Robinhood 3% IRA Match

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BobbleyBob
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Robinhood 3% IRA Match

Post by BobbleyBob »

What do you think of the new Robinhood 3% IRA match? It seems like it's the best and cheapest place to hold a lazy portfolio now.

Contributing $6500/year means you get $195/year. You have to pay $60/year for Robinhood Gold though. So you come out $135/year ahead. Robinhood Gold also comes with $1000 of 0% interest margin. If you invest that in a short term Treasury bond ETF, you make about $50 a year.

If you transfer money, you get a 1% match with no cap. For example, if you transfer $1 million of VTI from a 401k or IRA, you get $10,000. The only catch is if you have to hold the money at Robinhood for 5 years. You can't just transfer the money, get the bonus and transfer out.

https://robinhood.com/us/en/support/art ... match-faq/
the_wiki
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Re: Robinhood 3% IRA Match

Post by the_wiki »

If you started at 25 and maxed out the Roth (assuming $6500 per year), at 8% returns you'd have an extra $56705 (2.7%) at 65 with this match.
02nz
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Re: Robinhood 3% IRA Match

Post by 02nz »

Am I reading this correctly, they match 1% on IRA transfers as well?
MrJedi
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Re: Robinhood 3% IRA Match

Post by MrJedi »

Tempting but does not quite meet my usual requirement of $400+ bonus be "worth it" to open a new account.

I may consider if they are still running this promo when I'm ready to roll a big 401k balance.
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nisiprius
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Re: Robinhood 3% IRA Match

Post by nisiprius »

Notice that this is very very very different from a 401(k) employer "percentage match."

A "3% match" on a 401(k) means that if you contribute 3% of your salary, the employer will match that. That means your contribution has been doubled. An employer contribution of 3% of your salary is an employer contribution of 100% of your contribution.

In other words, very roughly speaking, what Robinhood is calling a "3% match" is a thirtieth as much as what 401(k) plans call a "3% match."

Of course I'm sure that Robinhood didn't mean to be deceptive. :annoyed
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Re: Robinhood 3% IRA Match

Post by z3r0c00l »

Tempting, but the company has to stay in business and not have (another) major scandal for this to last long term. I would need reasonable confidence that they will be around in 5, 10 years and still offering this to bother.
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the_wiki
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Re: Robinhood 3% IRA Match

Post by the_wiki »

nisiprius wrote: Tue Aug 08, 2023 6:57 am Notice that this is very very very different from a 401(k) employer "percentage match."

A "3% match" on a 401(k) means that if you contribute 3% of your salary, the employer will match that. That means your contribution has been doubled. An employer contribution of 3% of your salary is an employer contribution of 100% of your contribution.

In other words, very roughly speaking, what Robinhood is calling a "3% match" is a thirtieth as much as what 401(k) plans call a "3% match."

Of course I'm sure that Robinhood didn't mean to be deceptive. :annoyed
I'm sure they carefully selected the word "match" instead of "reward" or "bonus".

Also note that the gold subscription includes an automatic margin account. Not exactly a good message to be sending new investors.
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arcticpineapplecorp.
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Re: Robinhood 3% IRA Match

Post by arcticpineapplecorp. »

does confetti get thrown in the air on your smartphone after opening the IRA? Because I think that's what's most important from a reputable financial organization.
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secondopinion
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Re: Robinhood 3% IRA Match

Post by secondopinion »

arcticpineapplecorp. wrote: Tue Aug 08, 2023 12:44 pm does confetti get thrown in the air on your smartphone after opening the IRA? Because I think that's what's most important from a reputable financial organization.
In reality, one should be throwing confetti with taking one major step forward towards saving for retirement. Personally, I will save the money on confetti and invest it instead.

However, all of the special effects and messaging is highly annoying of Robinhood in my opinion.
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BobbleyBob
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Re: Robinhood 3% IRA Match

Post by BobbleyBob »

Some responses to your comments:

1. Your $50,000 to $60,000 bonus estimate sounds right to me. In a Roth IRA it's completely tax free.

2. Yes, they match 1% on IRA transfers and 401k rollovers without limit. The biggest value is for people who are close to retirement and who have large nest eggs. For example, if you have $5 million in your tax advantaged accounts, you can get $50,000 as a bonus. The biggest bonuses I've seen at other brokerages is around $1000 at best. I believe Robinhood's excess SIPC coverage goes up to $10 million.

