M1 Finance Roth IRA | Is This A Good Retirement Account #Best Education Page #Online Earning

- So, in this video, we are going to be talking about

the M1 Finance Roth IRA and talking about whether

or not this is a good option for those looking

to open up a Roth IRA right now.

Now, before I get into the video,

I just wanna mention two things really quick.

Number one, if you guys do decide

you wanna open up an account

with M1 Finance after watching this video,

there's going to be a link down in the description below.

It is an affiliate link, so I do earn a small commission

if you use that link.

Your use of that link is totally optional,

but if you decide you wanna give back

to me at no additional cost to you,

that link is provided there if you want to use it.

And then, second of all, I've been getting a lot

of questions from people about M1 Finance,

how to open up an account, how to build a portfolio,

how the whole thing works, and so what I decided to do is,

I put together a completely free 30-minute video training

teaching you exactly how to use M1 Finance step-by-step,

and that is also gonna be linked up

in the description below if you guys wanna check out

that free training on how to use M1 Finance

as a complete beginner.

But that being said, specifically,

we're gonna be talking about the M1 Finance Roth IRA,

and one of the reasons that I really like M1 Finance is

because they offer a retirement account

with no commissions or fees associated with it,

which is not something that you're seeing

from other investing platforms out there.

While they may offer retirement accounts,

it's usually brokerages that charge commissions

or have high minimum account balances.

So, the very first thing that we have

to mention here is that the minimum

to open up a retirement account

with M1 Finance is slightly higher

than the traditional brokerage account.

So, to open a traditional brokerage account with M1 Finance,

it's a $100 minimum, but for the retirement account,

it is going to be a $500 minimum

to open up a retirement account with M1 Finance.

Now, the most common type of account

that people are often looking

to open is called the Roth IRA,

and that is exactly what you can open here with M1 Finance.

And if you guys aren't familiar with what that account is,

it's an account that allows you

to contribute post-tax income

and then grow that money tax-free.

So, I just wanna go over a couple

of quick pointers here on the Roth IRA

so you guys are familiar.

I've done very in-depth videos about them,

but I'll give you guys the CliffsNotes here.

So, with the Roth IRA, you are contributing post-tax income,

so it's money you've already paid taxes on,

but because of that reason, if you invest it in the Roth IRA

and you don't touch it until you reach the retirement age,

you are allowed to, basically, let your money grow tax-free.

Now, the added benefit to the Roth IRA is

that you are allowed to take out your contributions

at any point in time tax-free and penalty-free.

If you were to try to take money out of a 401(k),

for example, you're gonna get hit with taxes and penalties.

So, let's say, for example, you had $5,000 in a Roth IRA,

and over five years, that grew to $6,000, we'll say.

Well, you would be able to take out your $5,000

of contributions any point in time tax-free

and penalty-free.

You just can't take out the $1000 of earnings

because that is when you would pay taxes and penalties.

So, I really like the Roth IRA

because it gives you that option

to take that money out if you need it

for any certain reason.

Now, as far as the Roth IRA goes,

there are contribution limits

as far as how much money you can contribute per year,

and there also are income limits,

but the income limits are well over $100,000,

so most people fall under that limit,

meaning, they can directly contribute to a Roth IRA.

But that being said, for this year,

the contribution limit is $6,000,

or if you are over 50 years old, it is $7,000

because they give you additional incentive

to contribute if you are closer to retirement.

Now, as far as M1 Finance goes,

is this a good place to open up a Roth IRA?

In my opinion, based on the features

they are offering investors, I think it's a great platform

for a Roth IRA.

For one reason, they offer target-date retirement funds,

which is, in my opinion, one of the best options

for investing with a Roth IRA.

And essentially, what that is,

you basically go in there and you put in what date

or what year you plan on retiring, and then based on that,

you pick whether you wanna have an aggressive, a moderate,

or a conservative portfolio,

and then M1 Finance handles the rest for you.

They're going to rebalance and reallocate

that portfolio accordingly,

and you don't have to even touch it.

So, for example, somebody who's younger,

they have a greater risk tolerance

and they can have more of their money involved in equities

or stocks, whereas, when you get older,

you wanna have more money involved in bonds,

which is a safer investment but lower return,

and so they're going to adjust that risk spread

as you get closer to retirement automatically.

So, one of the easiest ways

to do this is to open up a Roth IRA with M1 Finance

and simply invest your money

in a target-date retirement fund,

where you just select when you're gonna retire

and select conservative, aggressive, or moderate,

and then you just continue to contribute

that money every single year,

and then you pretty much forget about it.

So, that is one option you have here with M1 Finance.

Another option, if you want to be more involved

with your investments, you can build your own portfolio

from scratch and determine exactly

what you want to invest in.

One of the things that some people don't like

with Roth IRAs and retirement accounts is,

you often have to just invest that money into funds,

you know, mutual funds or index funds,

but M1 Finance lets you invest it in whatever you want.

So, if you wanna put a portion

of your Roth IRA into Tesla stock or Amazon stock,

for example, or something more exciting like that,

well, you can do exactly that

through the M1 Finance investing app.

So, you can go the route of investing

in the pre-built portfolios that are offered

to you completely free or you can go ahead

and build your own portfolio from scratch

and choose exactly what you're investing in.

And then, beyond that, as I'm sure you guys know,

it's completely free.

There are no fees that M1 Finance is charging you

for the retirement account, there's no commissions.

They are making some money on the backend

through a couple of different methods,

through directing order flow, for example,

or they have a M1 Plus checking and debit card

that has an annual fee, and they also make money

from margin interest.

Just a couple of examples there.

So, they are making money, they're just not doing it

in the traditional way of charging fees

and commissions to customers.

And then, another great benefit you have here

with M1 Finance is they have something

called M1 Rollover Concierge.

So, if you want roll over an old 401(k)

from a previous employer or a retirement account

from somewhere else, they'll actually help you

with this entire process.

So, you can actually work with someone one-on-one

and they will help you with rolling over an old 401(k)

or a past retirement account, where you may not know

what the money is doing there

and you just wanna have it all in one place.

So, as far as funding your Roth IRA

or retirement account with M1 Finance,

you can either direct new funds to it

or you can rollover a 401(k)

or other type of retirement account.

And then, one other question

I get from people frequently is,

what happens if M1 Finance disappears or something?

Well, most likely, in that case, what would happen is,

M1 Finance was acquired by a larger brokerage

and then your assets would just become a part of that.

For example, I used to invest with Scottrade,

and then Scottrade was acquired by TD Ameritrade

and I just became a TD Ameritrade customer.

So, in most cases what would happen is,

your investments would just be transferred

to this new brokerage and you would just get a new log in,

or if the brokerage somehow went under,

you are covered by something called SIPC insurance.

So, you are covered in the event

that a brokerage goes insolvent,

up to a certain dollar amount,

and it's a very high dollar amount

that most people are not exceeding.

But in most cases, what's gonna happen is,

a small brokerage like M1 Finance could get acquired

by a larger one and then your investments

would just transfer over to them,

and you would simply go through their portal

to access your investments.

But anyways, guys, that's gonna wrap up this video.

Those are some of the basics

of the Roth IRA offered by M1 Finance.

Like I said, if you guys do want to open up an account

or check out that free 30-minute training,

all of that is linked up in the description below.

But thanks so much for watching this video,

I hope you enjoy it, and I will see you in the next one.

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