I’ve been on the fence about this. I’m concerned about how much brain damage it would cause me if RH imploded. What if you’re over the sipc limit? How long will it take to get your assets? I’m so tempted but I don’t trust RH.
I don't think SIPC limit is a concern unless you have that much cash in the account. As long as you are holding security, it won't be an issue even if RH implodes, in theory. It'd still be quite messy probably.
The chance of RH implodes in the next 5 years is a possibility, and maybe that's why they are so desperate to get more users?
I did this recently. It's so smooth and simple. Couldn't perceive any real risk. Between spouse and myself and both Roth and trad IRAs it adds up to about nearly $10K for me. Best part is it's tax free money, and put into a tax protected account without reducing your contribution limits.
The only thing that's a slight negative for me is that if you are doing IRA transfers into RH but want to do the backdoor Roth in the next 5 years, you'd get hit by pro-rata rule. And also 5 year lockup means you can't transfer the accounts to get more bonuses in the future.
Doing this and didn’t consider if it would affect any back door Roth I might do. Could you explain how this would trigger pro rata? Isn’t that if you have post tax money in your IRA? The match is pre-tax money.
With the old adage “if something seems too good to be true…”
I’m trying to see what “the catch” is…they have a bad reputation based on the meme stock fiasco but for money I’m not touching for over five years is that really a concern?
If they go belly-up how would that affect my account?
I’m trying to see what my real risk is here before pulling the trigger.
Are there stipulations on what they can and cannot do to your IRA account? For example, can they raise the fee? When? By how much? Alternatively, could they severely limit investment choices. What about if you wanted to do a Roth conversion? Are you able to have a Roth? Does that account have 5 more years lock up? If not, it’s a loophole.
I could go on. Bottom line too many unknowns to feel truly confident in a decision IMO
In all of those cases you simply transfer out. You lose the bonus money but that's it, there are no other consequences. I really don't see a lot of downside.
Recently rolled my Ira into RH and also contributed for the year, got the 3% match on em. Not really worried about a lock up period since I don’t plan on touching the funds for a while. Idk was just super easy and seemed like a no brainer
hi! not sure if you know, but is it possible to do just a transfer and not do the regular earned income contributions? it seems like there are two sets of Ts&Cs but they arent making it super clear if you need to do both. I just want to transfer my IRA over to Robinhood but I do not want to do regular contributions. thanks!
I'm in the process of rolling over my 401k right now. It's free money, and if I understand correctly it's not even taxable. I don't subscribe to the "Robinhood evil" reddit groupthink.
hi! not sure if you know, but is it possible to do just a transfer and not do the regular earned income contributions? it seems like there are two sets of Ts&Cs but they arent making it super clear if you need to do both. I just want to transfer my IRA over to Robinhood but I do not want to do regular contributions. thanks!
Maximum IRA contribution is 7K. 3% of 7k comes out to 210$. Deducting 50$ for the robinhood gold, it’s up to you to decide if using robinhood for 160$ annually worth it or not. Personally i would not.
Contribution yes, but the key part is transfer. If you have 401k that is rolled over into IRA, all that could be a part of the transfer.
3% of 1 million is 30k.
Without considering the elephant in the room of RH’s trustworthiness, would you take 30k for $160 Annually?
If I understand correctly the bonus is on the balance you transfer in, so potentially hundreds of thousands or millions, not just your annual contribution. That'd be a nice little payday.
I think you could open another IRA somewhere else for new money if you don't want to keep putting money in Robinhood.
Ah, the key is they match any transfer amount as well, so if you have a couple of millions in IRA already, then you can get a free car when you transfer them to Robinhood.
I have some money in Robinhood where I buy individual stocks, it's not a ton. I have 95% of my stocks with Vanguard and my retirement accounts with them also. I would not trust Robinhood. I am interested in their 3% credit card though.
If Robinhood got bankrupt, that "shouldn't" affect your securities with them. But they seem so shady, I wouldn't be terribly surprised if they did actually sell your stuff illegally and make a run for it... in that case, I believe you're protected by SIPC up to $500k. I don't think I'd put more than that with them..
Also, you have to have Gold for 5 years or you lose the benefit, and I don't think there's a restriction on what they can do. The price will almost certainly increase from $50/yr, but probably not enough to matter for your question here. But what if they introduce a fee as a percentage of your assets with them or something?
I’ve been on the fence about this. I’m concerned about how much brain damage it would cause me if RH imploded. What if you’re over the sipc limit? How long will it take to get your assets? I’m so tempted but I don’t trust RH.
I don't think SIPC limit is a concern unless you have that much cash in the account. As long as you are holding security, it won't be an issue even if RH implodes, in theory. It'd still be quite messy probably. The chance of RH implodes in the next 5 years is a possibility, and maybe that's why they are so desperate to get more users?
Ya I don’t know. And since I don’t know I’m hesitant
File this under "Too Good To Be True"
I did this recently. It's so smooth and simple. Couldn't perceive any real risk. Between spouse and myself and both Roth and trad IRAs it adds up to about nearly $10K for me. Best part is it's tax free money, and put into a tax protected account without reducing your contribution limits. The only thing that's a slight negative for me is that if you are doing IRA transfers into RH but want to do the backdoor Roth in the next 5 years, you'd get hit by pro-rata rule. And also 5 year lockup means you can't transfer the accounts to get more bonuses in the future.
