Betterment Retirement / Roth IRAs, Traditional and 401(k) Rollovers

Betterment IRA review quick take: A personalized plan built to reach your retirement goals and set on autopilot.

What is a Betterment IRA?

Betterment IRAs allow you to invest money for retirement with tax advantages. IRA stands for Individual Retirement Arrangement, a tax-advantaged account with annual contribution limits set by the IRS.

Betterment IRAs include:

• Traditional IRA: Earnings can potentially grow tax-deferred until you withdraw them in retirement.
• Roth IRA: Make contributions using after-tax dollars and earnings grow tax-free.
• SEP IRA: A simplified Employee Pension (SEP) plan allows self-employed and business owners to contribute to their retirement savings.
• Roth Conversion – Easily convert money from a traditional IRA into a Roth IRA—right within the app. It offers tax-free growth potential and tax-free withdrawal in retirement.

An IRA itself is not an investment. It’s a type of account that contains investments in the form of stocks, bonds, mutual funds, etc.

Why invest using an IRA account? Depending on the IRA, you can save taxes now with a deduction or save later with a tax-free withdrawal. You can also grow your investment account with income from interest, dividends, and capital gains. Learn more about IRAs and how they work.

Brokerage services are provided to clients of Betterment LLC by Betterment Securities, an SEC-registered broker-dealer and member of FINRA /SIPC, and Apex Clearing Corporation, a third-party SEC registered broker-dealer and member FINRA/SIPC.

How Betterment IRA Works

Betterment IRA is a robo-advisor and uses Modern Portfolio Theory to create an asset allocation mix with lower fees and diversification. It considers your risk tolerance, financial goals, and time horizon.

Depending on your unique situation and retirement goals, Betterment will suggest the right IRA for your situation and risk tolerance. This is how it works:

• Decide which IRA is best for you: Choose between a traditional, Roth, or SEP IRA. Or get help to choose the right one.
• A plan built for you: Get a recommended plan, calculate how much to save, and adjust as life changes.
• Automated tech: Robo-advisor handles all the trading, rebalancing, and dividend reinvesting.
• Minimum Investment Amount: $0 to open an account.

Get retirement advice and automated tax-saving strategies like tax-loss harvesting to help you avoid unnecessary taxes and save more for the long term.

With Betterment IRA, you can add to your retirement plan with one-time or recurring contributions up to the IRS limit.

Key Features

• Portfolio Options: Choose between the core portfolio, Goldman Sachs Smart Beta portfolios, or flexible portfolios that allow you to adjust the asset allocation mix.
• Diversification: A diversified portfolio of exchange-traded funds (ETFs) with six asset classes: large and small companies, emerging markets, government bonds, corporate bonds.
• Rebalancing: Your portfolio is auto-optimized, so your stocks and bonds ratio doesn’t drift from the suggested allocation.
• Allocation Adjustment: The portfolio auto-allocation adjusts for less risk as you near retirement age.
• Savings Reminders: Get helpful nudges to save as much as possible in your IRA each year.
• Financial Planner: Speak with financial advisors in the premium plan to discuss your overall financial goals.

Fees

Monthly fee: $4 or 0.25% annual fee

Who Is It Best For?

Betterment IRAs are best for people who do not want to manage their retirement investments themselves.

Betterment IRA Review

Betterment IRA is a legitimate service offered by Betterment, LLC, a company that has been in business for over 11 years. The robo-advisor shines with its features and transparency.

In researching Betterment IRA reviews, we learned that the app has over 49,000 reviews with a 4.7 out of 5-star rating in the App Store. However, it has a bad rating of 1.7 out of 5 on Trustpilot, with about 27 reviews, mostly from users sharing negative customer service experiences.

What we like about Betterment IRAs is having the robo-advisor do all the work albiet with a management fee. The company is transparent about it’s fees. The platform is easy to navigate making it accessible for beginners and experts alike.

Betterment offers a host of financial tools and retirement calculators. You can learn through their extensive educational resources or access human advisors.

How to Start a Betterment Retirement Account

There is no minimum age requirement to open either a traditional or Roth IRA, but you must have earned income.

Step-by-Step to Open a Betterment IRA

The time needed: 2 minutes.

1. Getting started
   • Log in to your account or click on the link to register.
2. Open an IRA account
   • Complete the signup process by answering questions like age and annual pre-tax income.
3. View portfolio recommendation
   • The core portfolio is based on your age.
4. Fund account
   • Transfer money by linking your bank account.

Betterment IRA Alternatives

Alternatives to Betterment IRAs include Acorns Later, Stash Retirement, and M1 IRA. If you’d like to choose your investments, you can look into SoFi IRA, Webull IRA, and Robinhood IRA.

For more Betterment IRA alternatives, visit the financial marketplace.

Betterment IRA FAQs

Does Betterment offer a retirement calculator?

Yes, Betterment calculators are available to registered and non-registered users. You can use a Roth and Traditional IRA calculator. With the calculator, you can learn how your investment might grow to meet your retirement planning needs.

Can I move 401(k) to Betterment?

Betterment allows you to roll over your old employer-sponsored retirement plan into a traditional IRA. After doing so, you regain control over your investment strategy, along with lower costs and financial advice.

Can I rollover my existing IRA or old 401(k) into Betterment?

You can also transfer and roll over existing retirement plans into Betterment IRAs and potentially save on management fees.

• Transfer an IRA: transfer your existing IRAs from other brokerages.
• Roll over a 401(k): Submit a request to roll over your previous employer-sponsored plan.