On Tuesday Robinhood announced the introduction of its retirement plan. According to the plan, the company would be adding retirement accounts for their customers. The waitlist for the retirement plan was launched owing to the fall in retail trading activity.
Robinhood Markets Inc is an American company that provides a platform for commission-free investments and the trade of stocks. The company has a huge admirer base for its meme stock.
The launching of the new plan could be seen as an attempt to face the so-called gig economy sector. This comprises the ones who run their own business, who are in the corporate life of 9 to 5, and those who have other side hustles.
Vlad Tenev, the Chief Executive Officer (CEO), and the co-founder of Robinhood was available for an exchange with the media. He said that there happen to be a lot of people who do contractor jobs or who engage in multiple jobs, and many of such people do not have access to any traditional safety net pension plan or 401 (k) s with a match.
He continued that employer-sponsored 401 (k) s really happen to be a huge force behind getting people to save for retirement. Even though all people do not have the privilege that makes them eligible enough for such a plan.
This may be due to those people not having a full- time employment or due to their employer being much smaller or the employer does not offer a match. According to Tenev, they are building a retirement plan for including these unprivileged people.
This launch of the retirement plan is getting popular and is being referred to as Robinhood Retirement. This offering by them is supposed to match 1 % of whatever the customers contribute to their traditional Individual Retirement Accounts (IRA s) or Roth IRAs for every dollar that could be considered eligible.
The company is also proposing to offer crypto trading for the purpose of user brokerage accounts. Although it would permit ETFs and equities only for its retirement account.
The Robinhood announced the retirement plan at a period of them witnessing the continuous and notable downfall of the trading volumes. A group of investors had opened accounts with Robinhood to get in on the meme stock craze, the previous year.
It was not successful because of the decline that happened in the stock market. This was eased by the restrictions of the pandemic which made the inflation engulf the amount of disposable cash that people could afford to invest.
Robinhood is allowing retirement accounts for the first time. With the introduction of this, the company is attempting to regain its dominant growth from the daytime trading of the stock and from cryptocurrencies.
The retirement plans would include a variety of common Individual Retirement Accounts (IRA) as well as Roth IRA retirement accounts. Customers would have the option to choose either of the two or both of them. There would also be pension accounts.
After the valid funding of an IRA, the investor would have the freedom to choose stocks and ETFs ( Exchange Traded Funds ) based on their interest. The customer would also be able to make a selection of funds that do meet a certain risk and investment profile. Every customer would have a recommended list for making a selection.
Opening a Robinhood brokerage account is free of cost as they have a commission-free functioning. The company has exempted the fee-charging from multiple services. These services are opening an account, maintaining an account, and transferring funds to the already established account.
Nonetheless, the company is charged for their selling orders, by the Self-Regulatory Organizations (SRO s). The Financial Industry Regulatory Authority, commonly known as the FINRA, is such an organization. Reportedly just a nominal and small amount are charged as fees.
The operations taking place in Robinhood are transparent as each of the transactions is detailed in the datasheets of the Internal Revenue Service ( the IRS).