3. You'd have to transfer over at least $40,000 from your current IRA/401k to get $400+ And/or you'd have to max out your IRA for two years to get nearly $400.

4. There's a bunch of different versions of 401k employer contributions. It's part of your overall pay package. Robinhood's "match" is just a promotion/bonus for using Robinhood instead of another brokerage. In any case, the Robinhood website makes it clear that if you contribute $6500, they'll give you $195. It's a pretty good deal considering other brokerages don't have any sort of match at all.

5. If Robinhood goes out of business, we can just transfer our Vanguard ETFs to another brokerage. The brokerage industry is highly competitive, and this happens to be the best deal at the moment. There's $2 million of FDIC insurance, $500,000 of SIPC insurance, additional excess-SIPC insurance, etc. The unique thing here is that while most matches are a one time thing, Robinhood has stated they'll keep this match around as long as they're still in business. So instead of getting a one time match, you get 3% on your Roth IRA contributions every year. I see this as a permanent price reduction, not just a bonus.

6. I think their "automatic margin" account is "limited margin" meaning you can sell an ETF and buy another one immediately before the cash settles. It doesn't give you access to margin loans. I think this is what Fidelity, TDA, Schwab, etc. use as their default.

7. They got rid of the confetti. Personally, I didn't mind it. I believe you got confetti when you bought a share of VTI, not just when you sold at a profit. They tried to make saving money exciting for a younger generation, even though it didn't work as planned. Personally, I still get a little excited when I buy a share or fractional share of VTI, whether there's confetti or not.

8. The app and website is still ultra simple, but there's little in the way of special effects and messaging now. Robinhood won a bunch of prestigious design awards a few years ago, and I still think it's the best I've used.
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spencydub
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Robinhood 3% IRA Match

Post by spencydub »

[Merged into an existing thread on the same topic by Moderator Misenplace]
Thoughts on Robinhoods 3% IRA match? Requires $60/year "Gold" Membership. Gold membership includes $1000, 0% interest margin. Margin SGOV, make $20-$50/year. Membership net, $10-$40. Benefit = $155-185/ year in extra Roth dollars. Required to hold money at Robinhood for 5 years to keep money. This is the worst sticking point in my opinion. Interested to hear opinions.

https://robinhood.com/us/en/support/art ... -overview/
Last edited by spencydub on Fri Aug 18, 2023 10:31 pm, edited 1 time in total.
Gryphon
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Re: Robinhood 3% IRA Match

Post by Gryphon »

I'm no longer in the accumulation phase & not making IRA contributions. Now if they'd match my Roth conversions over the next couple of years, that might get my attention.
Last edited by Gryphon on Fri Aug 18, 2023 10:18 pm, edited 1 time in total.
frcabot
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Re: Robinhood 3% IRA Match

Post by frcabot »

5 years is a long time to be with Robinhood. I wouldn’t put more in there than the SIPC although chances are they’d be bought out rather than go bankrupt and lose customer funds.
toddthebod
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Re: Robinhood 3% IRA Match

Post by toddthebod »

spencydub wrote: Fri Aug 18, 2023 10:12 pm Gold membership includes $1000, 0% interest margin. Margin SGOV, make $20-$50/year. Membership net, $10-$40.
I don't know what any of these words mean.

Other than that, $135 to make my annual Roth contribution at Robinhood instead of Schwab? No thanks.
frcabot
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Re: Robinhood 3% IRA Match

Post by frcabot »

If you put in $250K, you get $7500 which is a pretty good bonus. But 5 years is a LONG holding period.

Edit never mind this isn’t a transfer bonus, it’s a MATCH. So the bonus comes out to $135 per year after the Gold fees? Meh.
Gryphon
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Re: Robinhood 3% IRA Match

Post by Gryphon »

You get a 1% match on transfers, not 3%.
toddthebod
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Re: Robinhood 3% IRA Match

Post by toddthebod »

Gryphon wrote: Fri Aug 18, 2023 10:25 pm You get a 1% match on transfers, not 3%.
I wonder if there's a limit or if Peter Thiel could transfer his Roth IRA in and get 1%.
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spencydub
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Re: Robinhood 3% IRA Match

Post by spencydub »

Gryphon wrote: Fri Aug 18, 2023 10:25 pm You get a 1% match on transfers, not 3%.
Transfer, yes 1%. Contributions 3%

https://robinhood.com/us/en/support/art ... -overview/

“As a Gold subscriber, you can get a 3% IRA match on eligible IRA contributions to your Robinhood IRA account.**”
frcabot
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Re: Robinhood 3% IRA Match

