Robinhood IRA review quick take: Build your own retirement portfolio or use a one-time custom recommendation.
What is Robinhood IRA?
Robinhood Retirement allows you to save and invest using tax-advantaged accounts, such as:
- Traditional IRA: Earnings can grow tax-deferred until you withdraw them in retirement.
- Roth IRA: Make contributions using after-tax dollars and earnings grow tax-free.
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.
Brokerage services are offered through Robinhood Financial LLC (“RHF”), a registered broker-dealer (member SIPC).
Open your IRA account in 2 minutes.
How Robinhood IRA Works
When you choose Robinhood Retirement, you can invest on your own or get a one-time portfolio recommendation that you can follow. However, unlike robo-advisor platforms, you must research independently and perform all the trades.
How it works:
- Decide which IRA is best for you: Choose between a traditional or Roth
- Select how you’d like to start: Do you want to transfer an existing IRA, make annual IRA contributions that count toward your limit, or both?
- Open your IRA: Fund your account and start investing.
With a Robinhood Retirement, you can add to your IRA one-time or through recurring contributions with limits set by the IRS.
Key Features
Robinhood retirement accounts include:
- Minimum Contributions: $0 minimum deposit. $0 account minimum, but you will need $1 to invest.
- Diversified portfolio: investing strategies include exchange-traded funds (ETFs) and stocks.
- Options trading: Qualified traders can trade options in a tax-advantaged account.
- Automatic contributions: Set up recurring investments weekly, twice-monthly, monthly, or quarterly.
- Security & Protection: Accounts are SIPC insured up to $500,000 but do not protect against market risks.
- Portfolio Builder: Get a complimentary one-time portfolio recommendation.
- IRA Matching: Get a 1% or 3% (for Robinhood Gold subscribers) boost on your annual contributions with matching.
Fees
- Maintenance fees: $0
- Commissions: $0
There’s no cost to open a Robinhood retirement plan. However, other fees may apply.
Pros and Cons
Pros
- No commission trading
- Invest in stocks and ETFs
- Potential tax benefits
Cons
- No tax strategy
- Limited guidance and advice
- No SEP IRA is offered
Who is it best for?
Robinhood IRA is best for investors who want to manage their own retirement accounts using an easy-to-use, low-cost platform.
Robinhood IRA Review
Robinhood IRA is a legitimate service offered by a publicly traded company ($HOOD).
In researching Robinhood IRA reviews, we learned that the app has a 4.2 out of 5-star rating in the App Store, reviewed by over 4 million users. However, it has a bad rating of 1.2 out of 5 on Trustpilot, with about 3,500 reviews, mostly from users with login issues or fund transfer delays.
We found that actively managing your retirement funds can potentially lead to bigger gains, but it also comes with increased risks. Actively trading with your retirement fund could lead to losses, especially in volatile market conditions.
How to Start Using Robinhood Retirement
Minimum Requirements
- Must be at least 18 years old
- Verifiable personal information
- U.S. citizen or resident
- Social Security number
Step-by-Step to Open a Robinood IRA
The time needed: 3 minutes.
- Getting started
- Download the app or click on the link.
- Select account type
- Submit your personal information, such as name, email, and password.
- Open an IRA
- Complete the signup.
- Fund your account
- Add money to your new brokerage account.
Robinhood IRA Alternatives
Robinhood IRA alternatives include Acorns IRA, Webull IRA, SoFi IRA, and more.
Find additional retirement accounts in the marketplace.
Robinhood Retirement FAQ
Can I rollover my existing IRA or old 401(k) into Robinhood?
You can also transfer and roll over existing retirement plans 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.
Can I withdraw from my IRA account?
You can make early withdrawals, but there are tax implications for doing so, including possible income taxes, a 10% early withdrawal penalty, and other fees. The IRS website provides more information about the taxes and penalties.
by Jason Vitug
With Robinhood, you can choose how to invest using IRAs. Whether you want to invest on your own from the start or get a one-time portfolio recommendation.
While trading tools can benefit experienced investors, they may be overwhelming or confusing for beginners, potentially leading to suboptimal performance within IRAs.