Rocket Dollar is a unique investment platform that allows users to self-manage their retirement accounts. In this Rocket Dollar Review, we will see if setting up an account is even worth it.
Self-managed retirement accounts are more flexible than accounts with large banks, so they’re becoming prevalent among more advanced investors.
However, is Rocket Dollar a worthwhile option for the average trader? Our Rock Dollar review will pick this platform apart so you can decide if it’s a good option.
Rocket Dollar Review: Overview
Henry Yoshida, Thomas Young, and Rick Dude founded Rocket Dollar in 2018. The founders believed that investors should have more control over their investment options.
According to its website, Rocket Dollar wants to “make it safe, simple, and fast for people to take control of their retirement savings.”
Rocket Dollar is geared towards experienced investors who want to take a more active role in their retirement investments.
Users have complete control over their accounts and what’s in them. It’s significantly less restrictive than typical retirement savings apps, many of which only offer a handful of cookie-cutter portfolio options.
Rocket Dollar offers two types of accounts. Both have subscription fees, but we’ll dive into that later.
Rocket Dollar’s higher-tier plan also includes cash management options, like debit cards and check writing. Top-tier account holders also qualify for priority support and assistance with tax filing.
What is Rocket Dollar?
If you are investing, odds are you are putting funds into stocks and bonds. However, there are many other ways to put your money to work.
Unfortunately, traditional IRA and 401(k) accounts are pretty limited, and most only allow investments in stocks, bonds, and mutual funds.
These accounts don’t usually cover alternative investments like real estate and private equity. As a result, investors have to give up some tax advantages to invest in non-traditional assets.
That’s where Rocket Dollar comes into the picture. Rocket Dollar is designed for traders who want more control over their tax-advantaged retirement investments.
Users manage their own IRAs or 401(k)’s, so they have a lot more flexibility with their retirement investments. Self-managed retirement accounts can also be used to purchase alternative investments, like private equity, real estate, and more.
Is Rocket Dollar Legit?
Rocket Dollar stepped onto the IRA scene back in 2018 and has been making waves ever since. The company does not hold any of your funds, although the banks it partners with do. Furthermore, Rocket Dollar is a SOC-2 certified company and continues to update its systems with the best practices.
They do take a somewhat hands-off approach to your retirement account, leaving you responsible for investments and decisions. They do protect your money with a guarantee that you’ll always be able to transfer your money to another source, even if Rocket Dollar goes belly up.
The Rocket Dollar Guide to Self-Directed Retirement Plans Free eBook Review
Rocket Dollar makes available a free eBook for investors to unlock simply by providing a name and an email address. The eBook was written by two of Rocket Dollar’s founders and provides valuable information about IRAs
Within its pages, you’ll be able to discover what exactly a self-directed retirement account is and the benefits of having one. It explains crucial information about tax benefits and even goes into detail about the rules the IRS places on these accounts so you know what you can do and what you can’t.
Rocket Dollar Review: What Does Rocket Dollar Include?
Rocket Dollar offers several different ways to invest, and adds tons of flexibility to where your investments can go.
- Self-Directed IRA
- Solo 401(k)
- Checkbook Control of Investments
- Asset Classes
- Knowledge Base
Rocket Dollar Review: Self-Directed IRA
It goes without saying that the Self-directed IRA is the standout feature of Rocket Dollar.
An alternative to a traditional IRA through an employer, Rocket Dollar allows you to invest your money into a self-directed IRA that puts all the options in your hands. With 100% control over your Rocket Dollar portfolio, you can invest in whichever assets you prefer.
The beautiful thing about Rocket Dollar’s self-directed IRAs is that there’s no minimum investment amount and no requirement on the rate of investment. These IRAs, like all others, are required to follow IRS guidelines on the total amount that can be invested per year.
With all of these plans, there are no auto-investing options. You will have to manage your portfolio personally.
Rocket Dollar’s traditional IRA allows you to invest your money tax-deferred, just like any other. It stands out by allowing you to invest in one or many different types of assets that you – and only you – control. These funds can be deducted from taxes as well.
You are limited to contributions of $6,000 per year, or $7,000 if you’ve reached 50 years of age.
A Roth IRA is similar to a traditional IRA, except your money comes in pre-taxed. Once it’s time to take the money out of your account, you’ll be able to do so tax-free.
The Roth IRA still gives you the flexibility to invest in whichever assets you want, with the same limitations on how much you can contribute each year.
SEP (simplified employee pension) IRAs are set up for individuals with small businesses.
Employers are allowed to contribute up to 25% (with a maximum of $57,000) of an employee’s income, as desired. Employees must meet specific criteria to qualify for a SEP IRA.
Rocket Dollar Review: Solo 401(k)
It may come as no surprise that a Solo 401(k) plan is set up for a single individual. It’s designed specifically for self-employed workers who have no employees and offers the same benefits as a traditional 401(k).
What makes this plan really stand out is that owners of this Solo 401(k) can contribute as both an employer and an employee. As an employer, you can contribute up to 25% of your total compensation. As an employee, you’re allowed to contribute up to $57,000 yearly.
To sweeten the pot further, you’ll also get all the tax benefits that come with such a plan.
Rocket Dollar Review: Checkbook Control of Investments
Rocket Dollar offers its users “checkbook control.” This gives account holders complete control over their investments.
When you set up your retirement account, you’re required to open up an LLC bank account for an IRA or a trust bank account for a solo 401(k).
Using these accounts, you can buy assets with a debit card or check, just like with regular bank accounts. However, you don’t technically own these funds. Rocket Dollar maintains legal ownership to prevent you from violating IRS regulations regarding the separation of investment and personal-use funds.