Post by frcabot »

toddthebod wrote: Fri Aug 18, 2023 10:29 pm
Gryphon wrote: Fri Aug 18, 2023 10:25 pm You get a 1% match on transfers, not 3%.
I wonder if there's a limit or if Peter Thiel could transfer his Roth IRA in and get 1%.
Lol Peter Thiel probably has a family office managing his investments. Could you imagine if his investment managers used Robinhood as their platform?
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spencydub
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Re: Robinhood 3% IRA Match

Post by spencydub »

toddthebod wrote: Fri Aug 18, 2023 10:18 pm
spencydub wrote: Fri Aug 18, 2023 10:12 pm Gold membership includes $1000, 0% interest margin. Margin SGOV, make $20-$50/year. Membership net, $10-$40.
I don't know what any of these words mean.

Other than that, $135 to make my annual Roth contribution at Robinhood instead of Schwab? No thanks.
Bit of a word salad lol. $135/year not enough to make you move is fair.
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Re: Robinhood 3% IRA Match

Post by toddthebod »

frcabot wrote: Fri Aug 18, 2023 10:52 pm
toddthebod wrote: Fri Aug 18, 2023 10:29 pm
Gryphon wrote: Fri Aug 18, 2023 10:25 pm You get a 1% match on transfers, not 3%.
I wonder if there's a limit or if Peter Thiel could transfer his Roth IRA in and get 1%.
Lol Peter Thiel probably has a family office managing his investments. Could you imagine if his investment managers used Robinhood as their platform?
For $50 million, they might consider it!
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spencydub
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Re: Robinhood 3% IRA Match

Post by spencydub »

frcabot wrote: Fri Aug 18, 2023 10:16 pm 5 years is a long time to be with Robinhood. I wouldn’t put more in there than the SIPC although chances are they’d be bought out rather than go bankrupt and lose customer funds.
Yeah the 5 years is the bummer
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BobbleyBob
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Re: Robinhood 3% IRA Match

Post by BobbleyBob »

The $60/year for Robinhood Gold comes with $1000 of 0% interest margin. If you invest that in SGOV (0-3 month treasury bond ETF) at the current 5.32% yield, you'd make $53.20. That means Robinhood Gold costs $6.80/year. Then if you contribute $6500 to your IRA, you'll have $6695 (3% of 6500 is $195.) If you contribute $7500, you'll have $7725 (3% of 7500 is $225.) That works out to just under 3% for the match. The match is permanent and available every year. My favorite part is that the entire bonus is tax advantaged. If max out your Roth IRA every year from 25 to 65, it compounds out to over $50,000 extra tax free.

Furthermore, Robinhood has a 1% match on all 401k and IRA rollovers and transfers. There's no maximum limit. So if you transfer in $5 million of cash or securities, you get $50,0000 cash as a bonus. Theoretically, this means Peter Thiel could transfer in his entire IRA and get an enormous match. But I'd recommend staying below the insurance limits. Robinhood has $2 million of FDIC coverage (they sweep to 8 major banks which offer $250,000 of coverage each), the standard $500,000 SIPC coverage, and $50 million per person of excess SIPC coverage.

You get the bonus cash immediately, but you need to keep the money in your account for 5 years to keep the full bonus. You might be able to take some of it out sooner and keep the bonus, but only if your remaining balance is above the amount when you contributed the money. As long as you can leave the money in your account for 5 years, it seems like a great idea to make the transfer to me. The only other catch is that Robinhood doesn't have individual bonds and mutual funds. You'll need to sell those and buy ETFs like VTI, BND, etc. Or if you're at Vanguard, you can call and have them convert your mutual funds to their ETF equivalents.

https://robinhood.com/us/en/support/art ... match-faq/

https://robinhood.com/us/en/support/art ... protected/
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Wiggums
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Re: Robinhood 3% IRA Match

Post by Wiggums »

spencydub wrote: Fri Aug 18, 2023 10:12 pm Thoughts on Robinhoods 3% IRA match? Requires $60/year "Gold" Membership. Gold membership includes $1000, 0% interest margin. Margin SGOV, make $20-$50/year. Membership net, $10-$40. Benefit = $155-185/ year in extra Roth dollars. Required to hold money at Robinhood for 5 years to keep money. This is the worst sticking point in my opinion. Interested to hear opinions.

