Planning for the long-term isn’t a strong suit of many Americans… just ask today’s retirees. As many as 40% of Baby Boomers lack meaningful retirement savings — and about a third of them will have to rely on Social Security alone in their golden years.
That’s why traditional wisdom favors starting your retirement savings early — but most Americans didn’t get the memo. In 2020, just 56% of Gen Xers had a retirement account like a 401(K) or an IRA, and less than half of Millennials had one, according to Census.gov.

It’s not getting any easier to save, either. Research from MBO Partners estimates that 45% of the workforce, or 72.1 million Americans, are now independent workers — a trend that accelerated during the pandemic and left many workers without popular workplace retirement plans like a 401(K), 403(b), or Thrift Savings Plan.

That means that today’s future retirees will need to make the most of their individual retirement account (IRA) options — and two fintech companies are offering savers a way to get the match their employer (or lack thereof) doesn’t offer.

Robinhood Rolls Out IRA Match; Benefits for Gold Members

Last year, Robinhood (HOOD) rolled out its Retirement accounts, allowing users to open an IRA or Roth IRA on the broker's platform for the first time. 

Part of the investment? The free money. Robinhood Retirement comes with an enticing offer to draw long-term savers: IRA Match, which promises to match 1% of contributions made to a user’s chosen qualified retirement account. 

In 2022, that means that maxing your IRA or Roth could help you earn an extra $65 — or more, if you pay for its $5/mo subscription, Robinhood Gold, which started offering an upsized 3% IRA Match in August 2023. 

The bigger Gold match offers the broker’s most ardent users a way to get the broker’s $5/month subscription essentially for free — with an extra $195 on the table for Gold customers who max a retirement account at the broker, or $135 after accounting for the monthly fee. 

And as retirement contribution limits rise in 2024, so too will the possible earnings for Robinhood users. A 1% match could be worth up to $70 for the most dedicated savers, while the 3% Gold Match would be worth $210 (or $150 after including the cost of Gold.)

The world’s first-ever match on IRAs has since expanded to cover rollovers, meaning dormant 401(K)s and IRAs can move to the neo-broker — which allows users to make recurring orders from as little as $1 each day. 

But its success has laid the foundation for competitors, too…

SoFi Follows in Robinhood’s Footsteps With 1% Match

Even before Robinhood launched its own Retirement product, SoFi (SOFI) offered customers a unique proposition of its own — cash in exchange for scheduling recurring deposits of at least $50 into a SoFi Invest account. 

That means that SoFi Plus users — those who make a direct deposit of at least $1,000 per month to their account — could make $1.00 per a $50 deposit, up to three times a week. The deposits could be invested into stocks or bond ETFs, or withdrawn. And over a year, a user could accumulate up to $156 in SoFi Points per year.

However, on the heels of Robinhood’s new retirement rollout, SoFi added its own IRA Match. Which, if executed correctly, would allow users to get the 1% Match on retirement contributions, plus the $1 per recurring deposit offer.

Barring changes to the program, the new IRA Match and existing recurring deposit offer could be paired together in 2024 — offering SoFi Plus users something like a 3% match without the subscription or fees that Robinhood has.

Fintech Eyes Wealth Management Ambitions

It’s no secret that fintech platforms have been struggling to convert and retain clients — but after opening a million retirement accounts and receiving over a billion dollars in deposits since launch, Robinhood is teasing a different vision of wealth management and advisory.

Instead of charging big management fees, Robinhood and its competition are doing the opposite: they’re paying customers to save. In the future, the company has teased converting the retirement-conscious into customers of their new advisory business, which promises a lower-cost and higher-yield experience for retail investors.
But most importantly, Robinhood’s match builds loyalty — and puts restrictions on savers. Keeping the company’s IRA Match requires keeping your money in their accounts for at least five years, and Gold users will need to be subscribed for longer than a month to keep their upsized match.

Ultimately, the concept of an IRA Match is still very much in its infancy. It might be a while before it disrupts the vast wealth management business — and there’s always the possibility that it might not catch on beyond money-conscious users of its brokerage.

But one thing is for sure: Robinhood and SoFi are invested in disrupting legacy competitors with a surprisingly simple idea — if you pay them, they will come.