Robinhood delivering IRA match

Robinhood announced it is offering individual retirement accounts (IRAs) with a 1% match on eligible contributions. 

The waitlist for Robinhood Retirement opened up Tuesday, enabling customers to get early access to it “on a rolling basis” over the course of the next few weeks, according to the retail trading platform. The retirement program will become open to everyone next month.

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Through Robinhood Retirement, customers will be able to pick either a traditional or Roth IRA, where they can “build a custom portfolio” by investing in stocks and ETFs of their choosing or recommended by the app, Robinhood said. The retail trading platform can make the IRA portfolio recommendations after users “answer a few questions to help us better understand your investing needs and retirement goals,” according to a Help Center page.

The 1% IRA match by Robinhood applies to new contributions “from any linked external bank account” up to the limits set by the Internal Revenue Service (IRS) each year, according to Robinhood. 

To keep the 1% match, customers cannot withdraw their contributions earlier than five years, unless their “remaining IRA balance stays at or above your contribution amount that earned the IRA Match,” Robinhood said on its website.

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In the blog post announcing the IRAs and 1% matching, Robinhood said it “believe[s] that saving for retirement should be easy and accessible to all, and not dependent on where or how you work.”

“People are relying on themselves. They’re taking on gig work, side hustles and building their own companies,” the company said in the blog post. “Tools that can make it easier to save for retirement – such as automatic transfers from a paycheck or contribution matching — are often not available to the gig economy — which makes up as much as 40% of America’s total workforce.”

For 2022, the contribution limit for IRAs is $6,000 for people below 50 and $7,000 for those above that age. The IRS’s limit for 2023 is slightly higher, with ages below 50 allowed to contribute $6,500 and ages 50 and up allowed $7,500.

ROBINHOOD LAYS OFF 9% OF ITS STAFF

Robinhood, which went public in mid-2021, reported generating $361 million in third-quarter net revenues, compared to $318 million in the prior quarter and $365 million in last year’s third quarter. Its net loss came in at $175 million, an 87% drop from the $1.317 billion net loss reported in the same period in 2021.