Great video! 39yo here. I took advantage of the 3% match for transferring over a Roth IRA from Vanguard that I will not need access to for well over 5 years. It's invested in a four-fund portfolio and I'll use the account to do Roth backdoor conversions every year with it. In my particular case, it made sense--I got a few thousand bucks for free, can keep using the account as I intend, etc. But of course, each individual will need to consider their particular scenario.
@tmh44.. qq.. when u do backdoor .. are you gonna convert Ira match as well ? In that case you need to pay tax on the match right? Else if you get the match in the Roth directly after the conversion then you don’t need to pay tax for the match amount ? Please let me know
@@drewr9580 It's definitely NOT the best platform. Thinkorswim is by far the best platform (now owned by Charles Schwab). Robinhood is used by 20 year olds to punt away their money gambling.
Hi Rob. I am a young professional that recently moved to Columbus, For my first job since graduating school. Your videos have helped me get a grip on how to set myself up for success, and start saving early. The buckeyes are playing my alma mater at the shoe this fall. Keep the videos coming.
Sounds like they're hurting for liquidity. I don't trust Robinhood will be around in five plus years. When they eventually fold I don't want to deal with the stress of recovering my investments.
what stops me a lot is just inertia. i'm currently with chase and its nice i have two rewards cards (one is the amazon 5% back card), savings, checking, and now they even have a barebones investing service. So thats 5 accounts I can look at on one screen, transfer money between checking and savings instantly, etc. it's hard to overcome that ease of use.
"Sounds like they're hurting for liquidity. I don't trust Robinhood will be around in five plus years. When they eventually fold I don't want to deal with the stress of recovering my investments." @josephdickson 3/28/2024
This, they are hurting for liquidity hard, that's why they are advertising so much. These guys are scum, they were the ones halting orders during the gamestop fiasco.
Thank you Rob for doing the homework for us. We greatly appreciate it! We hope your back feels better. I'm assuming that's why you might be standing. Best regards from Florida! PS, dropping $2 million into that account would be an instant $60,000 return. That's appealing.
@Rob Berger hey Rob, I’m a long time listener and occasionally participant in your live streams. I was going back through and rewatched this video and I love the energy from you while standing. Now, I know this may have been related to back issues, but thought I would share the feedback. I’m grateful for all you do for us. Thanks so much!
Thank you very much for this! I am actually doing the gold 3% match with Robinhood. I have been slowly incrementally transferring out of Fidelity into Robinhood. All the way I’m monitoring if I have been getting the match and yes I am indeed. I’m not near the time of taking RMDs so those things you mentioned weren’t disqualifying for me. But I wanted to hear everything you had to say before finalizing the decision. Thank you again!
Thank you very much for this video for breaking down all the terms and conditions. I saw the ad and I have been seriously considering it. It was too good to be true at first glance.
Wow I've got almost 20% of my estate spread out between those apps, Treasury Direct and online HYSA - never thought about putting a bene on them. Won't my will would take care of all that?
@@ATHJD07my understanding is it makes the whole inheritance process so much easier for heirs if you have the designated beneficiary (ies) named within the account itself.
You just earned yourself a subscriber sir! I appreciate your thorough research! You even answered some questions I hadn’t thought about lol. Love from NJ!
I honestly just love Robinhood. Years of using different services, and they just do things so easy. I find myself moving more and more things to it as time goes by.
@@Cdix Well, I would be holding shares of companies in the IRA. I can't imagine a scenario in which Robin Hood went bankrupt and somehow took my ownership of MSFT and SCHD with them.
@@peterpayne2219 You never really own your shares, the brokerage holds them on your behalf in street name. Hence why there is such thing as SIPC insurance that applies to securities
@@peterpayne2219 I think you are right. He has done a video on what happens to your stock if the brokerage folds. It all should just transfer to the next brokerage.
@@peterpayne2219No wonder you got a million. You're not blindly following weirdos that just say silly stuff without looking into things. Robinhood has solid numbers and run as a legitimate brokerage just as any other decent brokerage does. I'd personally give it a go. Giving up a guranteed 30k is not chump change. Especially since as you know, investing even at average rates that 30k isn't even just 30k. Depending on timeline of ut being invested, that 30k is easily 60k-120k of muddled capital over the years easily.
Didn't even know you had a RU-vid channel Rob. I've listened to pretty much every episode of your podcast I did not pay any attention to whose video I was clicking on but as soon as I heard that voice I knew who it was
This was such a great, informative video. The title made me nervous thinking I missed something in this deal from my research. But my understanding was correct and luckily the reason for you canceling won’t effect my decision just hope the transfer goes smoothly
Make sure to not opt into their stock lending program in your brokerage account and IRAs. It's checked on by default. Also, check your privacy settings.
