Matching employee contributions is not a new concept on its own — 401(k) has been doing just that since 1978 as part of the Revenue Act. However, it is not common for stock brokers, such as Robinhood or Acorns, to provide IRA match accounts. The few that do typically offer a 1% to 3% incentive to transfer your IRA accounts or leftover 401(k).
While the idea of free money is quite appealing, watch out for the IRS-defined contribution limits and the clawback period, which, at some brokerage firms, can go up to four years.
Top 3 IRA Match Account Brokers for Matching Funds
Here are the top IRA match accounts, considering important features like the match percentage, the contribution amount required to benefit and the clawback period — or rather the amount of time the money you invested has to stay dormant.
Robinhood Retirement
Robinhood is a commission-free brokerage firm that provides trading in stocks, options, exchange-traded funds (ETFs) and cryptocurrencies through a user-friendly mobile app. It offers both a free IRA match account and a paid one. Both Robinhood IRA match accounts offer match percentages that can increase your retirement fund annually by 1% or 3%.
By paying $50 annually, or $5 monthly, for the subscription to Robinhood Gold, you can capitalize on the 3% Robinhood IRA match. The clawback period for both free and paid users is five years. Lastly, their ongoing promotion seems quite lucrative: transfer your IRA account funds or old 401(k) by April 30 and receive an unlimited 3% IRA match.
| Minimum deposit | $0 |
|---|---|
| Retirement account types | Roth, Traditional, Rollover |
| Annual fee | $0 per month |
| IRA match | Up to 3% |
| Minimum deposit | $0 |
|---|---|
| Retirement account types | Roth, Traditional, Rollover |
| Annual fee | $0 per month |
| IRA match | Up to 3% |
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SoFi IRA
SoFi is an online financial services company that offers investing, banking and lending products, including commission-free stock and ETF trading. The SoFi IRA match account offers a 1% match on rollovers and contributions, and the necessary idle time is two years.
There are no contribution limits on rollover from your 401(k), as rollovers are not considered new contributions by the IRS. However, the minimum rollover to get the 401(k) 1% match bonus from SoFi is $20,000. You’ll need to use a special link on SoFi’s site to get the deal.
| Minimum deposit | $0 |
|---|---|
| Retirement account types | Roth, Traditional, SEP, Rollover |
| Annual fee | $0 per month |
| IRA match | 1% |
| Minimum deposit | $0 |
|---|---|
| Retirement account types | Roth, Traditional, SEP, Rollover |
| Annual fee | $0 per month |
| IRA match | 1% |
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Acorns Later
Acorns provides an IRA match account through its Acorns Later Match program, offering eligible users bonus contributions to their retirement accounts. Similarly to an employer contributing to a 401(k), Acorns Later Match invests money into your Acorns IRA match account up to a contribution limit.
Working on a subscription-based plan, there are two options. Acorns Silver offers 1% matching funds for $6 per month, and Acorns Gold provides 3% matching funds for $12 per month. The clawback period is two years for both subscriptions.
| Minimum deposit | $0 |
|---|---|
| Retirement account types | Roth, Traditional, SEP |
| Annual fee | $3 per month |
| IRA match | 1% or 3% depending on your subscription |
| Minimum deposit | $0 |
|---|---|
| Retirement account types | Roth, Traditional, SEP |
| Annual fee | $3 per month |
| IRA match | 1% or 3% depending on your subscription |
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How does IRA matching work?
IRA matching is very similar to how a 401(k) works. Instead of employers matching contributions, brokerage firms do.
The similarities don’t end there. Like 401(k)s, the IRS imposes contribution limits on your individual deposits. Rollovers from your 401(k) aren’t subject to these limits.
Some brokers, like SoFi, impose certain requirements for matching, such as rolling over more than $20,000.
What is the maximum I can contribute and earn?
What’s most appealing about an IRA match account is the seemingly free money. However, due to contribution limits, which are $7,000 for people under the age of 50 and $8,000 for people over 50, the payout is not that competitive.
If the match percentage is 1%, the most an investor can earn is $70, or $80 if the person is over 50 years of age. And if the match funds percentage is 3%, the amount you can earn jumps up to $210 or $240, respectively.(1)
Pros and cons of choosing a broker with IRA matching
Pros
- Retirement savings boost. IRA matching adds move savings to your retirement funds, which compound over time.
- Encourages consistent investing. An IRA match can make contributions more rewarding and encourage you to invest consistently to earn that free bonus.
- Upwards market fluctuations. Neither brokers nor the IRS are concerned with the value of funds in your account. Any growth is considered interest and doesn’t count toward your contribution limit.
Cons
- Overlooking other features. Picking a broker purely based on one feature while overlooking others might not provide you with everything you need.
- Long idle period. Depending on the broker, the period in which you must keep the money in the accounts to maintain your bonus earnings can range from one to five years.
Bottom line
IRA match accounts are a great way to enhance your retirement savings through additional contributions from brokers. By evaluating various options like Robinhood, SoFi and Acorns, you can maximize your retirement funds while considering other factors such as clawback periods, contribution limits and fees.
If IRA matching isn’t your main concern, consider other top brokers that offer a variety of features to fit your financial goals and investment preferences.
Frequently asked questions
Is a 1% match good?
A 1% match is better than nothing, but it’s not so influential on its own. If you roll over $10,000 from your 401(k), the broker will contribute 1% or $100. There are better options than 1% IRA match accounts, as some brokers offer up to a 3% funds match.
When choosing your IRA match broker, it is important to consider other factors, including the clawback period, fees and contribution limits.
What is the best IRA broker for fund matching?
The best IRA broker for fund matching may be Robinhood until April 30. Until then, there’s no contribution limit on the rollover from your 401(k) into Robinhood IRA match accounts. After that date, the five-year clawback period becomes less competitive compared to other IRA match accounts.
If your investment strategy requires a milder but consistent option, the SoFi IRA match account might be right for you. However, the best IRA broker is the one that suits your needs, budget and investment strategy.
Is there a match for a Roth IRA?
Roth IRAs do not come with employer-matching contributions because they are individual retirement accounts rather than workplace-sponsored plans. Unlike 401(k) accounts, which often include employer matching as a benefit, Roth IRAs are funded entirely by the account holder with after-tax dollars.
However, some brokerage firms, like Robinhood, offer promotional incentives or rewards that function similarly to a Roth IRA match account, providing additional contributions based on deposits or transfers. While these offers can enhance retirement savings, they are not the same as traditional employer matching and vary by provider.
For example, the IRS notes that employer matching contributions are typically made to employer-sponsored retirement plans like 401(k)s, not to individual accounts like Roth IRAs.(2)
