Robo-advisors are changing the way we invest, providing low cost portfolio management solutions. Choosing the best robo advisor for a Traditional IRA or the best robo advisor for a Roth IRA can get you started on the path to future financial security.
If you’re considering a Roth or Traditional IRA, there are multiple digital financial advisors that can help you build a diversified portfolio.
In this article you’ll find options for growing your robo advisor IRA and achieving your retirement goals.
All it takes is assessing the best robo-advisor for IRA’s, that fits your needs![toc]
*Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link.
What is a Robo-Advisor?
A robo-advisor is a virtual financial advisor that uses algorithms to manage your investments automatically.
Think of it as having a personal financial expert at your beck and call right on your phone or computer.
Robo-advisors make it easy to invest in a diversified portfolio tailored to your investment goals, risk tolerance, and timeline.
And since they’re automated – with minimal human intervention – they cost less than a traditional investment advisor, with some offering a minimum account of $0-$10.
The Best IRA Robo-Advisors
1. Wealthfront IRA: Best for Investment Choices
Wealthfront sounds like a fancy wealth management firm, but it’s actually one of the more approachable robo-advisors out there.
Even if you’re new to investing or don’t have much money to start with, Wealthfront is not intimidating.
You can open an account with a modest $500, and the app focuses on passive investing, meaning you don’t have to actively manage your investments. But, you CAN, if you desire!
Wealthfront diversifies your portfolio, according to your goals, time line and risk level. It also has a feature that searches for excess cash in your checking account and automatically invests it for you in qualifying account types.
In addition to passively managed investment portfolios, Wealthfront offers fee-free stock and fund investing, including fractional shares. If you prefer to customize your portfolio, you can add in ETFs, and Wealthfront will rebalance and manage those as well. Or, you can create your own portfolio of ETFs, for Wealthfront to manage.
Wealthfront’s fees are reasonable, making it a viable option for those looking to develop their retirement plan.
If you’re a higher-balance account holder, Wealthfront’s tax reduction and tax-loss harvesting strategies can save your money from Uncle Sam.
- Individual and joint taxable investment accounts, traditional and Roth IRAs, trusts, high-yield savings accounts, and 529 college saving accounts
- Minimum initial investment of $500
- Access to individual stocks
- Diverse ETFS, including real estate and natural resources
- The best digital financial planner that we have encountered
- High-yield savings account.
- Alternative investments that can protect your portfolio from inflation
- Daily tax-loss harvesting
- Automatic rebalancing
- 100’s of ETFs for portfolio cusomization
- $500 minimum is a bit steep for some
- No access to human advisors (although customer service reps are licensed financial representatives)
New clients are eligible for cash bonus, after funding an account.
2. M1 Finance: Best for Those Who Want Combined Robo-Advisor and Self-Directed Investing
What sets M1 Finance apart from other robo-advisors on this list is its vast array of individual stocks, ETFs and pre-made customized portfolios (or Pies). Investors can choose from over 60 prebuilt ‘Expert Pies’ that cater to various investing strategies.
These include passive investing, retirement funds, mimicking hedge funds, and socially-responsible investing.
Let’s say you want to construct a passive portfolio using two ETFs that track the global market. You can allocate your funds between them based on your risk preference.
Alternatively, you can create your own custom Pie (portfolio) by choosing your own holdings or combining them with an existing one.
M1’s Expert Pies include a range of options, including:
- Fundamental analysis
- Technical analysis
- Value Investing
- ‘Buy and Hold’
- Growth investing
- Income investing
- Small-cap investing
- Dividend reinvestment plans
And since M1 allows fractional share trading, you can make a Pie with as little as $100. There’s also no limit to how many Pies you want to create.
Once everything is set up, it’ll be managed for you automatically, including regular rebalancing.
- Fee-free investment management
- Fractional share trading
- Smart Transfers (easy transfers from your Invest to Spend accounts and vice versa)
- Custodial accounts
- Ongoing M1 Promo investment bonus of up to $5,000 or more, if you transfer your brokerage account to M1.
- Suite of features including M1 Crypto, M1 Spend, M1 Borrow, Rewards Card by M1 and more.
- Margin loans for competitive and low rates.
- Highly customizable portfolio
- Automatic rebalancing
- Minimum initial investment of $100, $10 for incremental investments
- Commission-free trading of stocks and ETFs
Read: M1 Roth IRA Review
- Not suited to active traders
- No tax-loss harvesting
- Limited financial calculators and tools for goal-planning
3. SoFi Invest: Best for Free Financial Advisor Access
It’s a natural step to check out SoFi Invest if have a SoFi loan or used their cash management account. With fee-free investment management and free financial advisor 30-minute planning sessions, SoFi Invest is ideal for new retirement investors considering opening a SoFi Roth IRA or SoFi Traditional IRA.
