIED FINANCIAL PLANNER™ professional meeting, billed quarterly. The monthly fee allows you to continue to have access to a CFP^®professional, your digital financial plan, and online planning tools.

Whether you meet by phone or video chat, the CFP^®professional will review the information you entered in the online planning tool, discuss your personal situation, and create a customized Action Plan for you to follow in pursuit of your goals. Ongoing, a CFP^®professional will be available to you for annual check-ins or when your goals or needs change.

The initial meeting lasts about an hour. Check-ins last about 30 minutes.

A CFP^®professional will contact you by phone at the scheduled date and time. When logged in to Schwab Intelligent Portfolios Premium you will see a "Join Meeting" button in the Appointment Details section 15 minutes before the scheduled meeting. The button will change to "Meet Now" 5 minutes prior to the scheduled start time. You may then access the virtual meeting room. Since the CFP^®professional will contact you by phone, you do not need to connect audio in the video conference session.

If applicable, we recommend involving your partner or spouse. Also, have the documents you used to complete the online planning tool on hand for discussion during the appointment. If you connect to your financial accounts automatically, it may still be helpful to have your documents on hand. Review thechecklistso you're prepared to make the most of your appointment. You'll need:

• Investment account statements
• Recent paychecks
• Recent tax returns
• Employee retirement account information
• If applicable: Social Security statements
• Annual statement or policy summary on life insurance: type, premium, coverage expiration dates
• Basic estate planning information such as will, trust, etc.

Simply open the secure online planning tool and begin by identifying your goals. As you move through the process, you can play with different scenarios to help you see the potential impacts of your choices. You can do it all at your own pace, saving what you've entered and coming back when you're ready. For the best experience, we recommend that you:

• Involve your partner or spouse, if applicable
• Use a laptop or desktop computer
• Have access to all your financial accounts (or you can connect to your existing accounts automatically)

You can open any of these types of accounts:

• Brokerage: Individual, Joint Tenant with Rights of Survivorship, Tenants in Common, Community Property, Custodial
• Revocable Living Trust: Single Trustee, Two Trustees
• Retirement: Roth IRA, Traditional IRA, Rollover IRA, SEP IRA, SIMPLE IRA, Inherited IRA

Tax-loss harvesting is a strategy that seeks to postpone capital gains by offsetting them with capital losses. Your portfolio(s) will be monitored for tax-loss harvesting opportunities—examining not only a loss itself, but also your cost basis for tax purposes, as well as the amount of time you've held the position. You must have at least $50,000 in an individual Schwab Intelligent Portfolios account to be eligible for automatic tax-loss harvesting, should you choose to enroll.

Tax‐loss harvesting is available for clients with invested assets of $50,000 or more in their account. Clients must choose to activate this feature. The tax‐loss harvesting feature available with Schwab Intelligent Portfolios Solutions is subject to limitations which are described on the Schwab Intelligent Portfolios Solutions website and mobile application (collectively, the "Website") as well as in the Schwab Intelligent Portfolios Solutions disclosure brochure and the Charles Schwab Investment Management, Inc. disclosure brochure (the "Brochures"). You should consider whether to activate the tax‐loss harvesting feature based on your particular circ*mstances and the potential impact tax‐loss harvesting may have on your tax situation. Please read the tax‐loss harvesting disclosures on the Website and in the Brochures before choosing it. Neither the tax‐loss harvesting strategy nor any discussion herein is intended as tax advice, and neither Charles Schwab & Co., Inc. nor its affiliates, including but not limited to Charles Schwab Investment Management, Inc., represents that any particular tax consequences will be obtained. For more information please visit the IRS website at www.irs.gov.

You can withdraw cash at any time by logging in to your account and requesting a transfer to another Schwab brokerage or Schwab bank account, or to another financial institution. Funds will be available immediately unless the amount that you request to withdraw exceeds the cash allocation in your portfolio. If the withdrawal requires the sale of ETFs to provide the requested cash, the availability of the funds will be delayed until the sale transactions have settled. The processing and settlement takes between 4-6 business days.

After your withdrawal, your portfolio will rebalance as needed to reach its target asset allocation. Your withdrawal may also cause your account to be ineligible for tax-loss harvesting if you have enrolled in the service and your account falls below the minimum. If the balance across all your Schwab Intelligent Portfolios Premium accounts falls below the $25,000 minimum, you could lose access to your financial plan and a CERTIFIED FINANCIAL PLANNER™ professional.

We believe every investor deserves to work with a firm they can count on. At Schwab, our commitment to you is backed by a Satisfaction Guarantee. If for any reason you're not completely satisfied, we'll refund any eligible fee and work with you to make things right. You won't find that kind of promise everywhere. But you will find it here.