@@newagain9964 I hear you. That's certainly a valid point of view. I think it's a question of degrees. Some people consider all equity investing to be working with grifters too. We have to all draw that line for ourselves.
I did this last year when my employer sold business and I had to move my 401k so I moved RH IRA, got my 3%, not worry about moving it or min distribution. I also can trade in the IRA👍
@Rob , another catch I learnt today is the cash you are holding in IRA doesn't generate any interest. 5.25% API for cash is only for brokerage account.. Moreover, in IRA they don't allow money market fund investment. Your only option is to invest in ETF.
You are misinformed. The ENTIRE PURPOSE of an IRA is to invest the money my guy. If you didn't want to invest then don't use investment accounts... Second, you have the option to throw the money into the cash sweep account for the 5.0% interest. None of this is hidden. It is there plain as day. You are trying to act like they are hiding something. The crazy part is you could just invest in an ETF that tracks US treasuries for higher rates anyhow plus tax benefits if you were worried. You should probably be investing in something more aggressive though so it actually grows much more rapidly.
@@steveno7058Why wouldn't you? It's literally one of the best retirement accounts in existence in the U.S. Better than a 401k even since you have complete control. It's like asking why you would want to retire ever?
It seems to me that because Robinhood is so popular among young people, who have way less wealth and beneficieries to transfer money to, they just didn't prioritize those features all that strongly. I'm a 26 barely getting started, so that happens not to be a very big deal for me, so this video was very helpful.
@robberger Please do a follow-up on this after you've spoken with your estate/trust expert. I do understand my situation will be different, but it could help me decide whether to dig in further for me. Thanks Rob!
The use of the term "match" is very misleading because it is traditionally used with an employer IRA where you put in 3% and your employer matches your 3% which effectively doubles your contribution. This only literally gives you 3%! That is a 97% difference!
It isn't misleading at all. You're just making things up. You normally get no matching whatsoever on IRA's and companies tend to only give matches in 401k's which is a completely different account. It's kind of dumb to compare that when the real comparison is whether or not you would get thst amount of cash back anywhere else simply by moving money. The answer is you won't be getting that typically anywhere else and thus it is a true 3% match. This isn't about your paycheck my man. It's about transfers to IRA. You will need to do some research into what a transfer and IRA is as well as how company matches works and on what.
@@sladewagemann9778I hope not. It was a bad comment. This is a 3% match. An IRA isn't directly tied to matching a paycheck. The comparison is no match vs a match by moving money around between brokerages. That's it. All that extra hooblah is meaningless.
IIRC, it only took me about 5 minutes to make an IRA at Schwab a few years ago. Then about 3 hours of waiting for whatever it is they were doing for 3 hours.
Sorry, that won't work either (even if they allow a trust). For primary beneficiaries, you don't set the percentage... everyone gets an equal share. For example, list your spouse and 2 kids... they will get 33.33% each (no way to do 50%, 25%, 25%). Despite these short comings, specifically lack of contingent beneficiaries, I am rolling over an old 401k to them to get the match and my wife and I will be extra careful crossing intersections together the next 5 years.
@@Playingwithproxies anything above 2% flat cashback gets into unsustainable territory. Name another card that has a flat 3% cashback on all purchases. Not rotating based on categories.
Hmm. I am very happy with Vanguard. But 3% to transfer can be a nice incentive. I have a 3 fund portfolio - VTSAX, VBTLX, VTIAX. I guess I could just get the ETF equivalents at Robinhood, and looks like $0 trade fees. I'm not set to retire for 10 years, so keeping it there for 5 shouldn't be an issue. Hmm...
It's super useful to know that the bonus you earn on the backdoor Roth will be taxed (on the conversion). I think the 3% match on conversion to Robinhood is worth it, but for trying to backdoor it with gold, I'm not sure if that's worth the hassle.
Excelent video. I thought it was very fair, and informative. 1 other feature that would be nice imo, is for Robinhood to have a portal for finacial advisor or money managers for people who use those services. Given the match, it could be a great tool even for totally passive, hand-off investors, which is a huge section of the current adult population.
3% free money.... Keep it in for 5 yrs. Robinhood is doing a good job expanding the business so I think they'll still be around in 5 yrs. If they don't you keep your money d/t SIPC insurance.... I don't see the down side whatsoever.