But if you’re new to SoFi in general, the company’s robo-advisor, SoFi Automated Investing is intriguing, as it combines low fees with access to free human financial consultations. These 30-minute phone meetings with qualified consultants connect you to a live financial advisor to discuss current and future financial planning.
SoFi Automated Investing is especially appealing to beginner investors because it allows you to see model portfolios before completing the account setup process.
You can set the intention for your investments, whether it’s for retirement, general investing, or a large purchase (house, education, wedding, vacation, etc.).
You’ll notice the absence of tax loss harvesting, margin, options, or other advanced trading opportunities at SoFi Automated Investing because it is intended for those who are getting their feet wet in the world of investing. Although the SoFi Active Investing does have stock and ETF trading.
And while SoFi doesn’t provide tax loss harvesting, they attempt to avoid tax-inefficient ETFs in taxable accounts. They will adjust holding in taxable and retirement accounts to keep your tax exposure low whenever they can.
- Outside account syncing for better financial insights
- Five risk-related standard portfolios
- Fee-free investment management
- Fee-free financial planning sessions
- Multiple goal tracking
- Well diversified portfolio with low cost ETFs
- One dollar to open and account and $5 to begin investing
- Allows for active and automated trading within one platform
- SEP IRA available for small business owners
- No ESG, sustainable investing portfolios available
- No tax-loss harvesting
4. Acorns: Best for Free Money
Acorns is a bit of a stand-out on this list because of its unique offerings and strategy. It acts as a robo-advisor that puts your spare change to work.
Acorns invests your extra cash, along with other contributions you make, into a carefully selected group of low-cost, diversified ETFs.
These include options like Vanguard S&P 500 and the iShares Core US Aggregate Bond. These ETFs provide broad exposure to stocks and bonds, ensuring that your investments are spread out.
You can fund your account in a couple of ways, including manual deposits, automatic recurring deposits, and “round-ups.” Acorns Round-Ups add the rounded dollar amount from purchases on your linked debit and credit cards once they reach an amount that you determine, from $1, $5 on up to 10 times round up. At the base $1 round up level, if you buy an item for $5.55, then $0.45 is automatically transferred into your investment account.
And to help you create the optimal portfolio for your needs, Acorns starts by asking you questions about your financial goals. This simple questionnaire is meant to assess your investment timeline and tolerance for risk. Of course, it will also take into account factors like your age, income, and net worth.
Acorns is a good fit for new investors, those struggling to save, and passive investors.
- Regular referral bonus promotions
- Works with a taxable investment account and IRAs – Traditional, Roth, Rollover, and SEP
- Educational, digestible content
- Customizable round ups, up to 10x max
- Investment accounts with tax advantages, IRAs, and quick cash access through a linked debit card
- Automatically invests spare change
- Breadth of financial products – Acorns Round-Ups, Acorns Found Money, Acorns Spend, Acorns Later, Acorns Early
- Higher management fees – for small accounts
- Narrow selection of portfolio options
- Limited customer support
5. Ellevest: Best for Women
At this point, it’s common knowledge that women’s earning potential is lower compared to men’s.
But one lesser-known fact is that their “earnings curve” over the course of a working lifetime is also structured differently. Ellevest presents itself as a solution, taking these variances into account. They aim to provide an investment manager designed to account for women’s financial situation. This is essential when investing with a particular goal in mind, as you want a realistic strategy to get there.
And even if you’re not a woman, you can still benefit from Ellevest as a goal-based, reasonably priced and diversified robo-advisor.
The platform is not exclusive to women. It’s for anyone who doesn’t want to rely on a generic approach to financial planning. Ellevest constructs its portfolios using low-cost ETFs across 21 asset classes. They also offer an “impact” portfolio that invests in companies promoting environmental, social, and governance goals, usually with a focus on those that benefit women.
This comes with tax minimization strategies that help you properly allocate investments into appropriate account types.
- Investing that factors in women’s generally lower incomes and longer lifespans
- Broad portfolio of low-cost ETFs
- Ellevest Plus and Ellevest Executive (two affordable service tiers)
- Access to human advisors for discounted prices
- No account minimum
- Focus on education – low fee a la carte sessions with career coaches and CFPs
- Low – subscription-based pricing
- Portfolio with a focus on women’s needs
- No tax-loss harvesting
- No week-end customer service
6. E*Trade: Best for Active Traders
If you’re looking for a hands-off robo-advisor, E*Trade, from Morgan Stanley, has you covered. The detailed initial questionnaire delves into your goals and risk tolerance and leads to a portfolio appropriate for your financial situation. Once you’ve approved your portfolio E*Trade Core Portfolios regularly rebalances your investments to maintain your preferred asset allocation.