https://robinhood.com/us/en/support/art ... -overview/
You sure have to do a lot of work for a tiny bonus, and you are held hostage for five years. Isn’t your time more valuable?
"I started with nothing and I still have most of it left."
toddthebod
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Re: Robinhood 3% IRA Match

Post by toddthebod »

BobbleyBob wrote: Sat Aug 19, 2023 5:43 pm The $60/year for Robinhood Gold comes with $1000 of 0% interest margin. If you invest that in SGOV (0-3 month treasury bond ETF) at the current 5.32% yield, you'd make $53.20. That means Robinhood Gold costs $6.80/year. Then if you contribute $6500 to your IRA, you'll have $6695 (3% of 6500 is $195.) If you contribute $7500, you'll have $7725 (3% of 7500 is $225.) That works out to just under 3% for the match. The match is permanent and available every year. My favorite part is that the entire bonus is tax advantaged. If max out your Roth IRA every year from 25 to 65, it compounds out to over $50,000 extra tax free.

Furthermore, Robinhood has a 1% match on all 401k and IRA rollovers and transfers. There's no maximum limit. So if you transfer in $5 million of cash or securities, you get $50,0000 cash as a bonus. Theoretically, this means Peter Thiel could transfer in his entire IRA and get an enormous match. But I'd recommend staying below the insurance limits. Robinhood has $2 million of FDIC coverage (they sweep to 8 major banks which offer $250,000 of coverage each), the standard $500,000 SIPC coverage, and $50 million per person of excess SIPC coverage.

You get the bonus cash immediately, but you need to keep the money in your account for 5 years to keep the full bonus. You might be able to take some of it out sooner and keep the bonus, but only if your remaining balance is above the amount when you contributed the money. As long as you can leave the money in your account for 5 years, it seems like a great idea to make the transfer to me. The only other catch is that Robinhood doesn't have individual bonds and mutual funds. You'll need to sell those and buy ETFs like VTI, BND, etc. Or if you're at Vanguard, you can call and have them convert your mutual funds to their ETF equivalents.

https://robinhood.com/us/en/support/art ... match-faq/

https://robinhood.com/us/en/support/art ... protected/
Can we not with the astroturf accounts on this forum please?
Topic Author
BobbleyBob
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Re: Robinhood 3% IRA Match

Post by BobbleyBob »

toddthebod wrote: Sat Aug 19, 2023 6:06 pm
BobbleyBob wrote: Sat Aug 19, 2023 5:43 pm The $60/year for Robinhood Gold comes with $1000 of 0% interest margin. If you invest that in SGOV (0-3 month treasury bond ETF) at the current 5.32% yield, you'd make $53.20. That means Robinhood Gold costs $6.80/year. Then if you contribute $6500 to your IRA, you'll have $6695 (3% of 6500 is $195.) If you contribute $7500, you'll have $7725 (3% of 7500 is $225.) That works out to just under 3% for the match. The match is permanent and available every year. My favorite part is that the entire bonus is tax advantaged. If max out your Roth IRA every year from 25 to 65, it compounds out to over $50,000 extra tax free.

Furthermore, Robinhood has a 1% match on all 401k and IRA rollovers and transfers. There's no maximum limit. So if you transfer in $5 million of cash or securities, you get $50,0000 cash as a bonus. Theoretically, this means Peter Thiel could transfer in his entire IRA and get an enormous match. But I'd recommend staying below the insurance limits. Robinhood has $2 million of FDIC coverage (they sweep to 8 major banks which offer $250,000 of coverage each), the standard $500,000 SIPC coverage, and $50 million per person of excess SIPC coverage.

You get the bonus cash immediately, but you need to keep the money in your account for 5 years to keep the full bonus. You might be able to take some of it out sooner and keep the bonus, but only if your remaining balance is above the amount when you contributed the money. As long as you can leave the money in your account for 5 years, it seems like a great idea to make the transfer to me. The only other catch is that Robinhood doesn't have individual bonds and mutual funds. You'll need to sell those and buy ETFs like VTI, BND, etc. Or if you're at Vanguard, you can call and have them convert your mutual funds to their ETF equivalents.

https://robinhood.com/us/en/support/art ... match-faq/

https://robinhood.com/us/en/support/art ... protected/
Can we not with the astroturf accounts on this forum please?
Ha, that's a fair accusation since this is a new/rarely used account and it seems like all of my comments have been about Robinhood. But I'm an experienced real life human Boglehead (that attended the annual meeting in Chicago last year.) I don't work for Robinhood, and I've used a variety of brokerages in the past including Vanguard, ETrade, Schwab, Fidelity, and TD Ameritrade. I genuinely think that Robinhood is the best, simplest, and cheapest brokerage for Bogleheads now. VTI in taxable and FZROX in tax advantaged at Fidelity was the cheapest way to hold a lazy portfolio until December of last year. Now it's Robinhood.

