IRA Match growth potential

To help you visualize the effects of compound interest on your potential IRA returns over time, we used a hypothetical annualized rate of return of 8% for your invested IRA Match.

Keep in mind, your actual returns will vary and may be less than what’s shown in the following example of potential growth of only your IRA Match over the next 45 years. It’s important to remember that your returns are not guaranteed and this illustration is hypothetical. Review Disclosures for more details about your risks.

IRA Match Growth potential image

Copy link to clipboard

Example calculation

You can use this formula calculator to project how your IRA Match might grow over time with the following formula and assumptions:

  • Formula: Initial investment ($0) + Monthly IRA Match amount ($5.41) * Length of time (45 years) * Interest rate (8%) with an Interest rate variance of 0 and Annual compound frequency = Potential total retirement savings just for the 1% match

  • Hypothetical and other assumptions:

    • You contribute $6,500 to your IRA each year. In the formula example, you’d divide it by 12 months for the $541 per month or a $5.41 match.
    • You earn a 1% IRA Match every year, which would be 1% multiplied by $6,500 equals $65 each year or in the example, $5.41 a month.
    • You invest your full IRA Match amount and earn an average of 8% each year over 45 years.
    • This calculation assumes $6,500 is the maximum IRA contribution limit and doesn’t account for potential changes to contribution limits in the future. It also doesn’t account for catch-up contributions where the annual limit is more.
    • For the purposes of illustrating the hypothetical growth of the 1% IRA Match, the initial investment is $0 in the example. In actuality, you must contribute to earn a 1% match.
Copy link to clipboard

Disclosures

  • The hypothetical illustrations of mathematical principles that are described in this article and in the app do not predict or project the performance of any investment or strategy, nor do they represent any guarantee of returns. Individual investor results will vary.

  • The impact of the Early IRA Match Removal Fee (when applicable) and any investment fees have not been included in the examples, nor has the impact of inflation, withdrawals, or any potential dividends been taken into account.

  • Ordinary income and, in some cases, penalty taxes may apply to distributions from retirement accounts, effectively reducing gross returns.

  • All investments involve risk. Investors should consider their investment time horizon and income tax bracket when making investment decisions. Past performance does not guarantee future results. Robinhood does not provide tax advice.

Reference No. 2909581
Still have questions? Contact Robinhood Support

Brokerage services are offered through Robinhood Financial LLC, (RHF) a registered broker dealer (member SIPC) and clearing services through Robinhood Securities, LLC, (RHS) a registered broker dealer (member SIPC). Cryptocurrency services are offered through Robinhood Crypto, LLC (RHC) (NMLS ID: 1702840). Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. The Robinhood spending account is offered through Robinhood Money, LLC (RHY) (NMLS ID: 1990968), a licensed money transmitter. A list of our licenses has more information. The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard®. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated. RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC and RHS are not banks. Products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. RHC is not a member of FINRA and accounts are not FDIC insured or protected by SIPC. RHY is not a member of FINRA, and products are not subject to SIPC protection, but funds held in the Robinhood spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Check out Robinhood Financial’s Fee Schedule for details.

© 2023 Robinhood. All rights reserved.
Follow us on

Brokerage services are offered through Robinhood Financial LLC, (RHF) a registered broker dealer (member SIPC) and clearing services through Robinhood Securities, LLC, (RHS) a registered broker dealer (member SIPC). Cryptocurrency services are offered through Robinhood Crypto, LLC (RHC) (NMLS ID: 1702840). Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. The Robinhood spending account is offered through Robinhood Money, LLC (RHY) (NMLS ID: 1990968), a licensed money transmitter. A list of our licenses has more information. The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard®. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated. RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC and RHS are not banks. Products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. RHC is not a member of FINRA and accounts are not FDIC insured or protected by SIPC. RHY is not a member of FINRA, and products are not subject to SIPC protection, but funds held in the Robinhood spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Check out Robinhood Financial’s Fee Schedule for details.

© 2023 Robinhood. All rights reserved.