But what if you’re more of an active trader who prefers a DIY approach? Well, E*TRADE is great for that as well. E*TRADE makes it easy for investors who want to take charge of their investments and execute trades on their own.
E*Trade is a haven for traders who need variety in their trading strategies. It offers a vast range of tools, including stock, mutual fund, ETF, and options screeners that allow you to apply filters to sort and analyze your investments.
For example, you can customize your portfolio by only selecting socially responsible ETFs that align with your values.
They also provide research, charting, and other educational resources (with finance news) that are regularly updated.
And with E*Trade Core Portfolios, you don’t have to juggle multiple accounts from different providers. Instead, you can see all your E*Trade accounts in one convenient location.
Whether you’re moving money in or out of your accounts, it’s all streamlined and hassle-free.
Lastly, let’s address the higher management fee for this platform. While this might seem steep to some, E*Trade’s ETFs come at fairly reasonable costs.
- Low-cost, commission-free, index-based ETFs
- Minimum initial investment of $500
- Highly customizable portfolios overseen by professionals
- Thorough risk questionnaire
- ESG and smart beta portfolio options
- Low investment-expense ratio
- Reliable customer support
- No tax-loss harvesting
- 0.30% annual management fee is on the higher end for all-digital robo-advisors
- Opening a brokerage account is required before opening a Core Portfolios account
7. Schwab Intelligent Portfolios: Best for Fee-Free Investment Management
When it comes to investing, every penny counts, so finding a robo-advisor for an affordable fee is key.
‘Schwab Intelligent Portfolios’ fits the bill with its fee-free digital investment management. The proviso is that you need at least $5,000 as a minimum initial investment and a willingness to hold a minimum of 8% to 10% cash allocation.
The Schwab Intelligent Portfolios Premium level takes it up a notch by providing access to financial planners for low-subscription pricing. Although you will need $25,000 to get started with the Premium service. The Premium fee includes a one-time $300 setup fee and a monthly $30 management fee. Those with higher account balances will pay a lower percent of their account in management fees with the fixed monthly subscription fee. The Schwab IRA is an affordable solution for cost conscious investors too.
This is because you’ll only pay that one flat monthly price no matter how much money you pump into your account.
Other robo-advisors take a cut of your assets, so your fees grow alongside your earnings.
Schwab Intelligent Portfolio has a diverse lineup of funds to choose from, offering a range of 51 low-fee ETFs. You portfolio includes approximately 20 funds that align with your objectives and risk tolerance.
And unlike many other robo-advisors, Schwab’s ETF options include specialized funds like real estate, commodity and gold funds.
- Fee-free investment management
- Three broad portfolio strategies (global, US-based, and income-focused)
- Access to the Charles Schwab features and services, including physical branch locations.
- Wide ETF selection including smart beta and strategy ETFs
- Access to human advisors – with the Premium level
- Broad retirement account options including Traditional, Roth, Rollover, SEP and SIMPLE IRAs
- Requires at least $50,000 to qualify for tax-loss harvesting
- Higher minimum initial investment of $5,000
- Prioritizes Schwab funds
8. Betterment: Best for Goal-based Retirement Investors
Looking to save up or something big like a house, your kid’s higher education, or your retirement? Then Betterment might just be the robo-advisor for you.
With no minimum account maintenance requirement, you can start investing with as little as $10.
The allocation of your assets is customized based on your goals. For example, an emergency fund portfolio typically includes 15% stocks and 85% bonds, while a general investment fund for a 35-year-old would hold 90% stocks.
Betterment allows you to sync your outside accounts with your Betterment account. Once you do, it will estimate if you’re on track to meeting your retirement goals.
Betterment offers an all digital version and a Premium Version for an added fee, and access to financial advisors.
Digital clients can purchase a la carte financial planning packages to help with concerns like college and retirement planning for additional fees.
- Reporting feature (details financial overview with net worth, goal progression, and investment performance)
- Guided crypto investing
- Standard tax-loss harvesting
- Custom portfolios (Broad Impact, Climate Impact, Innovative Technology, Goldman Sachs Smart Beta, BlackRock Target Income, Flexible Portfolio)
- Goal-focused tools
- Holistic portfolio view, considers outside accounts.
- Extremely low minimum deposit of $10
- High yield cash management accounts, through partner banks, complete with Visa debit card
- Risky emergency fund portfolio
- No direct indexing or individual stocks
9. Fidelity Go: Best for Rollovers
Fidelity Go is an excellent option for new investors who want a simple, automated approach to portfolio management. Plus, it’s ideal for existing Fidelity clients because of the seamless integration.
Typically, robo-advisors rely heavily on algorithms and require minimal manual intervention from analysts, brokers, and users once they’re set up. Fidelity Go takes a different approach. Actual humans oversee day-to-day investment and trading decisions for portfolios.
