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After blowing up on the financial scene amid the memestock frenzy and attracting hordes of investors at the beginning of the pandemic lockdown, trading platform Robinhood has started offering personal retirement accounts and giving investors 1 of their donations. Provides a “match” for %.
The announcement from Robinhood focuses on those working in the new gig economy. They are not eligible for traditional workplace exit services such as 401(k) accounts and are responsible for developing their own exit strategies.
“People are relying on themselves,” said Robinhood.com’s announcement. “They do gig work, side jobs, and start their own companies. Tools that facilitate retirement savings, such as automatic payroll deductions and matching donations, are often not available in the gig economy. It’s increased to 40% of his total workforce.”
Robinhood will provide instant matches for donations from linked external bank accounts, but not for rollovers from other IRA or 401(k) workplace trading accounts. However, in order to maintain a match, the customer must keep the money received in the matching donation in the Robinhood IRA for at least five years.
For additional help deciding how to invest for retirement, consider a free consultation with a vetted financial advisor.
Should I put my money in a Robinhood IRA?
With the IRS cap set at $6,500 for 2023 IRA contributions, investors who maximize their contributions will earn an additional $65 annually from Robinhood games. Investors over the age of 50 may make an additional $1,000 catch-up contribution.
Clients can invest in individual stocks and ETFs for the IRA, but not in cryptocurrencies. A traditional tax-deferred IRA allows investors to receive tax deductions on their contributions, but still pay taxes on the principal and benefit when they withdraw the money when they retire. At the Roth IRA, donations are made after tax and all withdrawals are tax-free. Investors can choose individual stocks or ETFs to build a portfolio, use recommendations from the app itself, or a combination of both.
The long-term nature of retirement savings seems at odds with the app-based Robinhood image of young investors moving in and out of meme stocks like GameStop and AMC theater chains. But Robinhood says most of its customers are buy-and-hold investors. But as the memestock craze fades, those customers are dwindling. According to The Wall Street Journal, “His average daily retail trades for stocks and options on Robinhood in October were down 36% from the same month last year.” At the moment, Robinhood itself is profitable. Is not …
Signups for the Robinhood IRA opened on December 6th, but you can apply for early access by signing up via our waiting list, and then receive access on a rolling basis over the next few weeks. The account will be fully available in January. During this time, it is common for an investor to make contributions to his IRA to relieve the previous year’s tax liability, as long as he makes contributions to his IRA by his April tax filing deadline.
Robinhood customers who want immediate access can refer a friend to the IRA waitlist to receive early access to their retirement account.
Conclusion
Robinhood, an investment platform that has made a name for itself among retail investors amid the memetic stock craze, offers IRAs and Roth IRAs at a 1% match. Of course, given that he has a $6,500 limit on contributions to the IRA, it only adds $65 a year to his contributions. To help you make decisions about your retirement plans, consider a free consultation with a vetted financial her advisor.
Retirement preparation tips
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Industry experts say that people who work with a financial advisor are twice as likely to reach their retirement goals. Finding a financial advisor is not difficult. SmartAsset’s free tool matches you with up to 3 vetted financial advisors serving your area and allows you to interview advisor matches for free to determine which advisor is right for you. increase. If you’re ready to find an advisor who can help you reach your financial goals, get started now.
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If you want to set goals and plan for retirement, SmartAsset’s Retirement Calculator can help you calculate how much savings you need to retire comfortably.
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Another easy way to save for retirement is with Employer 401(k) Matching. SmartAsset’s 401(k) calculator helps you calculate how much assets you have based on your annual contributions and employer match.
Photo credit: ©iStock.com/Luke Chan, ©iStock.com/designer491
Should I take advantage of Robinhood’s 1% match for IRAs and Roth IRAs? First appeared on the SmartAsset blog.
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