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Wednesday, December 7, 2022

Robinhood Needs Your Retirement {Dollars}


(Bloomberg) — On-line brokerage Robinhood and its gamified buying and selling app goes after retirement accounts.

The fintech firm launched its first retirement providing Tuesday, permitting a small variety of present prospects to open IRA accounts on its platform and beginning a waitlist for others.

Robinhood Retirement, aimed toward gig-economy employees, will match 1% of a buyer’s contributions as much as the allowed restrict (in 2023, that’s a complete of $6,500 for savers beneath age 50). Customers must maintain the funds invested for 5 years to keep away from a potential price upon withdrawal.

In a faint echo of the brokerage app’s referral program, which rewarded customers with fractional shares of inventory for getting others to affix, a buyer on the waitlist can get earlier entry in the event that they advocate one other buyer who opens an account. Accounts have to be funded with exterior cash.

These opening an IRA can put money into a really useful basket of exchange-traded funds developed by Robinhood’s head of funding, or choose their very own mixture of shares and ETFs. Robinhood stated the really useful mixture of ETFs are primarily based on elements together with the consumer’s age, time horizon, principal purpose (progress or preservation), threat tolerance and stage of desired return. They’ve a mean expense ratio of about 0.04% or 0.05%.

“Now we have a big quantity of buy-and-hold prospects, and whereas this product has broad applicability, it was positively designed round their wants,” stated Sam Nordstrom, Robinhood’s supervisor of product administration.

For now, placing crypto in your IRA just isn’t an possibility, the corporate stated. 

Robinhood is thought extra for rapid-fire buying and selling than buy-and-hold investing. After introducing tens of millions of novice merchants to the inventory market in the course of the pandemic, declines in shares and cryptocurrencies amid rising rates of interest have made maintaining the momentum a problem. A decline in buying and selling exercise has damage revenues, though transactions rebounded barely within the third quarter.

–With help from Annie Massa.

To contact the creator of this story:

Suzanne Woolley in New York at [email protected]

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