An individual retirement account (IRA) allows you to save and invest money for your retirement with tax advantages. A Roth IRA offers tax-free growth potential on after-tax contributions. For a traditional IRA, your investments have the opportunity to grow tax-deferred with before-tax and after-tax contributions.

Each year the IRS sets a maximum amount that you can contribute across all of your IRAs, including those outside of Robinhood. For 2023, the contribution limit is $6,500 for people under age 50, and $7,500 for people age 50 and over. You can either make a new IRA contribution that counts towards your annual limit or rollover funds from another retirement account to reinvest.

Robinhood Retirement is reimagining IRAs by offering a 1% IRA Match on eligible contributions with no employer necessary. Robinhood Retirement is giving you a match of 1% of eligible contributions without needing to have an employer plan.

Robinhood offers two different types of retirement accounts: traditional IRA and Roth IRA.

A traditional IRA saves for your retirement and gives you tax advantages. This means you may be able to deduct qualified contributions now and pay taxes later. Your contributions may be fully or partially deductible, depending on your filing status and income.

A Roth IRA allows you to contribute after-tax dollars. This means you pay taxes on contributions now with tax-free withdrawals later. Any earnings are tax and penalty free if they meet certain requirements.

For more details, see contributions to IRAs from the IRS.

The IRA Match is an extra 1% that Robinhood adds to your IRA for making eligible contributions from outside accounts, IRA transfers, or 401(k) rollovers. It’s not counted toward your annual contribution limits, and there’s no limit on the match amount you can earn.

Previously, you got matched on every external dollar you contributed. Now, you get matched on any amount from outside accounts, IRA transfers, or old 401(k)s. We’ll add 1%. No cap.

The IRA contribution limits for 2023 are $6,500 for people under age 50, which means they can earn up to $65 extra. For people age 50 and over, the limit is $7,500, which means they can earn up to $75 on top of their contributions.

For IRA contributions, you can earn the 1% match on all new IRA contributions (up to the contribution limit) from any linked external bank account.

When your IRA transfer completes, the amount of the Match is calculated based on 1% of the total of the transferred cash plus transferred securities and options, using the national market system closing price of each position transferred into the account on the trading day before when the transfer settles. Settlement occurs when the securities are posted to the account and available to trade. Note that the Match is only available for securities that successfully transfer and settle, and won’t be granted for securities that are rejected.

When your 401(k) rollover completes, the Match will be calculated based on 1% of the total rollover amount.

The IRA Match will generally be available in your account and ready to invest when your deposits are completed. Also, to avoid the possibility of an Early IRA Match Removal Fee, you'll need to keep the contributions in your IRA for at least 5 years from the date you contribute. See the IRA Match FAQ for more details about how it works.

The Robinhood IRA Match and employer 401(k) match both offer matches on contributions, but they aren't the same. For starters, the IRA Match does not count toward your annual contribution limit so you have more to invest. Also, you don't have to work for Robinhood to earn an IRA Match. In contrast, a 401(k) employer match is a contribution that an employer makes to an employee's retirement account. It is possible to have both an employer 401(k) match, and earn the IRA Match with a Robinhood IRA.

At Robinhood: stocks, ETFs, and soon you'll be able to trade options in your IRA, if eligible.

Investments have the potential to grow tax-free or tax-deferred!

For a traditional IRA, you generally pay taxes later. You'll make tax-deductible contributions (depending on income, your 401(k), and if you qualify) and investments have the opportunity to grow tax-deferred. Learn more about IRA deduction limits from the IRS.

If you need the money before you turn age 59 ½, you'll pay a 10% penalty on top of the expected income taxes you'd owe. Withdrawals after reaching age 59 ½ are generally taxed as ordinary income. Required minimum distributions begin at age 73. In certain IRS-approved situations, you may take early withdrawals from an IRA with no penalty. Learn more

For a Roth IRA, you pay taxes upfront. You'll make after-tax contributions and any potential earnings can grow tax-free. Please note, Roth IRA contributions may be limited based on your filing status and income.

Note: Withdrawals of Roth IRA contributions are always tax and penalty free. However, any earnings withdrawn could be subject to both taxes and penalties, unless you've reached age 59½ and met the 5 year holding period requirement or you meet a qualifying exception.

For tax advantage details, see the IRS website or consult with a tax advisor for information specific to your situation.

Yes, you'll be able to rollover old retirement accounts, like a 401(k) or 403(b), into Robinhood IRAs.

A portfolio is a group of investments, and each recommended portfolio includes 5-8 exchange-traded funds (ETFs) that we choose for you with an algorithm-based investment process we built. Our process uses your answers to our questions to match you to a portfolio that makes sense for you.

Disclosures

Funds being contributed into or distributed from retirement accounts may entail tax consequences. Contributions are limited and withdrawals before age 59½ may be subject to a penalty tax.

All investments involve risk and loss of principal is possible. Contents provided are for informational purposes only and do not constitute tax or investment advice. For specific questions, you should consult a tax professional. Links to third party sites are being provided for informational purposes only.

Investors should consider the investment objectives, risks, and charges and expenses of any Exchange Traded Product (ETP), including any Exchange-Traded Fund (ETF) and any Exchange-Traded Note (ETN), carefully before investing. The prospectus and, if available, the summary prospectus contain this and other information about the ETP and should be read carefully before investing. For a current prospectus, customers should visit the relevant ETP's details page to access a link to the prospectus.