IRA overview

Individual retirement accounts (IRA) allow you to save and invest for retirement. Any earnings have tax-deferred or tax-free growth potential, so you will keep more of what you save.

Types of IRAs

Robinhood offers 2 different types of retirement accounts: traditional IRA and Roth IRA. You can open 1 of each type of IRA account at Robinhood, even if you already have an IRA at another financial institution or a workplace retirement plan, like a 401(k).

  • A traditional IRA allows you to save for retirement with pre-tax dollars and tax advantages. This means you may be able to deduct qualified contributions now and pay taxes later upon withdrawal or distribution. Your contributions may be fully or partially deductible, depending on your filing status, income, and if you (or your spouse) are covered by a workplace retirement plan. For the 2022 tax year, anyone with earned income is eligible for an annual contribution limit of $6,000 if you’re under age 50 (or $7,000 if you’re age 50 or older). In 2023 these contribution limits will increase to $6,500 for those under age 50 (or $7,500 for those age 50 or older).
  • A Roth IRA allows you to contribute after-tax dollars to save for retirement. This means you pay taxes on contributions now with potential tax-free withdrawals later. Any earnings are tax and penalty free if they meet certain requirements. For the 2022 tax year, you’re eligible to contribute if your income is under $144,000 if filing single, and under $214,000 if filing jointly - with an annual contribution limit of $6,000 (or $7,000 if you’re over age 50). For the 2023 tax year, the income limit is $153,000 if you’re single, and $228,000 if you’re filing jointly and the annual contribution limit is $6,500 (or $7,500 if you’re over age 50).

For more details, check out IRS Contributions to IRAs.

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Set up your IRA account

To begin, select RetirementGet started and then follow the prompts to set up your account within the Robinhood app or on the web. You can open a traditional IRA ,a Roth IRA, or both. If you skip opting in on features, like IRA Instant, you can always opt in later.

Next, you can choose to either get a new, one-time recommended portfolio or pick your own investments for your IRA.

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 aims to work with your retirement timeline. Read about the details in Retirement recommendations.

You can also create your own portfolio by exploring investments, such as stocks and ETFs. Options availability in IRAs is coming soon (subject to eligibility requirements).

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IRA Instant and Cash account

IRA Instant gives you immediate access to your money so you don’t have to wait for deposits or sales of securities to clear. You’ll have access to up to $1,000 of instant deposits. This means you can invest your deposits of up to $1,000 while your money is on its way from the bank.

To get started, select Activate IRA Instant in your Retirement. If you change your mind, you can opt out at any time.

Note

Limited margin is needed to access IRA Instant, which means you’ll have access to unsettled trade proceeds. If you trade using unsettled funds, it could trigger pattern day trader rules. Day trading activities should be avoided inside retirement accounts given the risk of losing all funds involved.

You can’t borrow against the value of your IRA holdings or create a debit balance like with true margin investing in your non-qualified brokerage account. Also, the IRS’s annual contribution limits for IRAs may prevent the deposit of additional funds to meet day trade requirements.

If you select Continue without IRA instant, you’ll automatically get a Cash account instead. With Cash account, the first $1,000 contributed will be available instantly. After that, bank transfers into an IRA will need to fully settle before you can use those funds.

If you want to switch from an Instant account to a Cash account later, follow these steps:

  1. Go to Accountmenu (3 bars) or Settings (gear)
  2. Select InvestingDay trade settings
  3. Select Switch to cash account
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How to fund your IRA

When you set up your IRA account, you can link both your Robinhood and external bank accounts in your Retirement dashboard:

  1. Go to Accountmenu (3 bars) or Settings (gear)→ Transfers
  2. Select Transfer accounts to Robinhood or in Linked accounts, select Add new account
  3. Follow the prompts to link accounts and transfer funds

To transfer money from an existing IRA at another firm, or rollover money from an employer-sponsored 401(k), check out Rollover and transfer options.

Keep in mind

To earn the IRA Match, you’ll need to contribute money from an external bank account. While you can contribute to your IRA from a Robinhood brokerage or spending account, those aren’t eligible to earn the IRA Match. Money deposited from IRA rollovers, transfers, or conversions aren’t eligible for the IRA Match. Remember, the match must be held in the Robinhood IRA for at least 5 years to avoid the possibility of a withdrawal fee.

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IRA Match

The IRA Match is an extra 1% that Robinhood adds to your IRA for making eligible contributions. That means you’ll automatically get an extra 1% on every dollar you contribute every year, up to the annual IRA contribution limits set by the IRS. It’s not counted toward your annual contribution limits, and is typically available to invest immediately.

For more information, check out the IRA Match FAQ, including important limitations.

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Disclosures

Funds being contributed into or distributed from retirement accounts may entail tax consequences. Contributions are limited and withdrawals before age 59 1/2 may be subject to a penalty tax.

Contents provided are for informational purposes only and don’t constitute tax or investment advice. For specific questions, you should consult a tax professional. Robinhood does not provide tax advice. Links to third party sites are being provided for informational purposes only.

All investments involve risk and loss of principal is possible. Investors should consider their investment objectives and risks carefully before investing.

Investors should consider the investment objectives and unique risk profile of any Exchange Traded Product (ETP), including any Exchange-Traded Fund (ETF) and any Exchange-Traded Notes (ETNs), carefully before investing. A prospectus contains this and other information about the ETP and should be read carefully before investing. You can access an ETF’s details page for a prospectus. The Robinhood IRA is available to any customer with a Robinhood brokerage account in good standing.

Securities trading is offered through Robinhood Financial LLC, a registered broker-dealer and Member SIPC, and a subsidiary of Robinhood Markets, Inc. (Robinhood).

Reference No. 2647425
Still have questions? Contact Robinhood Support