This is fascinating to me because Bogle cut the cost of passive investing down to almost zero. Fidelity then cut it down to zero. Now Robinhood is pushing it to the point where we're paid to passively invest. They regularly sweep cash to whichever bank pays the most on a given day. They allow us to engage in securities lending from our brokerage accounts (not just inside of our index funds). They sell our order flow to whichever market maker offers them the most money. Active traders rely on a large pool of passive buy and hold investors, and Robinhood has found a way to monetize that at the brokerage level. And they split part of the profits with us.

Of course, if this "which brokerage is technically cheapest" stuff isn't interesting to you, then I'm happy to discuss/debate the other usual hot button allocation topics. I think factor investing is silly, 100% VT beats 100% VTI, REITS are already included in the index so there's no need to tilt towards them, 100% equities is fine for younger investors, HFEA/Life Cycle Investing is not a bad idea for the 1-5% of people to whom it actually applies (not me), ETFs are way better than mutual funds, VTI/VEA/VWO/BND/BNDX beats an equivalent Vanguard Target Date Fund for anyone interested enough to ask the question, etc. Lol, I usually hang out on Reddit, but it's good to return to the mothership.
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spencydub
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Re: Robinhood 3% IRA Match

Post by spencydub »

Thanks for your reply BobbleyBob. I do think it is a compelling offer. What are your thoughts on the 5 year lockup.

Lol. You nailed the "hot button allocation topics"
tj
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Re: Robinhood 3% IRA Match

Post by tj »

BobbleyBob wrote: Sat Aug 19, 2023 5:43 pm The $60/year for Robinhood Gold comes with $1000 of 0% interest margin. If you invest that in SGOV (0-3 month treasury bond ETF) at the current 5.32% yield, you'd make $53.20. That means Robinhood Gold costs $6.80/year. Then if you contribute $6500 to your IRA, you'll have $6695 (3% of 6500 is $195.) If you contribute $7500, you'll have $7725 (3% of 7500 is $225.) That works out to just under 3% for the match. The match is permanent and available every year. My favorite part is that the entire bonus is tax advantaged. If max out your Roth IRA every year from 25 to 65, it compounds out to over $50,000 extra tax free.

Furthermore, Robinhood has a 1% match on all 401k and IRA rollovers and transfers. There's no maximum limit. So if you transfer in $5 million of cash or securities, you get $50,0000 cash as a bonus. Theoretically, this means Peter Thiel could transfer in his entire IRA and get an enormous match. But I'd recommend staying below the insurance limits. Robinhood has $2 million of FDIC coverage (they sweep to 8 major banks which offer $250,000 of coverage each), the standard $500,000 SIPC coverage, and $50 million per person of excess SIPC coverage.

You get the bonus cash immediately, but you need to keep the money in your account for 5 years to keep the full bonus. You might be able to take some of it out sooner and keep the bonus, but only if your remaining balance is above the amount when you contributed the money. As long as you can leave the money in your account for 5 years, it seems like a great idea to make the transfer to me. The only other catch is that Robinhood doesn't have individual bonds and mutual funds. You'll need to sell those and buy ETFs like VTI, BND, etc. Or if you're at Vanguard, you can call and have them convert your mutual funds to their ETF equivalents.

https://robinhood.com/us/en/support/art ... match-faq/

https://robinhood.com/us/en/support/art ... protected/
FDIC coverage is so irrelevant that I'm not sure why you mentioned it. That only covers un-invested cash. Why would you have any un-invested cash in such an account?
Misenplace
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Re: Robinhood 3% IRA Match

Post by Misenplace »

spencydub, I merged your thread into this existing thread on the same topic.

Thanks to the member who reported the duplicate threads.

