This morning, brokerage platform Robinhood opened the waitlist for its first retirement product: Robinhood Retirement is being billed as the first and only IRA with a 1% match for every contribution dollar, access to stocks and ETFs and zero commissions or account minimums (other fees may apply).
Oh, and no employer is necessary. The 1% match comes from Robinhood on every eligible contribution dollar.
Pew Charitable Trust recently found lack of access to a workplace plan is the most significant retirement savings challenge facing non-traditional workers, with 77% saying they would participate in a defined contribution savings plan if they were eligible for it.
“We believe that saving for retirement should be easy and accessible to all, and not dependent on where or how you work,” Robinhood said in a press release today.
Gig workers were definitely on Robinhood’s mind in creating the new IRA product, noting that tools that can make it easier to save for retirement—such as automatic transfers from a paycheck or contribution matching—are often not available to the gig economy which makes up as much as 40% of America’s total workforce.
Here’s how it works:
- Select an IRA. Customers can choose to invest in stocks and ETFs through either a traditional IRA or Roth IRA.
- The account lets customers build a custom portfolio through Robinhood’s tailored in-app recommendations, by choosing their own investments, or a mix of both. The signup process and onboarding flow takes a few minutes and helps customers get started right away.
- IRA Instant Deposit. Once a customer contributes, they will have access instantly to their funds to start investing, up to $1,000.
Contributions must come from an external source and the match is capped at the annual IRS limits for contributions. (For 2023, the limit on annual contributions to an IRA will be $6,500. The IRA catch‑up contribution limit for individuals age 50 and over is $1,000.) The customer must keep the funds that earned the match in the account for at least 5 years to avoid the possibility of a fee when withdrawn.
Starting December 6, people can sign up to apply for early access via a waitlist and will receive access on a rolling basis over the following weeks, with full availability in January. For customers who want early access sooner, Robinhood developed a referral program. Customers have the ability to refer a friend to the Retirement waitlist and once their friend joins, they will receive early access to a retirement account.
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Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.