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Bottom line: Betterment IRA and Ellevest IRA both offer multiple IRAs, but Betterment is best for those in search of strategies like tax-loss harvesting. Ellevest, however, best suits women who want to build wealth while taking advantage of career coach and financial planner access.
Betterment vs. Ellevest IRAs: The biggest differences
Betterment and Ellevest are two popular robo-advisors that let you automate investment accounts. These two platforms typically best suit those who want to build wealth without actively buying and selling stocks or other assets.
And if you’d like to have your IRAs professionally managed, both offer three types of such accounts: traditional IRAs, Roth IRAs, and SEP IRAs. But the associated fees and resources vary for each platform.
Betterment is likely the best option for investors who prioritize tax-reduction strategies and goal-based planning and can survive with or without complimentary one-on-one human advisor guidance. While it offers human advisor access as part of its premium plan, you’ll have to pay for access if you’re enrolled in the digital plan.
Ellevest, on the other hand, is a better choice for those who want access to career coaching and financial planner guidance. Though the platform focuses specifically on female investors and closing the gender gap, it also welcomes all clients.
Betterment
Ellevest
IRA types
Traditional IRAs, Roth IRAs, rollover IRAs, and SEP IRAs
IRA types
Traditional IRAs, Roth IRAs, and SEP IRAs
Investment choices
ETFs
Investment choices
ETFs
Account perks
Tax-loss harvesting, goal-based investing, automatic portfolio rebalancing, socially responsible investing, dividend reinvestment, and charitable giving
Account perks
Portfolio rebalancing, multi-goal investing, dividend reinvesting, career coaching, financial planner access, dividend reinvesting, and educational workshops
Human advisors available?
Yes — Premium investing gives you unlimited calls and emails with Betterment’s certified financial planners (CFPs); you can also purchase an advice package for $299-$399 if you can’t meet the premium plan’s $100,000 minimum
Human advisors available?
Yes — one-on-one sessions and workshops with Ellevest’s career coaches and financial planners
Better Business Bureau rating
Better Business Bureau rating
IRA eligibility requirements
Betterment and Ellevest both offer the same types of automated IRAs, but the two mainly differ when it comes to fees and resources. But before you get started, it’s important to note the rules of each account:
Traditional IRA: Those who are at least 18 years of age with taxable income can set up a traditional IRA. With traditional IRAs, you can contribute up to $6,000 per year (or $7,000 if you’re over the age of 50) in pre-tax dollars. You won’t have to pay taxes until you make withdrawals at age 591/2 .Roth IRA: As with traditional IRAs, you’ll need to be at least 18 years of age with taxable income to set up one of these accounts. However, unlike traditional IRAs, you can only make contributions if you meet the income thresholds set by the IRS. Single filers can only contribute the full $6,000 or $7,000 for the 2021 tax year if their modified adjusted gross income (MAGI) is less than $125,000 (the limit for married couples is $198,000).SEP IRAs: Both Betterment and Ellevest also allow for automated SEP IRAs. Self-employed individuals and small business owners can set up these accounts, and they allow for contributions of up to $58,000 in 2021.
Are Betterment’s IRAs right for you?
Pros
No minimums for those enrolled in the digital plan; tax-loss harvesting Traditional, Roth, and SEP IRAs supportedRoth conversions availableThe premium plan includes CFP access, but you can also purchase an advice package if you can’t meet the premium plan’s $100,000 minimum
Cons
No automated SIMPLE IRAsNeither investing plan includes human advisor guidance
Betterment IRA automated IRA offerings apply to both its Digital and Premium investing plans. And though you won’t need a minimum to get started, you’ll either pay a 0.25% or 0.40% annual fee, depending on the plan you choose.
Its three available accounts — traditional IRA, Roth IRA, and SEP IRA — are all supported by an additional option: Roth conversion. With the conversion option, you can easily move funds from one type of IRA to another within the robo-advisor’s web platform or mobile app.
As with its regular investment accounts, Betterment IRA also applies tax-loss harvesting to make sure you get the most out of your retirement investments. Plus, the investment app lets you set your retirement goals (e.g., ideal retirement age and target retirement amount) and track your progress toward them.
You can set up the Betterment mobile app on iOS and Android devices.
Are Ellevest’s IRAs right for you?
Pros
Only $1 to get startedEllevest lets you automate traditional, Roth, or SEP IRAsYou can rollover existing funds from a 401(k) or 403(b)Though you can only automate IRAs with the Plus and Executive plans, both plans give you access to career coaches and financial planners, educational resources, and banking perks
Cons
No tax-loss harvestingYou can’t set up an IRA if you’re enrolled in the Essential plan
Ellevest IRA offers IRAs for its Plus and Executive membership levels. In other words, you won’t be able to open an automated IRA if you’re enrolled in its Essential plan. However, if you don’t mind paying $5 or $9 per month, you’ll have the choice of opening a traditional or Roth IRA, and small businesses and self-employed individuals will have the option to automate an SEP IRA.
Like Betterment, Ellevest helps you map out how much you need to save by the time you retire. It also lets you roll over existing funds from 401(k)s or 403(b)s. And unlike Betterment, you can take advantage of complimentary career coaching and financial planning sessions despite which plan you’re enrolled in.
However, while Ellevest IRA accepts clients of all demographics, its services are specifically geared toward women. In fact, the company says its retirement strategies consider various aspects of women’s lives, such as pay gaps, longer lifespans, and career breaks.
Ellevest is available for both iOS and Android devices.