Acorns Later is an investment product for your retirement utilizing tax-advantaged accounts such as Individual Retirement Accounts (IRA)s integrated into your Acorns app experience.
For current Acorns users, Later is an additional feature that enables you to specifically save for your retirement. Acorns Later is part of the Personal tier at $3 per month that includes Invest and Spend.
For non-current users, it can be the tool to help you start saving into Traditional or Roth IRAs.
What are tax-advantaged accounts? Tax-advantaged accounts like IRAs are a type of retirement savings plan where you get tax benefits such as tax exemption or tax-deferral.
There are 3 types of retirement accounts offered:
- Traditional IRA – contributions with money you may be able to deduct on your tax return. Earnings can potentially grow tax-deferred until you withdraw them in retirement
- Roth IRA – contributions with money after taxes have been paid. Earnings grow tax-free.
- SEP IRA – a Simplified Employee Pension (SEP) plan provides business owners with a simplified method to contribute to their own retirement savings.
How does Acorns Later Work
With Acorns Later, you can add to your retirement savings one-time or through recurring contributions (that take place daily, weekly, and monthly). You’re still subjected to annual IRS limits. For 2020, the IRS contribution limit is $6,000 for most people ($7,000 if you are 50 or older).
Features & Benefits
- Get started with $5
- Selected portfolios and rebalancing – based on your age and the time until you reach “retirement age,” which is currently 59 ½ years old according to the IRS. Over time, the calculation changes, and your portfolio is automatically rebalanced.
- Rollovers – you can roll over your existing qualified plans into Acorns Later saving you on fees and management
What is Acorns?
Acorns is a financial services company offering a suite of products to help people invest their spare change or take small steps towards their financial goals. They revolutionized the investing industry with their Round-Up feature that merged convenience, automation, and robo-advisor models to help more people save and invest. You can learn more about Acorns here.
Other Acorns Products
All users start with an Invest account to access other products and services.
- Invest – micro-savings and investing (learn more)
- Spend – checking account with a debit card and no minimums (learn more)
- Later – tax-advantaged accounts for your retirement
- Early – accounts for your children (learn more)
Additional tools include Acorns Earn which helps you earn cash-back for using recommended services from partners or through the use of Acorns Spend debit card. And Acorns Grow offering users financial articles, interviews, and reviews.
- Personal: $3 per month. Adds on an individual retirement account and a checking account.
Acorns Later Review
Acorns Later is a legitimate product that aims to help you save for your retirement. It follows IRS rules for retirement account contribution limits and tax advantages. Whether you’re a current or new Acorns user, Later can be a product to help you finally save for retirement. Depending on your work situation and current retirement contributions, Acorns makes it simple to choose the right retirement account.
When you add the benefits of Invest and Spend, the $3 per month fee, maybe already be a good deal and an even better option once your investments grow.
Who is it best for?
Acorns Later is best for people who are currently using Acorns for their general investing and even more so for those using the Spend card. If you’re the type who is looking for simplicity and have benefited from Acorn Invest this can be beneficial.
For non-current Acorns users and people having a challenging time saving for retirement, Later may be what you need to get started investing for your retired future.
How to Start an Acorns Account
Time needed: 3 minutes.
Step-by-Step to opening an account with Acorns
- Getting started
Login to your existing account or click “Get Started” to open a new account.
- Enter email and password
For new accounts, submit your personal information, set up a PIN access code, and log into your new account. For existing users, login and click on Later to answer a few questions to get started.