For me, a 3% bonus on IRA contributions is not worth the effort for future years.Now if throw in the inflation as well as the price increases for Robinhood Gold and it may not be worth the effort.If you started at 25 and maxed out the Roth (assuming $6500 per year), at 8% returns you'd have an extra $56705 (2.7%) at 65 with this match.
I don't even know if I can do it at Robinhood since I can't make direct Roth contributions and have to do the backdoor Roth, and the terms seem to say that a Roth conversion forfeits the match from the Traditional contribution. Even if that were the case, I'd be paying taxes on the conversion, which almost halves the bonus at my marginal tax rates.
Assuming a 40% marginal tax rate and a gold cost of $6.99/month in future years as stated in the fee schedule, the benefit would be:
($7000 * 0.03 * (1 - 40%)) - ($6.99 * 12) = $42.12, or less than 0.6% bonus for a 5 year holding period.
This year, I did the backdoor Roth at another brokerage, so I can transfer it in along with other Roth IRA funds for a 3% match on everything. However, I don't plan to consider adding more funds to Robinhood unless they bring back the 3% transfer bonus next year, since I hope to be able to transfer in $40K+ a year from Roth sources.
Statistics: Posted by Lyrrad — Sun Feb 25, 2024 2:08 pm — Replies 1028 — Views 69969