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M1 Finance Roth IRA: Is it Right for Your Retirement?

M1 Finance Roth IRA: Is it Right for Your Retirement?

One of the things that investors prize above all when considering using a new investment service or platform is flexibility. M1 Finance is a tool that should satisfy most users’ need for flexibility; it offers a range of robo-advisor services with the option of customizing your portfolio. If you are specifically considering setting yourself up for retirement and looking at opening a Roth IRA (Individual Retirement Account), you can’t go wrong with an M1 Finance Roth IRA

Introduction to Roth IRAs

You’re probably familiar with traditional IRAs, where you make before tax contributions that grow with tax deference and are then taxed upon withdrawal. In contrast, Roth IRAs contributions are made after tax and are not taxed at withdrawal.

There are numerous similarities between the two types of retirement accounts. Investors are allowed contributions of up to $6,000 a year until the age of 50. After the age of 50, you can still contribute $6,000 per year with up to $1,000 of annual “catch-up” space allowed to bring your total annual contribution to $7,000. Your money grows with tax deference, and then is taxed upon withdrawal. You are allowed to begin withdrawal at age 59 and a half, and are required to start by age 70 and a half. 

That said, there are a few differences in how contributions and withdrawals work. A traditional IRA will penalize you for withdrawals before the age of 59 and a half, and you must stop making contributions at the age of 70 and a half. Roth IRAs do not penalize early withdrawals and allow for continued contributions. Additionally, for those wondering can life insurance be tax deductible; because of the nature of the two types of accounts it should be clearly understood that traditional IRA contributions are tax deductible with Roth IRA contributions are not.

Before deciding which type of retirement account is right for you, it is important to ensure you fully understand all of the tax, contribution and withdrawal implications.

M1 Finance Roth IRA: Right For You?

If you’ve settled on investing with a Roth IRA, you may be looking for an investing platform to open an account and manage your money with. Chicago-based M1 Finance is a great choice. It has been in business since 2015 and manages billions of dollars in assets. Further, it offers a strong suite of investment options to help you position your M1 Finance Roth IRA for growth. Consider signing up today for this low-to-no-fee investment service.

One of the ways that M1 Finance meets investor needs is through flexibility. You can use their expert-based robo-advisor services, or customize your portfolio yourself. One tool through which this can be achieved is what they term “pies.” Your portfolio can be made up of multiple pies – for example, a stock pie or an ETF pie – and within each pie there are “slices” of individual assets, such as specific stocks. You can pick pies that they have designed to achieve certain investment goals, or you can build your own customized pies. While you cannot invest in mutual funds with M1 Finance, your M1 Finance Roth IRA can contain fractional shares, a great way to diversify your investments.

Minimal Fees, Flexible Service

Another reason to look closely at an M1 Finance Roth IRA is the low fees they offer. In fact, M1 Finance does not charge any management fees – a truly welcome surprise in the online investing world. They make their money from other services that they provide, such as a credit service called M1 Borrow. You’ll be allowed to borrow up to 35% of the value of your portfolio at 3.5% interest. 

While M1 Finance meets most investor needs and offers a robust platform to maximize your M1 Finance Roth IRA’s growth, their premium service called M1 Plus is also available for the reasonable cost of $125/year. It will help you save should you choose to take advantage of M1’s other features, including by giving you reduced borrowing rates through M1 Borrow and greater cash back and ATM fee reimbursements if you decide to use M1 Spend to set up a checking account. 

M1 Finance Roth IRA in Review

We have established a comparison between a traditional IRA and a Roth IRA, including similarities and differences in how they allow you to make contributions and withdraw funds. If you have considered both options and landed on the Roth IRA for your unique circumstances, you should be satisfied with the services offered through M1 Finance.

Your M1 Finance Roth IRA won’t cost you any fees to manage on an on-going basis, and you will have flexibility as to whether you want your Roth IRA guided by M1’s robo-advisor service or prefer to pick your own assets. You’ll also have access to other services that may be of interest, such as credit through M1 Borrow and checking/spending accounts through M1 Spend

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