So, if you’re hesitant to entrust your finances to a “robot,” Fidelity Go could be a great option for you.
While there aren’t any live financial advisors until the portfolio reaches $25,000. As is customary with digital investment plans, the platform uses a questionnaire to match you with a tailored portfolio.
Another benefit of Fidelity Go is that you can preview a recommended portfolio and sample investments without having to sign up or provide personal information.
Plus, the Target Tracking feature allows you to set goals and assess your progress, all while benefitting from Fidelity’s other tools.
As for educational resources, Fidelity Go has a wealth of them available to its customers. They can help you feel more levelheaded about your investment decisions.
And if you’re looking to roll over your investments, Fidelity Go can facilitate very easily, too.
- Fidelity Integration (free robo offering for those who already have an IRA or taxable account with Fidelity)
- Financial coaches for all account holders with
- Convenient rollovers
- Minimum initial investment of $10
- Low-cost mutual funds
- No account management fees for accounts below $25,000
- Access to financial coaches for accounts worth more than $25,000, for 0.35% AUM fee
- Excellent customer support
- Fidelity Flex funds within the portfolios are fee-free
- There are robo-advisors with lower investment management fees and fee free financial advising, like SoFi Automated Investing
- No tax loss harvesting available
10. Vanguard Personal Advisor: Best for Seasoned Savers
This hybrid robo-advisor caters to intermediate investors who are in the early stages of accumulating significant savings across various investment accounts.
Vanguard will put together a portfolio of index funds or index plus actively managed funds tailored to your investment goals at a bare minimum cost. The financial management and planning is guided by your relationship with a financial advisor. The $50,000 minimum is reasonable for a hybrid robo advisor., although Schwab Intelligent Portfolios Premium only requires $25,000 for their hybrid robo advisor with financial advisory contact.
Vanguard leverages almost five decades of experience and its solid position in the industry to offer low fees. And with that, the Vanguard Personal Advisor services are considered premium at a fraction of the cost.
So, if you’re a seasoned saver with a good chunk of change looking to get a little extra help refining your strategy, PAS has your back.
If you’re new to retirement investing then the Vanguard Digital Advisor, which only requires a minimum of $3,000 might be for you. It lacks the financial advisory access but does offer both passive and actively managed portfolios.
- Customizable portfolios
- Retirement Outlook and Debt Payoff Calculators
- Access to the Vanguard brand products and services
- Multiple goal tracking
- Simplified investing low-cost approach
- Passive and actively managed portfolio options
- Access to financial consultants at a reasonable price point
- Only Vanguard funds
- No access to financial advisors at the Digital level
Best Robo Advisors for Retirement Accounts – Wrap up
Setting up and managing an IRA can be a complex and time-consuming process. From choosing the right investments to monitoring your portfolio, there’s a lot to consider when it comes to saving for retirement.
That’s where a robo-advisor can make a world of difference, especially if you’re a beginner or you feel iffy about handing your savings over to expensive brokers.
You can take advantage of the complex algorithms that enable robo-advisors to make sound financial decisions at lower costs. This can help you avoid higher fees and commissions, which can add up over time and eat into your returns.
And with a robo-advisor’s data-driven insights, you can optimize your investment strategy based on your individual goals, risk tolerance, earning capacity, values, and time horizon.
Most robo-advisors also provide ongoing monitoring and rebalancing so that you can take a calmer, hands-off approach. So, whether you’re a consummate investor or just getting started, a robo-advisor can help take your IRA to the next level.
- 6 Best Lowest Fee Robo Advisors
- M1 finance Roth IRA Review
- Wealthfront vs Fidelity Go Comparison
- Rebalance IRA Review
- Robo Advisor Fees From Lowest To Highest
Guest author: Brooks Conkle, Entrepreneur and Side-Hustler
Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t believe is valuable
*Betterment is not a licensed tax advisor. Tax Loss Harvesting+ (TLH+) is not suitable for all investors. Read more at https://www.betterment.com/legal/tax-loss-harvesting and consider your personal circumstances before deciding whether to utilize Betterment’s TLH+ feature. Investing involves risk. Performance not guaranteed.
**Cash Reserve is only available to clients of Betterment LLC, which is not a bank, and cash transfers to program banks are conducted through the clients’ brokerage accounts at Betterment Securities. For Cash Reserve (“CR”), Betterment LLC only receives compensation from our program banks; Betterment LLC and Betterment Securities do not charge fees on your CR balance. Checking accounts and the Betterment Visa Debit Card provided and issued by nbkc bank, Member FDIC. Checking made available through Betterment Financial LLC. Neither Betterment Financial LLC, nor any of their affiliates, is a bank. Betterment Financial LLC reimburses ATM fees and the Visa® 1% foreign transaction fee worldwide, everywhere Visa is accepted.