Moderator Misenplace
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StewedCarrot
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Re: Robinhood 3% IRA Match

Post by StewedCarrot »

I'm eyeing this one as well and would love to hear the experiences of anyone who has actually moved a large sum to Robinhood. Did they pay? Any snags in the move or tax reporting?
JohnDoh
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Re: Robinhood 3% IRA Match

Post by JohnDoh »

I don’t know anything meaningful about Robinhood but find/found this offer interesting enough to look into it. It seems, however, that Robinhood cannot hold bonds. So I couldn’t not transfer in my TIPS ladder (split across TRAD IRA and ROTH IRA) it seems. Is this correct? Any workarounds?

Because I’d strongly consider transferring funds that i don’t expect to access in the next 5 years. I’m early 60s with substantial (by my lights) IRA/Roth but much is now a TIPS ladder.
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spencydub
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Re: Robinhood 3% IRA Match

Post by spencydub »

JohnDoh wrote: Sun Aug 20, 2023 9:34 am I don’t know anything meaningful about Robinhood but find/found this offer interesting enough to look into it. It seems, however, that Robinhood cannot hold bonds. So I couldn’t not transfer in my TIPS ladder (split across TRAD IRA and ROTH IRA) it seems. Is this correct? Any workarounds?

Because I’d strongly consider transferring funds that i don’t expect to access in the next 5 years. I’m early 60s with substantial (by my lights) IRA/Roth but much is now a TIPS ladder.
I think you would just have to do a partial transfer, excluding the TIPS from the transfer.
Minty
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Re: Robinhood 3% IRA Match

Post by Minty »

Wiggums wrote: Sat Aug 19, 2023 5:55 pm
spencydub wrote: Fri Aug 18, 2023 10:12 pm Thoughts on Robinhoods 3% IRA match? Requires $60/year "Gold" Membership. Gold membership includes $1000, 0% interest margin. Margin SGOV, make $20-$50/year. Membership net, $10-$40. Benefit = $155-185/ year in extra Roth dollars. Required to hold money at Robinhood for 5 years to keep money. This is the worst sticking point in my opinion. Interested to hear opinions.

https://robinhood.com/us/en/support/art ... -overview/
You sure have to do a lot of work for a tiny bonus, and you are held hostage for five years. Isn’t your time more valuable?
Five years is a long time, but since this is retirement money, it is going to sit quietly for years anyway.
Core Four w/ nominal bonds & TIPS. Refi Rampage: Purchase: 3.875% 30 -> R1 3% 20 -> R2 2.375% 15 -> R3 1.99% 15 -> R4 1.875% 15
learningtofly
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Re: Robinhood 3% IRA Match

Post by learningtofly »

Has anyone done or is planning to do this promo with a backdoor ROTH? In my situation, I'd rollover a ROTH IRA this year, then contribute to a Traditional IRA in early 2024 and convert that to a ROTH. I'd want to make sure that I would get the 1% match bonus on the rollover (ROTH), and then the 3% match on the contribution (initially Traditional). Can anyone confirm this won't be an issue? Thanks.
nalor511
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Re: Robinhood 3% IRA Match

Post by nalor511 »

Am I reading this correctly?
-RH will give you a 1% "match" on any IRA/Roth balances transferred
-RH will claw back the match unless you hold it at least 5 years
-you do not need to be "gold" or anything special to get the 1%
-$100 transfer-out fee

Any other gotchas? Thx
tj
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Re: Robinhood 3% IRA Match

Post by tj »

nalor511 wrote: Sat Oct 21, 2023 1:11 pm Am I reading this correctly?
-RH will give you a 1% "match" on any IRA/Roth balances transferred
-RH will claw back the match unless you hold it at least 5 years
-you do not need to be "gold" or anything special to get the 1%
-$100 transfer-out fee

Any other gotchas? Thx
I would think the fact that you are stuck with them them for 5 years is a massive gotcha.
nalor511
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Re: Robinhood 3% IRA Match

Post by nalor511 »

tj wrote: Sat Oct 21, 2023 1:17 pm
nalor511 wrote: Sat Oct 21, 2023 1:11 pm Am I reading this correctly?
-RH will give you a 1% "match" on any IRA/Roth balances transferred
-RH will claw back the match unless you hold it at least 5 years
-you do not need to be "gold" or anything special to get the 1%
-$100 transfer-out fee

