Robinhood IRA Overview & Benefits (2024)

Opening a Robinhood Retirement Account: Features, Benefits, and First Steps

After years of anticipation, I am finally off the waitlist to open my very own Robinhood retirement account. In this article, we will explore the steps to set up a Robinhood Roth IRA account, discuss its unique features, and walk through making your first investment.

Quick and Easy Setup

Robinhood has been discussing the addition of retirement accounts for years, and it's finally here. Setting up a retirement account on Robinhood's app is incredibly simple and takes only a few minutes once you're off the waitlist. Personally, it took me about six days to move from nearly half a million people ahead of me to being able to open my account.

Once you're eligible, you’ll have the option to choose between a Roth IRA or a Traditional IRA. After selecting your preferred type, you simply agree to the terms, and voilà—your account is open in less than a minute!

If you already have a retirement account elsewhere, such as Webull, don't worry. I’ll be making a separate video on how to transfer your IRA from platforms like Webull or Vanguard to Robinhood. Stay tuned for that!

Robinhood Retirement Account Features

Now that your account is open, let's talk about the unique features Robinhood’s retirement account offers.

• 1% Instant Match

One of the standout features of Robinhood’s IRA is the 1% match on your contributions. Yes, you heard that right—a match with an IRA is unheard of! While it's common to receive a match with an employer-sponsored 401(k), an IRA match is quite rare. And the best part? The match is instant.

For example, when I contributed $300 into my account, I received an instant $3 match that I could immediately use to purchase stocks.

• Recurring Investments

Robinhood allows you to set up recurring investments. You can schedule automatic investments to take place daily, weekly, or monthly, making it easier to consistently contribute to your retirement savings.

• Dividend Reinvestment Plan (DRIP)

With dividend reinvestment, also known as DRIP, any dividends you earn are automatically reinvested in the stocks from which they originated. This feature helps you grow your investments without having to manually intervene.

• Stock Lending Program

Another great feature is the Stock Lending Program, where Robinhood lends your stocks to other investors. In return, you earn money, giving you an additional income stream within your retirement account.

Making Your First Purchase

Once your account is open, it’s time to invest. You have two primary options when it comes to using your Robinhood IRA:

• Robinhood Recommended Portfolio

Robinhood offers a recommended portfolio based on factors like your income, retirement age, and risk tolerance. It generates a custom portfolio for you, which can include a mix of U.S. large and small-cap ETFs, emerging markets, and bonds. This option is ideal for those looking for a hands-off, automated approach to investing.

• Self-Directed Investing

If you're more comfortable managing your own investments, you can use your IRA just like a regular Robinhood brokerage account. For instance, I personally bought $100 worth of the S&P 500 ETF from Vanguard—a straightforward and easy process.

Final Thoughts

Robinhood’s new retirement accounts bring some exciting features to the table, especially the 1% match, which is a game-changer for IRA investors. Whether you choose a recommended portfolio or prefer to manage your investments independently, Robinhood makes it easy to grow your retirement savings.

What do you think of Robinhood's new retirement account? Will you be opening one? I'd love to hear your thoughts! And if you found this article helpful, make sure to check out my upcoming content on transferring IRAs between brokerages. Don’t forget to subscribe for more financial tips and insights!