Best Robo Advisors for Roth IRAs

Best Robo Advisors for Roth IRAs

Platforms like Wealthfront, Betterment, and Ellevest can help you maximize your retirement savings, without lifting a finger yourself.

Best Robo Advisors for Roth IRAs
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Published Jan 4, 2022Updated Jan 6, 2022

Retirement

Retirement

Robo Advisor

Robo Advisor

Tax Advantaged

Tax Advantaged

A Roth IRA can be a great way to save for retirement, especially if you expect to have a higher income in retirement than you do now. While you won't see any immediate tax benefit, as your contributions are made with after-tax money, you will enjoy tax-free growth, and you can make withdrawals tax-free.


But overseeing your own retirement account might not be something you currently have the time and energy to do—especially as you're working to increase your income. Enter robo advisors, which can take investing for retirement and Roth IRA management off your hands, often for a low fee. Plus, if you choose a Roth IRA with one of the best robo advisors for tax-loss harvesting, you can really maximize the tax efficiency of your retirement savings. Here's a look at some of the best robo advisors for Roth IRAs.

Choosing the best robo advisor for Roth IRAs

Platform

Minimum Investment

Fees

Roth IRA offerings

Wealthfront$5000.25%Full Roth IRA conversions supported. Compatible with automated savings.
SoFi$50%Access to financial advisors for help. Roll over a 401(k) to a Roth IRA.
Betterment$00.25%No tax impact to transfer an existing Roth IRA. Prevents contributions beyond limits.
Fidelity Go$00% (for accounts under $10k)Invest in no expense ratio mutual funds. Rollover IRAs also available.
Ellevest$5$5Easily track your yearly contributions. Get personalized retirement projections.
M1$1000%Option to build your retirement strategy. Transfer an IRA or roll over a 401(k).

Wealthfront

  • $500 minimum to get started
  • Supports full Roth IRA conversions from Traditional or SEP IRAs
  • Investment options including stocks, bonds, ETFs, real estate and natural resources 

 

A Roth IRA is one of a number of investment account types that the robo advisor Wealthfront supports. If you have an existing Roth IRA, you can easily transfer it to Wealthfront by opening a Roth IRA at Wealthfront. Or, if you already have a Traditional or SEP IRA with Wealthfront, you can fully convert that account to a Roth IRA for no fee.

As with any account at Wealthfront, you'll need a minimum investment of $500 to get started, and will owe an annual advisory fee of 0.25% of your assets under the management of Wealthfront. Once your account is set up, you can keep building it through automated savings, with which Roth IRA accounts are compatible. Available investment options include standards like stocks, bonds, ETFs and cash, and can extend to real estate, natural resources and dividend stocks.

SoFi

  • Low $5 minimum to start investing
  • No management fees
  • Option to schedule an appointment with a live advisor for help

 

If you've decided a Roth IRA is right for you, SoFi Automated Investing is another robo advisor that offers this account option. Should you have an existing employer 401(k) plan you'd like to roll over, SoFi will help you with a transfer into one of its IRA accounts, including a Roth IRA. Even better, it's possible to schedule some time with a live advisor to help you with setup.

While there's a low minimum investment requirement of just $5 to get started and no SoFi management fee, your investments are limited to a mix of ETFs. Your asset allocation will depend on your investing goals.

Betterment

  • No minimum to get started
  • Transfer an existing Roth IRA without tax impacts
  • Include socially responsible investing options in your portfolio

 

Betterment shines a spotlight on Roth IRAs on its website, offering a full rundown of this investment account option it offers. You can easily transfer an existing Roth IRA without facing any capital gains tax impacts, and as you get set up, you can also run through the robo advisor's goal-based portfolio recommendations and personalized advice on saving for retirement. Betterment allows you to convert traditional IRAs and 401(k) plans into your Roth IRA as well.

