Hey guys it's Andy from Magooinvesting. Today I'm going to be talking about Acorns Later.
Acorns Later is a function on the Acorns app that I've talked about the basic app probably
5 or 6 times already on this channel. It's something that I've used the entire time since
I've started investing. And I think it's a great option for people that are just starting
to learn about the stock market and where to put their money safely. And this Acorns
Later feature came out in the past 6 months I believe and it is a retirement function.
When you first think about it, it seems decent. It costs 2 dollars per month which is not
a lot more than, only a dollar more than Acorns Core account is. It's pretty cheap. I think
that a lot of people look at that and go "I know I need to start investing for retirement.
Maybe this is a good option". Once I looked at the benefits and cons of Acorns later,
the more I think you should stay away from it. This video, I'm going to give 2 big reasons
why I think that you should NOT be using Acorns Later for your retirement investing. The biggest
reason why I think you should not be using Acorns Later is that if you're using an app
for your investments, you probably aren't ready for retirement investing at this point.
The reason I say that is all of the money that I have sitting in my Acorns core account
and my Robinhood account are probably going to be used in the next 10 years on something
else. This will probably going to big lifetime decisions like furthering my education, buying
a house, buying a car, or maybe changing locations. This money is going to be sitting there until
I need it and it's making me money in the process. If you have these big life purchases
coming up and you're saving for retirement, you won't have access for that. It's going
to be putting yourself in a further hole for making these big decisions in life. Having
my money sitting in acorns core accounts right now, I'm able to take that out by just paying
my normal tax bracket. So there's no penalties, but if you have your money sitting in the
retirement account and you move it from a retirement account to a non-retirement account,
you have to pay a 10% fee in addition to the normal tax bracket that you're already paying.
If you think you're going to be taking your money out before you retire or the 59 and
a half where you're allowed to take it out without penalty, I highly recommend that you
keep your money in a normal investment portfolio and not sitting in the umbrella of a retirement
account. Retirement accounts are great that you can put your money in a Roth IRA which
means that when you take it out when you're allowed to at 59 and a half, you won't have
to pay any taxes on the profits. There's a bunch of different options you can do for
retirement and I'll be talking about that in further videos. Acorns Later does have
the ability for you to do a normal IRA, a Roth IRA which is what I would recommend,
and some other options if you're self employed. The second reason why I would think you shouldn't
be using Acorns Later is the main benefit for why I think you should be using the core
account. And it's the idea that it is very simple, it's on an app, you don't have to
think about it very much. When you're doing that for retirement it's not a great idea.
Putting just a couple thousand dollars in, learning about the stock market, it's a totally
fine place to put your money. But, if you're going to be keeping your money in there for
almost 35 years, that's a really long time. When you only have 5 portfolios you can pick
from, you're most likely not going to be doing as well as you could. If you're going to be
putting your money into retirement, I'd highly recommend that you go talk to someone that's
a professional. That is a licensed financial adviser because they do this for a living
and they're not just an app that only has 5 different portfolios that you can pick from.
As long as you find someone that has your best interests at heart, they know what they're
doing and I'd much rather pay them a commission than only paying 2 dollars a month for a robotic
portfolio manager. And finally I'll talk about if you have your sitting in Acorns Later right
now, I wouldn't panic and take your money out right away. You do have the ability to
roll it over into another retirement account for no penalty. But I would recommend going
to talk to a financial adviser first before just moving your money out. If you're going
to just take it out be it's not a great idea, just let it sit in there. It's not a huge
deal, oh you should do this right away. I would highly recommend talking to someone
that knows what they are doing and does it for a living and let them advise you on what
to do. Thanks for watching guys. Hopefully you learned something from this. The Acorns
Later seems like a great idea on the surface, but the more I looked into it, the more I
think that you should avoid it and go and talk to an actual financial adviser. Retirement
is a big thing in life and I would hate for someone to screw it up or not make as much
money as they possibly could have just because they went for the easier approach by using
acorns later instead of talking to a professional and paying them a commission. If you liked
the video, or if you learned something, I'd really appreciate if you hit the like and
subscribe button. It would help my channel out a lot. And thanks for watching, I'll see
you guys in the next video!