Robinhood Retirement Now Available to All Eligible Customers
Just a few weeks after the investment app Robinhood opened a waitlist for its IRA product, today, the company announced that the feature is now available to all eligible customers. According to the FinTech, more than 1 million users who joined the waitlist had access to Robinhood Retirement prior to this latest update. Now, all customers can find the feature in the app.
Robinhood Retirement was first confirmed during an earnings call in November. This was then followed up with more details and the opening of the waitlist in December. Shortly after that, select users from said waitlist began receiving invitations to open their accounts.
With Robinhood Retirement, users have the ability to open Traditional or Roth IRAs. Then, customers can choose their own investments to hold in these accounts or can view Robinhood-recommend portfolios. These suggestions are made after users complete a short questionnaire covering their risk tolerance, time horizon, and other factors. Like with other IRAs, Robinhood Retirement contributions adhere to IRS annual limits, which, in 2023, amount to $6,500 for those under 50 years old. As Robinhood customers do make contributions to their account, they’ll be able to see how close they are to reaching this limit — although this figure does not include any other external retirement accounts that a user may hold.
On top of these core features, one big twist with Robinhood Retirement is that it offers users a 1% “IRA Match.” For each eligible contribution that users make to their retirement account, Robinhood will award them with a 1% bonus. Notably, these bonuses are considered interest and do not count toward annual contribution limits. However, in order for users to receive an IRA Match, the funds deposited must come from an external source and not a Robinhood cash account. Additionally, customers must hold deposited funds in their account for at least five years or they may forfeit (in whole or in part) the IRA Match funds they received.
In a blog post announcing the availability of Robinhood Retirement, the company’s co-founder and CEO Baiju Bhatt said, “A quiet crisis is brewing – one that faces this and the next generation. Systems are failing to catch up to the needs of how many people live and save (or don’t).” Bhatt continued, “We see an opportunity to be a part of the solution, to build products that adapt to the way work and savings will evolve, and ensure people have the tools to control their financial future – just like the way we started.”
Considering that the waitlist for Robinhood Retirement was only launched less than five weeks ago, this may well be the fastest that the FinTech has ever rolled out a new feature. Yet, that enthusiasm is understandable as it’s clear the company views this as a major expansion for the app — and one that emphasizes long-term investing versus the day-trading reputation that it’s gained in the eyes of some. As for Robinhood users, the rollout of this new platform is also a win for them as it makes it easier to save and invest for the future.
P.S., for more on the Robinhood Retirement features, you can check out Kyle’s full Robinhood Retirement review.