You can set up automatic transfers to your Roth IRA with Betterment with no worries, too, because the robo advisor's technology automatically prevents you from exceeding annual Roth IRA contribution limits. Plus, your portfolio choices will extend to socially responsible investing options.

Though there's no minimum to get started, Betterment does charge a 0.25% annual fee.

Fidelity Go

  • $0 minimum to open an account, and just $10 to start investing
  • No advisory fee on accounts under $10k
  • Investments comprised of low-cost Fidelity Flex® mutual funds

 

With Fidelity Go, there's no minimum balance needed to open an account, and you'll need just $10 to start investing. You won't pay an advisory fee for accounts under $10,000. Thereafter, you'll owe $3 a month for accounts between $10,000–$49,999, and 0.35% a year on accounts of $50,000 and over.

Fidelity Go offers Roth IRAs, and there are also rollover IRAs available if you would like to transfer funds from your employer-sponsored retirement account into an IRA. Accounts are comprised of Fidelity Flex® mutual funds, which can hold domestic stocks, foreign stocks, bonds or short-term investments, depending on your personalized investment strategy. Notably, these funds do not charge management fees and, for the most part, also don't have fund expenses.

Ellevest

  • Designed with women's unique financial needs in mind
  • $5 monthly fee to be able to open a retirement fund
  • Track your retirement savings and forecast future income

 

What makes Ellevest a unique option among the best robo advisors for Roth IRAs is that it's a platform built by women, specifically for women. The platform's investments factor in financial concerns unique to women, such as pay gaps and career breaks. That being said, anyone — men and non-binary people included — can use Ellevest's services.

You'll need just $5 to get started, but you will face a monthly fee of $5 in order to be able to open a retirement fund with Ellevest. This will include all of the financial basics (investing, banking and savings) that are part of the Ellevest Essential package for $1 a month, with the addition of a 30% discount on one-on-one financial coaching.

Plus, Ellevest makes it easy to stay on top of retirement savings by offering retirement projections forecasting your anticipated retirement income and showing all of your Roth IRA contributions thus far in a given tax year in your account summary tab.

M1

  • Required investment of $100 to get started
  • Develop your own portfolio, choosing from stocks and ETFs or preset models
  • No management fee, but ​​$100 fee to close your IRA

 

The robo advisor M1 allows for a more hands-on touch when it comes to building your retirement account. It's up to the user to develop the retirement strategy they feel is right for them, choosing from the available stocks or ETFs, or opting for one of the platform's over 80 preset asset allocations. You can even add further diversification to your portfolio by investing in fractional shares.

M1 also allows you to consolidate your retirement savings by rolling over an old 401(k) plan or transferring an existing IRA to the platform. You'll need a minimum investment of $100 to open an account. While there are no management fees or trading commissions, you will run into a $100 fee if you should choose to close your IRA.

Frequently asked questions

What is a Roth IRA?

A Roth IRA is a type of individual retirement account to which you contribute after-tax dollars that then can grow and be withdrawn tax-free. You're allowed to start making tax- and penalty-free withdrawals from a Roth IRA after you reach the age of 59 1/2 and once the account has been open for at least five years. However, you're not required to make withdrawals at any time, meaning your funds can keep growing even once you've retired. You also can contribute at any age, though you must meet income requirements in order to be eligible to do so.

What are Roth IRA contribution limits?

For 2021 and 2022, the Roth IRA contribution limits were $6,000 per year, or $7,000 if you are age 50 or older.

Why should I open a Roth IRA with a robo advisor?

Robo advisors can be a great option for managing your Roth IRA because of their low annual fees that are flat for your entire account balance. By using a robo advisor for your Roth IRA, you'll hand over the management of your account, with the robo advisor keeping an eye on whether your asset allocation is still in line with your retirement goals and, in some cases, if you've hit contribution limits for the year yet. Some robo advisors even allow you to touch base with a live financial advisor should any questions arise in connection with your Roth IRA.

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