Finance experts almost universally agree: at a minimum, contribute enough to your 401(k) to get the full company match — if one’s available.
Why leave free money on the table, right?
What’s more, employer matching programs have been shown to encourage higher savings. Studies have found that even small increases in the match rate lead to greater employee participation rates in retirement savings.
But what if a similar incentive existed for individual retirement accounts (IRAs) — accounts traditionally lacking employer contributions? That’s exactly what’s happening today.
In 2015, Fidelity Investments launched a unique program that paid up to 10% in matching IRA contributions. This wasn’t the first time a broker offered an IRA promotion, but it was a creative twist on an incentive to save in IRAs. The program was short-lived, however, and Fidelity officially shuttered it a few years later.
Fast forward to today, and the IRA match is making an impressive comeback. Tech-driven brokers are showing reignited interest in reviving the concept, with fintech disruptors such as Robinhood, SoFi, Acorns and Webull using IRA matches to attract new users and assets.
But is this a game-changer for long-term retirement savings or just, once again, a clever promotional tool to accelerate customer growth? Does it matter one way or another if you’re an investor just looking to boost your retirement savings?
Let’s take a look at this evolving trend.
The revival of the IRA match
Robinhood’s Retirement unit has seen explosive growth since launching in 2022. It reported a 600% year-over-year (YoY) increase in assets under custody (AUC) to $13.1 billion in Q4 2024, which is seven times higher than in Q4 2022. The initiative has clearly struck a chord with investors. At the time of its launch, Robinhood marketed it as “the first and only IRA to offer a 1% match for every eligible dollar contributed.”
Since then, Robinhood’s IRA match program has evolved, and it’s no longer the only player in the game. Today, Robinhood Retirement offers up to 3% in matching contributions. IRA transfers and old 401(k) rollovers also receive a boost, further solidifying its appeal to retirement savers.
Robinhood’s successful 2022 debut of its match program marked a significant shift in the brokerage industry, prompting several competitors to reevaluate their offerings. SoFi responded by offering its own IRA match program in late 2023, quickly followed by Acorns’ IRA match feature in mid-2024. Other brokers, including Firstrade and Webull, have since joined the trend, offering their versions of IRA match incentives. Although Webull ended its limited-time IRA match offer in 2024, it’s gearing up the incentive’s relaunch as a feature of its upcoming Premium membership.
IRA matches seem to be shifting from an experimental perk to a growing industry trend. However, their long-term sustainability remains an open question. We haven’t seen any big, traditional brokers step back into the space yet.
Incentive chasing or long-term investing?
Robinhood’s the only broker of the bunch with public data on the metrics of its IRA program, so we’ll focus our attention here.
Robinhood’s 600% YoY growth in IRA AUC suggests that its matching program is attracting significant investor interest — but does this mean customers are sticking around for the long haul, or are they just here for the free money?
The data gives a mixed picture.
On one hand, Robinhood has a 95% customer retention rate, steady net deposit growth and an increasing number of Gold subscribers, Robinhood’s paid membership. These are all signs that users are engaging with the platform beyond just grabbing the match. Plus, there’s a five-year holding requirement on matched funds, which makes it harder for users to just cash out and run. Other brokers like SoFi, Acorns and Firstrade also have holding requirements between two and five years.
Further, Robinhood has paid out more than $240 million on IRA transfer matches since Q4 2023, compared to $80 million on IRA deposits. This statistic might also suggest that people are moving existing retirement funds into Robinhood for long-term management, not just chasing a short-term incentive with small contributions.
Of course, there’s still a chance that some investors are jumping in for the match and then bailing. Robinhood’s $125 outgoing account transfer fee might slow that down a bit, but whether this trend translates into long-term retirement savings growth depends on key factors like recurring contributions and account longevity — metrics Robinhood hasn’t yet shared.
What should investors do?
Should you open a new IRA with a match-offering broker or roll over an old 401(k) to take advantage of these incentives?
Probably not just for the match. Since most of these programs come with a multi-year tie-up period, you’ll want to make sure you actually like the broker you’re choosing — otherwise, you might end up stuck with a platform that doesn’t fully meet your needs.
An IRA match is a nice perk that seems to benefit both brokers and customers, but it shouldn’t be the main reason you pick a broker. Consider it alongside things like investment options, fees, customer service and overall usability. If a platform checks all your boxes and offers a match? Great. But don’t let a short-term incentive lock you into something that doesn’t work for you long-term.
If it does work for you long-term, even better.
