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Employment looks much different today than at the end of the 20th century. While the majority of Americans still hold traditional employment that consists of a 9-5 salaried or hourly job with benefits, the gig economy and self-employment are growing.
The rise of the internet has allowed gig jobs and freelancing to flourish. When millions of Americans lost their jobs during COVID-19, the gig economy became a viable option to bring in income. The emergence of companies like Uber, DoorDash, and InstaCart has added another dimension to the workforce. Social media and freelance platforms like Upwork have also allowed individuals to make an income outside of the traditional workforce.
According to the Pew Research Center, 16% of Americans have earned money through an online gig platform. The US Bureau of Labor Statistics estimates that as of August 2022, there are over 9.6 million self-employed Americans.
Despite the benefits of self-employment like flexibility and entrepreneurial spirit, self-employment lacks a lot of the traditional benefits that come from being part of the traditional workforce. Retirement plans and healthcare programs are two major benefits that self-employed workers have to figure out for themselves without the help of a traditional employer.
Robinhood Is Introducing A 1% Match Retirement Plan With No Employer Needed
According to the Bureau of Labor Statistics, 72% of all workers with 81% of full-time and only 43% of part-time, have access to a retirement plan, but what happens to the nontraditional, self-employed workers that don’t have access to employer-sponsored plans?
Robinhood Financial LLC. is launching the only IRA, or individual retirement account, with a 1% match that requires no employer. Both traditional and Roth IRAs will be available. These retirement accounts are similar in nature but differ primarily in their treatment of contributions and withdrawals. TraditionalIRAs on eligible contributions have the potential to grow tax-deferred but are taxed at the time of withdrawal when conditions are met while Roth IRAs are funded with after-tax dollars, have the potential to grow tax-free, and are not taxed at the time of withdrawal when conditions are met. What works best for you depends on your unique financial circumstances and what your financial status and tax bracket will be in retirement.
With Robinhood, individuals no longer have to be tied to an employer to get a contribution match for a retirement fund. This means that Robinhood Retirement can be a great solution for most people–such as the emerging workforce, especially as younger generations embrace the gig economy and side hustles, but is also available to individuals in different age groups and professions, including those looking to capitalize on the tax benefits by investing in a retirement account.
- Robinhood will match 1% on every eligible dollar contributed up to the annual contribution limits. Limitations apply, see restrictions below.*
- Robinhood will provide a one-time custom recommended portfolio if you need help getting started, you can build your own, or do a bit of both.
- Custom portfolio recommendations include up to 10 ETFs based on a series of questions that analyze appetite for risk and desired age for retirement.
The platform will also offer the ability to trade certain options strategies for eligible users without commission or per-contract fees** in your IRA. Depending on the account type, any potential retirement earnings have tax-deferred or tax-free growth potential to help keep more of what members have.
The addition of Robinhood Retirement to the platform can be a valuable tool to help build toward retirement. Robinhood aims to empower investors everywhere, no matter their investment level, with retirement account offerings that help build toward a more solid financial future.
This post contains sponsored advertising content. This content is for informational purposes only, and is not intended to be investing advice.
*Contributions must come from an external account and must be held in the Robinhood IRA for at least five years to avoid the possibility of a withdrawal fee.
**Other fees may apply. View Robinhood Financial’s fee schedule at rbhnhd.co/fees.
Funds being contributed into or distributed from retirement accounts may entail tax consequences. Contributors are limited and withdrawals before age 59 ½ may be subject to a penalty tax.
Options trading entails significant risk and is not appropriate for all investors. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Customers should consider their investment objectives and risks carefully before investing in options. Supporting documentation for any claims, if applicable, will be furnished upon request.
All investments involve risk and loss of principal is possible. Robinhood Financial LLC (member SIPC), is a registered broker dealer.
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Image and article originally from www.benzinga.com. Read the original article here.