Rollover from Betterment to Wealthfront
At the end of 2015, my Roth IRA with Betterment had an account balance of $3,594. I decided to rollover my Roth IRA from Betterment into a Wealthfront Roth IRA after I discovered that Wealthfront would manage my entire balance for free. In other words, I wouldn’t have to pay a fee every month. You can also get your first $5,000 manged for free by signing up for a Wealthfront account through my personal invitation link.
I initiated the rollover of my Roth IRA from Betterment into Wealthfront on November 5, 2015.
Wealthfront didn’t receive my rollover check until December 29, 2015 and my funds were finally invested on January 6, 2016.
Off to a bad start with Wealthfront since it took over 2 months for the rollover to happen. I don’t think it typically takes this long for a rollover to happen. Regardless, my first impression of Wealthfront wasn’t a good one. That would soon change.
2 Years with a Wealthfront Roth IRA
But I stuck around, and I’m super glad I did, because over the next two years, I saw a 35.88% return on my investment.
Every month for two years $458 was transferred from my bank account to my Wealthfront account and automatically invested in my Roth IRA.
In case you are wondering where the $458 came from, the IRS allowed your total IRA contributions to be $5,550 per year at that time. So $458 each month for 12 months is approximately $5,500.
|Year||My Roth IRA Contribution|
Contributions to my Wealthfront Roth IRA totaled $14,586. As you can see below, my Roth IRA account balance is currently $17,823. This means that I have earned $3,237 in two years. That’s a 35.88% money-weighted return on my investment. Not bad!
My Wealthfront Roth IRA Breakdown
When opening a Wealthfront account, you are asked a series of questions in order to determine your risk tolerance on a scale from 1 to 10.
I have a risk tolerance of 9 which means I have a high tolerance for risk. Knowing this, Wealthfront invests more of my money in risky assets such as stocks and real estate as opposed to safer assets such as bonds and TIPS.
Stocks are considered more risky because their prices tend to fluctuate more than bonds. On the flip side, stocks have a higher return on your investment than bonds. In other words, investing in stocks will make you more money than bonds in the long run.
As you can see, the majority of my investments are in stocks whereas only about 10% is invested in bonds.
At the time of this writing, I’m seeing double digit gains in each asset class. I can’t complain about that.
How to Open a Wealthfront IRA
You can open your own Wealthfront Roth IRA and get your first $5,000 manged for free by signing up for a Wealthfront account through my personal invitation link below:
The best time to start saving for your future was yesterday. But the second best time to start saving is today. Open a Wealthfront Roth IRA account today, sit back, and watch your money grow.