M1 Finance is an investment platform for DIY investors who desire more control and expert guidance. With M1, you can open Individual Retirement Accounts (IRA) such as Traditional, Roth, and SEP IRAs as part of your investment strategy.
What are M1 Finance IRAs?
M1 Finance offers Roth IRAs, Traditional IRAs, and SEP IRAs for your retirement planning. You can open retirement accounts through the same M1 Finance investing platform with no management fees.
Similar to M1 Invest, you get access to Pies with no minimum balance, no management fees, and zero trading commissions. Pies allow you to visually create a custom portfolio containing low-cost exchange-traded funds (ETFs), individual stocks, and fractional shares. You can also use copy the expert Pies.
With M1 Finance online brokerage, you manage your tax-advantaged investments like you would with general investing in your taxable account. These are self-directed accounts with no financial advisor.
Why contribute to an IRA?
IRAs are retirement savings plans that have tax advantages. The types of accounts available are pre-tax (traditional), after-tax (Roth), and self-employed (SEP) IRAs.
Depending on your employment and income, you can open a Traditional IRA, Roth IRA, or SEP IRA. If you have an existing 401(k)s or IRAs from another brokerage, you can rollover the accounts into M1 Finance. Consider the following:
- Benefit from tax breaks. Depending on the IRA, you can save taxes now with a deduction or save later with a tax-free withdrawal.
- Grow your investment account with income from interest, dividends, and capital gains.
- Greater flexibility. M1 Finance retirement allows you to pick from a wider range of investment options like socially responsible investing. In contrast to most employer-sponsored retirement plans with limited investment choices.
How do IRAs work at M1 Finance?
If you’re an existing M1 Finance user, you can easily open an IRA to plan for retirement. All new users must open an M1 Finance brokerage account first and then apply for an IRA. Learn more about the M1 general investing app.
M1 Finance IRAs are governed by the same IRS regulations. Contribution limits and annual deadlines must be followed to avoid tax liability.
M1 supports annual contributions, roll-over and direct roll-over of contributions, and transfers between trustees. Before making a contribution, you must open an IRA account.
Why Setup an M1 Finance IRA?
With IRAs, you can choose from individual securities, such as mutual funds, individual stocks, bonds, exchange-traded funds (ETFs), certificates of deposit (CDs), and options.
Currently, M1 Finance IRA and Roth IRA only support shares of stocks and ETFs. Trades through M1 IRA accounts use the same trading windows as its self-directed version.
Features & Benefits
M1 Finance IRA and Roth IRA take full advantage of the same robust features found in the traditional brokerage account. Read the M1 Finance review for more details.
- Zero-commission: zero commissions and no trading fees for stocks and ETFs traded in your account.
- Minimum investment: $0 with the ability to set up an automatic deposit.
- Customization: choose the stocks, ETFs, and fractional shares to create your custom pie or start with one of the 80+ expert portfolios.
- Automation: automate your deposits and investments.
- Rebalancing: you can actively rebalance your portfolio to remain within your asset allocation target. And with Dynamic Rebalancing, every new cash in your portfolio is balanced into underweight assets.
With M1, you can have a general investing account, trust accounts, and custodial accounts along with retirement accounts.
- Transfer an IRA: transfer your existing brokerage account within minutes.
- Roll Over a 401(k): submit a request to roll over your employer-sponsored plan.
M1 Finance Client Success team is available during the trading windows of the U.S. stock market, which is usually Monday-Friday. You can contact support via chat, email, and phone.
- Trading Fees: $0
- Minimum Deposit: $0
M1 charges a $100 IRA closing fee and a $100 IRA transfer fee.
Additionally, with all IRA accounts, withdrawing the amount before retirement age can result in taxes, early withdrawal fees, and penalties assessed by the IRS.
Who is it best for?
M1 Finance IRAs are best for self-directed investors or passive investors who want to automate retirement contributions.
M1 Finance IRA Review
An M1 Finance IRA is a good option for your investment goals in your retirement plan. The app is rated 4.6 out of 5 stars by users in the App Store.
With M1 Finance IRAs, you can create a diversified portfolio of stocks and ETFs similar to the general investing account. Whether you choose to create your own custom Pie or copy of the expert Pies, the investing process is simple. You can make your initial investments into your retirement portfolio within minutes.
If you need more assistance or investment advice, you won’t have access to human advisors, but the Robo-advisor-like pie investing feature may fit your current needs.
Please consider the following when investing using IRAs. You do have more control in achieving financial goals, but it does come with assessing your own risk tolerances. The benefit of a self-directed retirement plan can lead to higher returns and less fees compared to managed retirement plans.
However, if you’re risk-averse, you may want to use automated investing through Robo-advisors instead.
How to Start an M1 Finance IRA
The time needed: 3 minutes.
Step-by-step to open an M1 Finance account
- Getting started
Log in to your account or click on the link.
- Apply for an IRA account
Choose the type of IRA you’d like to open. Sign the terms and conditions.
- Submit your application
It may take up to 2 business days to approve your IRA application.