Any other gotchas? Thx
I would think the fact that you are stuck with them them for 5 years is a massive gotcha.
Agreed, but it's one I already listed. Getting a $5k bonus on $500k is about 5x what you'd get most places who do IRA bonuses anyway, so 5yr hold isn't toooo bad.
the_wiki
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Re: Robinhood 3% IRA Match

Post by the_wiki »

tj wrote: Sat Oct 21, 2023 1:17 pm
nalor511 wrote: Sat Oct 21, 2023 1:11 pm Am I reading this correctly?
-RH will give you a 1% "match" on any IRA/Roth balances transferred
-RH will claw back the match unless you hold it at least 5 years
-you do not need to be "gold" or anything special to get the 1%
-$100 transfer-out fee

Any other gotchas? Thx
I would think the fact that you are stuck with them them for 5 years is a massive gotcha.
Why? You aren’t planning on keeping an IRA for 5 years?
tj
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Re: Robinhood 3% IRA Match

Post by tj »

the_wiki wrote: Sat Oct 21, 2023 1:51 pm
tj wrote: Sat Oct 21, 2023 1:17 pm
nalor511 wrote: Sat Oct 21, 2023 1:11 pm Am I reading this correctly?
-RH will give you a 1% "match" on any IRA/Roth balances transferred
-RH will claw back the match unless you hold it at least 5 years
-you do not need to be "gold" or anything special to get the 1%
-$100 transfer-out fee

Any other gotchas? Thx
I would think the fact that you are stuck with them them for 5 years is a massive gotcha.
Why? You aren’t planning on keeping an IRA for 5 years?
Not at Robin Hood. I understand $5k for $500k is a lot, but with the 5 year hold that is more like $1k for $500k and you can get better than $1k for $500k with 12 month holds at other brokers.
the_wiki
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Re: Robinhood 3% IRA Match

Post by the_wiki »

tj wrote: Sat Oct 21, 2023 2:07 pm
the_wiki wrote: Sat Oct 21, 2023 1:51 pm
tj wrote: Sat Oct 21, 2023 1:17 pm
nalor511 wrote: Sat Oct 21, 2023 1:11 pm Am I reading this correctly?
-RH will give you a 1% "match" on any IRA/Roth balances transferred
-RH will claw back the match unless you hold it at least 5 years
-you do not need to be "gold" or anything special to get the 1%
-$100 transfer-out fee

Any other gotchas? Thx
I would think the fact that you are stuck with them them for 5 years is a massive gotcha.
Why? You aren’t planning on keeping an IRA for 5 years?
Not at Robin Hood. I understand $5k for $500k is a lot, but with the 5 year hold that is more like $1k for $500k and you can get better than $1k for $500k with 12 month holds at other brokers.
I don't know. These bonuses seem to be drying up now that money isn't cheap. I don't think I'd count on getting a big one every 6-12 months going forward.
erp
Posts: 565
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Re: Robinhood 3% IRA Match

Post by erp »

nalor511 wrote: Sat Oct 21, 2023 1:11 pm Am I reading this correctly?
-RH will give you a 1% "match" on any IRA/Roth balances transferred
-RH will claw back the match unless you hold it at least 5 years
-you do not need to be "gold" or anything special to get the 1%
-$100 transfer-out fee

Any other gotchas? Thx
Not really a gotcha, but I think they don't take mutual funds or bonds, in case you were thinking of transferring those. Maybe no good MMF sweep either.

Also, apparently they don't have weekend customer support, which resulted in a disaster for one family (when a young investor misunderstood his cash bal, couldn't get in touch with anyone for help, and committed suicide). edit: looks like they added it afterwards https://www.reuters.com/technology/brok ... 021-10-05/
calwatch
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Re: Robinhood 3% IRA Match

Post by calwatch »

I just signed on to Robinhood for taxable (with the 1% ACATS bonus) and am considering doing this for the IRA, but have low confidence that they will properly process a backdoor Roth and not withhold the bonus. Notwithstanding the bonus, have folks been able to backdoor Roth easily on Robinhood?
MrJedi
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Re: Robinhood 3% IRA Match

Post by MrJedi »

It's an intriguing offer but not enough for me. Maybe if they still offer it when I'm retired and ready to rollover a fat 401k balance, but I have doubts the offer will still be around.