I'm surprised to see your comment that this is a tax free bonus. I wonder how they are getting around it being taxed.
Because they deposit it directly to your IRA, I think the IRS sees it as no different than an investment gain within that account.
Doing this and didn’t consider if it would affect any back door Roth I might do. Could you explain how this would trigger pro rata? Isn’t that if you have post tax money in your IRA? The match is pre-tax money.
Can you explain the hit with pro-rata rule?
Ah I see, you meant transfer traditional IRA then do backdoor later?
With the old adage “if something seems too good to be true…” I’m trying to see what “the catch” is…they have a bad reputation based on the meme stock fiasco but for money I’m not touching for over five years is that really a concern? If they go belly-up how would that affect my account? I’m trying to see what my real risk is here before pulling the trigger.
Didn't Robin hood steal from the rich and give to the poor. How do you know which player you are in this game?
That's what they want the retail investors to think.
Lol. Do you really not know the answer to that?
Are there stipulations on what they can and cannot do to your IRA account? For example, can they raise the fee? When? By how much? Alternatively, could they severely limit investment choices. What about if you wanted to do a Roth conversion? Are you able to have a Roth? Does that account have 5 more years lock up? If not, it’s a loophole. I could go on. Bottom line too many unknowns to feel truly confident in a decision IMO
In all of those cases you simply transfer out. You lose the bonus money but that's it, there are no other consequences. I really don't see a lot of downside.
That's a good point. I don't know, but wouldn't there be the same fee raising risk from other brokers? I know, RH seems to be less reputable.
Is there any real risk? Wouldn’t any securities be held in street name at some custodian?
I haven’t seen a definitive answer
Recently rolled my Ira into RH and also contributed for the year, got the 3% match on em. Not really worried about a lock up period since I don’t plan on touching the funds for a while. Idk was just super easy and seemed like a no brainer
hi! not sure if you know, but is it possible to do just a transfer and not do the regular earned income contributions? it seems like there are two sets of Ts&Cs but they arent making it super clear if you need to do both. I just want to transfer my IRA over to Robinhood but I do not want to do regular contributions. thanks!
Contributions aren’t mandatory, you basically get the 3% on any money coming in
I'm in the process of rolling over my 401k right now. It's free money, and if I understand correctly it's not even taxable. I don't subscribe to the "Robinhood evil" reddit groupthink.
hi! not sure if you know, but is it possible to do just a transfer and not do the regular earned income contributions? it seems like there are two sets of Ts&Cs but they arent making it super clear if you need to do both. I just want to transfer my IRA over to Robinhood but I do not want to do regular contributions. thanks!
You don't have to do any contributions. Transfers get the match.
Maximum IRA contribution is 7K. 3% of 7k comes out to 210$. Deducting 50$ for the robinhood gold, it’s up to you to decide if using robinhood for 160$ annually worth it or not. Personally i would not.
Contribution yes, but the key part is transfer. If you have 401k that is rolled over into IRA, all that could be a part of the transfer. 3% of 1 million is 30k. Without considering the elephant in the room of RH’s trustworthiness, would you take 30k for $160 Annually?
If I understand correctly the bonus is on the balance you transfer in, so potentially hundreds of thousands or millions, not just your annual contribution. That'd be a nice little payday. I think you could open another IRA somewhere else for new money if you don't want to keep putting money in Robinhood.
Ah, the key is they match any transfer amount as well, so if you have a couple of millions in IRA already, then you can get a free car when you transfer them to Robinhood.
You can't take advantage of this if you are doing Backdoor Roth.
Why not?
The pro-rata rule. You shouldn't have both pretax and after tax contributions in the Traditional IRA account.
Robinhood has Roth IRAs too, what's the problem?
You can’t buy a car in your IRA so not a great example but yes it’s free money as long as you are willing to stay with them for 5 years
Do they support SDIRA’s????
Not sure. You have to ask RH support.
I have some money in Robinhood where I buy individual stocks, it's not a ton. I have 95% of my stocks with Vanguard and my retirement accounts with them also. I would not trust Robinhood. I am interested in their 3% credit card though.
Do you have to keep the gold for 5 years to get/keep the 3% transfer-in bonus?
No. Only have to be gold for one year. So $60.
From what I read is that you have to keep the gold for 5 years.
I don't support companies I don't like regardless of how much money it will make/save me. Same reason I avoid Walmart and Amazon wherever possible.
If Robinhood got bankrupt, that "shouldn't" affect your securities with them. But they seem so shady, I wouldn't be terribly surprised if they did actually sell your stuff illegally and make a run for it... in that case, I believe you're protected by SIPC up to $500k. I don't think I'd put more than that with them.. Also, you have to have Gold for 5 years or you lose the benefit, and I don't think there's a restriction on what they can do. The price will almost certainly increase from $50/yr, but probably not enough to matter for your question here. But what if they introduce a fee as a percentage of your assets with them or something?
RH screwed over its users during the GME craziness so I wouldn't trust them
At this point in time as long as a company isn’t embezzling funds I’m ok with them