Interesting (no pun intended) that they're able to call the match "interest". I wonder if some brokerage could set up something like this to get around contributions limits. E.g. I join the "super platinum tier" of my brokerage for $10,000 a year, and in exchange, I get a $10,000 "interest" payment in my account.
No, you can’t set up some “interest transfer” deposit method. That would be akin to money laundering. The match is separate from your personal contribution, treated as interest, not against your contribution limit. Rolling over other accounts will not count against your contribution limits either. Neither the 1% basic, nor the 3% RH Gold match, will count against. I don’t think you can pay $10
Well, i opened a Roth IRA with Robinhood. I don't have thousands or even hundreds to invest at once. I'm more of 25.00 to 50.00 per paycheck. I know for a fact I won't touch any of it until it matures to the time limit i set. I've only got 167.00 invested at the moment with the dividend payout set up to automatically compound.
Rob! I love this video, it spared me a lot of time. I'm considering rolling an old Traditional 401(k) from former employer to a Roth IRA. Do you happen to know if the 3% match from Robinhood applies to opening Roth IRA, or just Traditional IRA? Also, please let me know what you decide to do upon discussing with your estate planning attorney.
It’s a 3% hypothetical match, assuming you stay with their program for 5 years. The program is $50 now - but there’s no reason to expect it to stay at $50 . Once members have sufficient incentive to stay with the program, I expect it will get more expensive - and likely become a percentage of money under management. This is the only way this makes sense for Robin Hood, who don’t have 3% in their standard operating margins to give you.
I am in the process of moving some IRA funds over right now...I read their conditions and you only need to have the Gold membership for a year after getting a transfer match to keep it. You need to keep the $ in that IRA for 5 years, but you don't have to keep paying Gold membership. Unless you want the 3% match on NEW contributions going forward.
Benficiaries: Couldn't you put your kid(s) at 1% allocation and the spouse at 99%? That would basically have have the kids as contingent. [Oops, "Not yet". Right now its split evenly.]
Thanks for the analysis. As they say, if you aren't paying for the product, you are the product. I don't trust this company any further than I can throw it and the gamification of investing is not something that I think is a net positive for society. I wouldn't transfer my life savings because I wouldn't be surprised to find that they are the next FTX.
For some reason it feels like you may be a better candidate for something like an M1. I believe they also do incentives for rollovers, though I don’t know exactly how they work.
Man I really hate the scammers on these financial videos. I'm trying to learn how to handle my finances and people keep trying to take advantage :/ I've been hearing A Lot about this 3% match and figured it was a stealthy attempt by RH to drum up hype. Don't plan on using it and sounds like I made the right choice.
The 5 year rule and the withdraw rules are dumb. However as a 23 year old, I’m confident I won’t have to worry about my account balance being lower 30 years from now!
I think it seems fair for the amount of match they are giving you. They are doing it to bring in new customers and to have a certain customer base, so why would they allow you to move in a huge amount of money, get the match, and then just move it out? From a business perspective, that would be a super bad deal for them.
@@circusfreakRob I understand that, but he explained how even if your account balance dips below original and you withdraw, you’re still subject to paying the money back
Is RH not paying interest on cash in the IRA? Some posters below say so. If true, this should have been a 20 second video to say this is a ripoff! You get 3% today and need to forgo 5% per year (or higher, assuming inflation continues to rip higher)??? Also, no fixed income offerings at RH other than bond funds, which are not fixed income. Two big problems that Rob should have flagged.
I like Robinhood. Chat support, easy interface, and tantalizing returns. The response to these offers will attract business, and make them relevant. The GameStop issue is moot if you're not a day trader, which nobody who listens to this channel should be. Besides that, I think their value prop is changing.
Hey, you’ve got scam bots in the replies to comments. They reply to someone talking about their retirement plan, asking who their financial advisor is. Then a different bot responds with a name, and everyone after that gives fake stories about how great she is, their cousin in Russia recommends them, and so on. I would try and delete those if I were you.
Then dont do a transfer and just put money in it do both just have two ira accounts one with robinhood and another with the one you already have in the meantime...
Rob Berger, you mentioned in another video that you opened the Robinhood account and got the 3%. Would you consider making a updated Robinhood 3% video?
Yeah it’s still 5 years with Webull. There’s a few differences though, like Webull gives you 1/5 of the bonus each year whereas Robinhood gives it all at once. But what attracted me to the Webull offer is that you can get a 4.5% match if you refer someone else to their IRA account.
