Wealthfront IRA review quick take: A personalized plan built to reach your retirement goals and set on autopilot.
What is a Wealthfront IRA?
Wealthfront 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.
Wealthfront 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.
- Roth Conversion – Easily convert money from a traditional IRA into a Roth IRA.
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.
Your investments are insured by the Securities Investor Protection Corporation (SIPC). This coverage protects assets up to $500,000 (including $250,000 in claims for cash). It provides protection against the failure of a broker-dealer, not against a decline in the market value of your securities.
How Wealthfront IRA Works
Wealthfront Retirement builds and manages a diversified portfolio of low-cost index funds personalized for you.
- You must have an Automated Investing Account, which makes it easy to build long-term wealth by managing risk, maximizing returns, and minimizing taxes.
- Answer a few questions to get your recommended portfolio to build retirement wealth by blending opportunities in tech, clean energy, cannabis, and hundreds of other custom options.
Wealthfront Automated Investing does the following:
- Handles all the trading, rebalancing, and management to help grow your wealth long-term.
- Automatic deposits, dividend reinvestment, and tax efficiency strategies include.
With Wealthfront IRA, you can add to your retirement plan with one-time or recurring contributions up to the IRS limit.
Key Features
- Portfolio Options: Choose classic or socially responsible portfolios or customize your portfolio as much or as little as you want.
- Diversification: A diversified portfolio of low-cost ETFs in tech, crypto, clean energy, cannabis, and more.
- Rebalancing: Your portfolio is auto-optimized, so your stocks and bonds ratio doesn’t drift from the suggested allocation.
- Lower taxes: The software seeks to lower your tax bill through tax-loss harvesting.
- Allocation Adjustment: The portfolio auto-allocation adjusts for less risk as you near retirement age.
- All-in-one app: Track your progress, link other accounts, and see your net worth.
Fees
- Management fees: 0.25% a year for Automated Investing Account clients.
- Trading fees: $0 for Stock Investing Account clients.
Additional fees may apply.
Pros & Cons
Pros
- No account minimum balance requirements
- Transparent fees based on your assets under management
- Automatic rebalancing
- Tax-coordinated portfolio
Cons
- Cannot choose your own investments
- No human advisor
Who Is It Best For?
Wealthfront IRAs are best for people who do not want to manage their retirement investments themselves.
Wealthfront IRA Review
Wealthfront IRA is a legitimate service and not a scam. The robo-advisor shines with its features and fee transparency.
In researching Wealthfront IRA reviews, we learned it has a 4.8 out of 5-star rating with over 16,000 reviews in the App Store. Most reviews share the peace of mind gained from the advice, recommended portfolio, and automation features. However, it has an average rating on Trustpilot with only 8 user reviews.
What we like about Wealthfront IRAs is that the robo-advisor does all the work to help you reach your retirement goals. The ability to customize investments is a plus for those who want a bit more control.
The company is transparent about its fees. The platform is easy to navigate, making it accessible to beginners and experts alike.
How to Start a Wealthfront 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 Wealthfront IRA
The time needed: 2 minutes.
- Getting started
- Log in to your account or click on the link to register.
- Open an IRA account
- Complete the signup process by answering questions like age and annual pre-tax income.
- View portfolio recommendation
- The core portfolio is based on your age.
- Fund account
- Transfer money by linking your bank account.
Wealthfront IRA Alternatives
Alternatives to Wealthfront IRAs include Betterment Retirement, 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 alternatives, visit the financial marketplace.
Wealthfront IRA FAQs
Can I rollover my existing IRA or old 401(k) into Wealthfront?
You can also transfer and roll over existing retirement plans into Wealthfront 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.
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