This distinction allows Rocket Dollar users to make tax-advantaged investments in a variety of assets.
Generally, it takes tons of paperwork and other special accommodations to purchase alternative assets through a retirement account. Most 401(k) and IRA accounts don’t allow alternative asset investing because the legal process is so complicated.
However, Rocket Dollar’s approach makes it easy to expand your investing horizons while maintaining tax advantages.
Rocket Dollar Review: Asset Classes
Here is a quick rundown of the kinds of investment classes you can choose from with Rocket Dollar.
You can trade gold, silver, palladium, and platinum through Rocket Dollar’s partner, the US. Gold Bureau.
Typically, holding precious metals is cumbersome because of the difficulties associated with storage and security.
However, Rocket Dollar allows you to easily purchase and store physical metals at the Texas Bullion Depository.
Most institutions won’t allow retirement accounts to purchase cryptocurrencies, so it’s hard to make tax-advantaged crypto investments.
However, Rocket Dollar users can buy crypto through the platform’s self-managed offerings. There’s only one catch: you have to set up a crypto wallet to hold your digital investments.
Real estate is one of the best-returning assets from a historical perspective. However, you can’t buy a property through a retirement account that’s under your own name.
If you decide to purchase real estate for your IRA, it has to be for investment purposes.
IRS regulations also prohibit you from residing in the property or personally manage repairs. It sounds like it’s more trouble than it’s worth, but the potential tax benefits are astounding.
Thankfully, Rocket Dollar offers a variety of services to help you navigate these challenges, so investing in IRA real estate is easy.
Companies typically undergo their fastest growth phase before they go public. In the past, most retail investors couldn’t partake in these exclusive deals.
However, Rocket Dollar allows you to buy shares of private companies with your retirement accounts. You can also use your retirement funds to make venture capital investments and issue expansion loans.
You can also buy traditional IRA/401(k) investments like stocks, bonds, and mutual funds. However, Rocket Dollar is overkill if this is all you’re planning to do.
This is just a taste of the vast universe of investments you can make with your Rocket Dollar account.
You could even invest in cattle, racehorses, and livestock through the app. Money laundering regulations restrict investments in ATM-based businesses, but you can invest in practically anything other than that.
Rocket Dollar Review: Knowledge Base
Mixed into Rocket Dollar’s knowledge base are a series of articles pertaining to different topics on IRAs and investment assets. These are available to anyone who pays a visit to the website.
In addition, Rocket Dollar has the “Rocket Your Dollar” podcast with around 50 (and counting) episodes from the founders that cover similar topics.
Rocket Dollar Review: How Much Does Rocket Dollar Cost?
Rocket Dollar is a bit different than other investment tools because they do not charge assets under management fees. Instead, Rocket Dollar has a subscription-based pricing model. Users can choose between two different plans.
The Core Tier has all the fixings of a solid starter package to get your retirement account off the ground.
There’s no minimum opening deposit so that you can come in at any level. There’s no cost to transfer funds over from your current account, and you’ll have access to an investment dashboard to track investments.
Also included is the LLC to hold investments for IRAs, online storage for documents, and all the email support you need.
The Core Plan has a $360 one-time setup fee, paid at the time of registration. After that, no matter how much is in your account, you’ll pay a flat rate of $15 per month to keep it up and running.
In addition to everything the Core Tier has to offer, the Gold Plan gives you expedited service and transfers, and four free wire transfers per year.
You’ll also receive a physical debit card for your investment account, a custom named LLC for your IRA, and priority support should you have any issues.
Setting up a Gold Plan costs a one-time fee of $600. After that, users will pay $30 per month to keep the account active.
Rocket Dollar Review: Cancellation Policy
Rocket Dollar offers new users 30 days to feel out the plan. If you’re not satisfied during that time, the company will refund you 100% of the initial one-time fee.
Should you choose to cancel your account after the first 30 days, you’ll be able to use your account for the rest of the billing month, where it will no longer be available to you. Rocket Dollar will work with you to transfer your funds out of your account.
Rocket Dollar Review: Rocket Dollar Pros and Cons
Rocket Dollar offers a lot of flexibility for users, but there are a few things to watch out for. Let’s take a look at the pros and cons of this service.
Rocket Dollar Pros
- No minimum initial investment
- Several assets to choose from
- Multiple IRA options
- Flat monthly fee
- Easy setup
Rocket Dollar Cons
- Monthly fee is high for small accounts
- Some investment options are less liquid
- High setup costs
Rocket Dollar Review: Is Rocket Dollar Right for Me?
Rocket Dollar has a lot to offer, thanks to the flexibility of available asset options. Anyone who wants to step out of an employer-driven IRA and take control of their own retirement destiny will benefit from this service.
Some beginners to the world of IRAs may feel overwhelmed at first since Rocket Dollar doesn’t offer a whole lot in the way of instruction. Fortunately, it shouldn’t take long to find your groove.
More advanced investors will appreciate the chance to make tax-advantaged investments in a wide range of assets. However, you probably don’t need Rocket Dollar if you’re only interested in basic investing options.
Rocket Dollar is also an excellent fit for advanced investors interested in expanding their retirement portfolios beyond stocks and bonds.
Final Review: Is Rocket Dollar Worth It?
Rocket Dollar is a unique platform that offers users the opportunity to invest in a wide variety of assets under their retirement account.
Rocket Dollar’s unique ability to facilitate these transactions makes it a game-changer for these types of investors.
The tax advantages alone make this app a worthwhile investment. If you’re interested in buying alternative assets through your retirement account, you should definitely give Rocket Dollar a close look.
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