Even for a detailed knowledgeable lawyer before agreeing diving into investing, so since I’m not savvy like you, I’m ok with zero % offer and can sleep better at night
I got to believe that contingent beneficiarys is easier for them then dealing with probate court. Seems like all the online newcomers banks, brokerages don't care about simple estate planning. Of course Treasury Direct at least allow a trust. They just don't want any old money.
So you spent 10 seconds "reding T&C," missed the "You allow Robinhood to lend your shares" checkbox that is checked by default (lent shares are not protected by SIPC), but then got tripped up on contingent beneficiary? Way to miss the forest for the trees.
Great analysis Rob. Keep up the good work. Gold membership fees $50 per year: If we contribute max $8,000, the 3% of it is $240 which is more than $50. Isn’t it a win situation? If we transfer $100,000 to RH IRA, the benefit is $3,000 per year for 5 years or more right? I mean, not only in the initial time when we do the transfer. Assuming the investment of $103,000 did good and it became $200,000 in the 2nd year. Will RH deposit 3% on total of $200,000 in the 2nd year or will it be on $197,000? Should that money transferred be CASH only or it can be STOCKs too?
It's only 3% on the transferred cash/assets. It's vested over 5 years. So they will take it back if you remember that initial amount within 5 yr. I'm not sure what happens if you take profits, and only withdraw those profits. My guess is you only need to keep that initial balance, but thanks worth looking into. As for transferring stocks, they do allow you to transfer any assets they support: stocks (including ETFs, but no OTCs), options, spreads, and cash. No fractional shares since those are handled differently at different companies.
@@kboy5189it’s a flat one time deposit of 3% of the total value you transfer from another brokerage, regardless of whether they are in cash, stocks, ETFs, or mutual funds.
What of the reverse of the scenario you presented: you transfer, the market goes up. You take money out. The market goes down so you're below your original transfer. Do you have to pay it back then?
I'm turning 54 in a few days, so even if it takes 5 years, I can't take any money out anyways, right? I can't take anything out until 59 1/2 (without penalties). So is this a good deal for someone in my situation?
Rob, an unrelated question: When using the Guyton and Klinger "guardrails" method, how does one calculate the amount that the equities portion of the portfolio has gone up each year (so knowing how much to move to cash)? We have *many* separate index funds, plus some are blended...so it's not at all easy to figure out how much growth happened during a year. Is there an app that will total by asset class (like Empower) AND you can look back historically to check the value of all stocks on your given snapshot date? Or are you just doing it "by hand"?
Can you share what your lawyer says? I’m struggling with the decision as well…I am for the most part buy and hold with a large-ish account and ready to retire…it’s the interface I’m concerned about. Fidelity is awesome, but do I really need all that? My bonus would be ~32,000…is Fidelity worth that? Rhetorical… Thanks for all you do!
I learned from the crypto shenanigans not to trust any "loan my assets" type thing for annual interest earnings. I dont know why Robinhood started a loaning program.
Mr. Bogle didn't like "gimmicks" especially those that use current client's money (via higher expenses or expense ratios?) to bring in new customers at the expense of existing customers. "Marketing" is it for the benefit of the manager or is it for the benefit of the customer base?
Do you know if I would need a RH GOLD subscription for for my IRA and my ROTH IRA if I transfer both accounts? Or does one annual subscription cover both accounts? Thx for this informative video! Keep them coming!
Just an FYI: I attempted to transfer my ROTH IRA over from Merrill Edge & it only took certain assets, I had to liquidate a handful of positions & move the money over instead of my stock holdings. This was probably for the best as I had a few dog positions that I needed to get out of anyways & I’m up around 50% since doing so.
Am I wrong to worry about how they plan to make the money back? My understanding is that they sell the order flow? So I would have to go look at spreads across brokers to understand what it would cost me to buy things on their platform relative to another platform?
once again, your videos are the best! quick question... do you have a recent video on M1 and alternative to M1. Keep up the great wise sage investment advice!! ~Svend
I love that Fidelity card because it’s 2% on everything with no limit and if you do the math on all those gimmick type cards but have 5% on this than 3% on that they sound nice but because there is a limit on how much you can earn or the percentage is on a limit on how much you can spend in order to get the reward it’s just that a gimmick so the 5 to 10,000 a month that we spend it’s all on one card nice and convenient and we get our 2% on the entire balance never have to worry about the gimmick
No one said you had to move a full IRA over. Maybe leave just enough in your original account that you can keep contributing to your original company after the lump sum to Robinhood?
Hi Rob, I became a Robinhood Gold member recently, just to take advantage of the 3% IRA match. I'm currently w Schwab SWVXX. if I transfer that into robin hood, will that get me the3% on the total? thanks for all the info - you're great!