I frequently chase credit card and bank account bonuses, but IRAs are a bit more hassle to track and maintain with the extra 1099-Rs, 5498s, etc., making sure your contributions and distributions are coded properly (even well established brokers make mistakes on those sometimes). Credit card bonuses are generally not taxable at all, and bank accounts just have a 1099-INT income to enter.
soccerrules
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Re: Robinhood 3% IRA Match

Post by soccerrules »

BobbleyBob wrote: Sat Aug 19, 2023 5:43 pm The $60/year for Robinhood Gold comes with $1000 of 0% interest margin. If you invest that in SGOV (0-3 month treasury bond ETF) at the current 5.32% yield, you'd make $53.20. That means Robinhood Gold costs $6.80/year. Then if you contribute $6500 to your IRA, you'll have $6695 (3% of 6500 is $195.) If you contribute $7500, you'll have $7725 (3% of 7500 is $225.) That works out to just under 3% for the match. The match is permanent and available every year. My favorite part is that the entire bonus is tax advantaged. If max out your Roth IRA every year from 25 to 65, it compounds out to over $50,000 extra tax free.

Furthermore, Robinhood has a 1% match on all 401k and IRA rollovers and transfers. There's no maximum limit. So if you transfer in $5 million of cash or securities, you get $50,0000 cash as a bonus. Theoretically, this means Peter Thiel could transfer in his entire IRA and get an enormous match. But I'd recommend staying below the insurance limits. Robinhood has $2 million of FDIC coverage (they sweep to 8 major banks which offer $250,000 of coverage each), the standard $500,000 SIPC coverage, and $50 million per person of excess SIPC coverage.

You get the bonus cash immediately, but you need to keep the money in your account for 5 years to keep the full bonus. You might be able to take some of it out sooner and keep the bonus, but only if your remaining balance is above the amount when you contributed the money. As long as you can leave the money in your account for 5 years, it seems like a great idea to make the transfer to me. The only other catch is that Robinhood doesn't have individual bonds and mutual funds. You'll need to sell those and buy ETFs like VTI, BND, etc. Or if you're at Vanguard, you can call and have them convert your mutual funds to their ETF equivalents.

https://robinhood.com/us/en/support/art ... match-faq/

https://robinhood.com/us/en/support/art ... protected/
Hey BobbleyBob- What's the name printed on your paycheck? #hypeman
Don't let your outflow exceed your income or your upkeep will be your downfall.
Topic Author
BobbleyBob
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Re: Robinhood 3% IRA Match

Post by BobbleyBob »

Haha, I don't get paychecks from them, but they did pay out the 1% transfer match as expected.
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BuglesHead
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Re: Robinhood 3% IRA Match

Post by BuglesHead »

Great. I was already facing decision paralysis between Fidelity and Schwab for my Roth and now I find this. If I was just starting out with a Roth, and was only doing ETFs, not planning on moving for 10+ years, this seems to be a pretty compelling offer? I don't know why picking Robinhood still gives me an ick factor though, but I'm not sure if its justified or if its just emotions which I'm supposed to be ignoring anyways.
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LadyGeek
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Re: Robinhood 3% IRA Match

Post by LadyGeek »

FYI - Robinhood (and other) transfer bonuses are discussed here: The Final, Definitive Thread on Brokerage Transfer Bonuses

This thread is about Robinhood's IRA match.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
Bogle-007
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Re: Robinhood 3% IRA Match

Post by Bogle-007 »

nisiprius wrote: Tue Aug 08, 2023 6:57 am Notice that this is very very very different from a 401(k) employer "percentage match."

A "3% match" on a 401(k) means that if you contribute 3% of your salary, the employer will match that. That means your contribution has been doubled. An employer contribution of 3% of your salary is an employer contribution of 100% of your contribution.

In other words, very roughly speaking, what Robinhood is calling a "3% match" is a thirtieth as much as what 401(k) plans call a "3% match."

Of course I'm sure that Robinhood didn't mean to be deceptive. :annoyed
:shock:
Subvisual
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Re: Robinhood 3% IRA Match

Post by Subvisual »

That's a really interesting offer. Shockingly good in fact, the IRA yearly contribution limit has otherwise been somewhat of a hard limit, finding a way to even slightly bypass that is intriguing. It sounds a little vague whether Roth IRA contributions would qualify and if so if the match funds would be deposited into the Roth IRA tax free. Curious if anyone has any experience with that.
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whodidntante
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Re: Robinhood 3% IRA Match

Post by whodidntante »

If I were reasonably confident I could get a backdoor Roth IRA to work and keep this bonus, I would do it. I'm not even confident they would know what a backdoor Roth IRA is, though.
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