The Bottom Line: Rocket Dollar account holders have the power to invest in any asset class allowed by the IRS. Put your frozen retirement investment dollars to work for you with self-directed retirement investing, in either a solo 401(k) or IRA.
Have you ever asked yourself: Why am I stuck with a stock-bond ratio in my individual retirement account (IRA) or 401(k)?
With so many different investment types available, stocks and bonds are a restrictive mix.
Maybe you are missing out on the real estate boom or you are certain Bitcoin will take off.
Whatever the case, wouldn’t it be great to put your retirement dollars towards better investments?
Good news! Enter the self-directed retirement investment account. Self-directed 401(k) and IRA investing have been around since the 1970s.
You may not know that some banks and financial companies offer these as alternative investments.
They allow the average investor much more control on the types of investments held in either an IRA or 401(k) – way beyond the standard stock-bond ratio.
Don’t worry, these are legal retirement investment accounts allowed by the IRS.
These investments allow you to invest your retirement dollars in a wealth of assets: everything from cryptocurrencies to timber deeds to options.
There are over 15 allowed investment types.
While certainly riskier, these alternative investments have the potential for gains beyond your current stock-bond mix.
Why might someone want to try self-directed retirement investing? You can check out this quick U.S. News & World Report guide, or glance below:
- You want better returns than your current portfolio offers
- You were burned in the 2008 financial crisis and want to diversify beyond a standard portfolio
- You have experience in a particular asset class – like cryptocurrencies – and want to leverage your retirement account
If DIY investing sounds like your thing, then you’ll want to read on as we look at the leader in self-directed retirement investing: Rocket Dollar.
Minimum Deposit: $0
Fees: $15/Month, Plus a One-time $360 Setup Fee
Promotion: No current promos
What is Rocket Dollar?
Rocket Dollar is an investment company that lets you self-manage your retirement investments. No more funds frozen into the traditional stock-bond asset allocations.
With Rocket Dollar, you are in control of your self-directed IRA or solo 401(k). Self-directed investments can hold alternative investments that are usually prohibited in traditional retirement investments.
With Rocket Dollar, you simply sign up, create a self-directed retirement account, and you can begin investing in over 15 different assets.
As the owner of the self-directed investment, you choose what is in your portfolio.
This can be great for those seeking exposure to specific asset types or anyone with deep knowledge in a particular asset class.
Rocket Dollar will even work with adding funds to your account, through direct deposit, rollover, or account transfer.
After your account is up and running, you can follow your portfolio’s progress on their investment tracking system.
This compliance audit requires the company to meet certain standards for protecting data security.
Austin-based Rocket Dollar was founded in 2018 by Henry Yoshida, a serial entrepreneur.
You may have heard of Yoshida from his past company, Honest Dollar, which was sold to Goldman Sachs in 2016.
The company was founded with the vision to let investors break out of the 60 percent stock and 40 percent bond “set it and forget it” allocation.
The fund received early backing from the successful Silicon Valley venture firm Village Global. Village Global is backed by some big names such as Facebook, Amazon, Microsoft, and LinkedIn.
Importantly, the company is still new and is very much a startup. In March of 2019, the company received an infusion of $3.4M worth of seed capital from 10 investors.
Nevertheless, Rocket Dollar has grown and boasts somewhere around $75M of assets in its accounts.
Rocket Dollar Features
Self-directed Retirement Investing.
Unlock and invest your retirement funds with self-directed IRAs and 401(k) plans.
Anything Investment Allowed.
Invest your retirement dollars in any investment vehicle allowed by the IRS.
No Account Minimums.
$0 minimum deposit means you can get started with as little as a buck.
Choose Core ($360 one-time +$15/month) or Gold ($600 one-time +$30/month) plans.
Three Account Types.
Create and invest with a traditional IRA, Roth IRA, or a solo 401(k).
Five IRA Types.
Choose from a traditional IRA, Roth IRA, inherited traditional IRA, inherited Roth IRA, or a SEP IRA
Variety of Investment Opportunities.
Direct your retirement funds to investments from precious metals to P2P lending, and everything in between.
Built-in Investment Tracker.
Keep an eye on your investments with the portfolio tracker.
No Extra Fees.
Whether you invest $1,000 or $100,000, you’ll be charged the same fees. No need to worry about pricing based on assets under management.
Premium Account Services.
A slew of services for investors who need extra support or who want to skip the lines.
Serious About Security.
Achieved SOC 2 Type 1 compliant, meaning they care about your data privacy.
How Does Rocket Dollar Work?
Rocket Dollar is a company that will help you create and manage self-directed retirement investment assets.
These include either an IRA or a 401(k). You get to manage the investments held in these tax-saving accounts.
Simply create an account, fund the account, and begin investing in everything from startups to real estate.
Rocket Dollar Products
Rocket Dollar offers two primary products, either an IRA or a solo 401(k). IRA, or a SEP IRA.
Self-directed Solo 401(k)
Also known as a “checkbook control” Solo 401(k), this plan allows investors to choose a variety of investment types beyond the usual stocks and bonds of standard 401(k) plans.
Like a standard 401(k), this plan allows investors to add pre-tax dollars into the fund. Taxes are paid when funds are withdrawn, usually after retirement.
The Solo 401(k) is not tied to an employer and therefore will not have any matching limits.
- Requirements: Self-employed with no full-time employees
- Contribution Limit: up to $56,000 ($62,000 if 50 or older) / $19,000 ($25,000 if 50 or older) is deferral of income, remaining comes from profit sharing
- Loan: up to 50% of the value of the plan (maximum of $50,000) can be a loan to yourself
Rocket Dollar offers five different types of IRAs: traditional IRA, Roth IRA, inherited traditional IRA, or the inherited Roth IRA.
Self-directed individual retirement accounts, known as IRAs, are another way to save for retirement. All you need is US taxable income or an old retirement account to get started.
While the contribution is lower than the 401(k), the IRAs are not associated with employment.
You can also take out money from the account any time, so you don’t have to wait for retirement if something comes up.
- Requirements: younger than 70 and ½ years old with earned income
- Contribution Limit: up to $6,000 ($7,000 if 50 or older)
Rocket Dollar Investment Types
The advantage of a self-directed retirement account is that you can invest in a wide range of investments.
See below for the list of assets you can put your hard-earned retirement dollars into.
Importantly, there are some investment assets prohibited by the IRS. These include:
Rocket Dollar Service Tiers & Fees
Before we get into the two service tiers that Rocket Dollar offers, a note about the fees. You may encounter the following fees:
- Bank fees
- Investment fees
- Transfer or rollover fees
Rocket Dollar offers two separate service tiers for their retirement investment products: Core and Gold.
Pros & Cons
Rocket Dollar account holders have the power to invest in any asset class allowed by the IRS. Put your frozen retirement investment dollars to work for you with self-directed retirement investing, in either a solo 401(k) or IRA.
How to Get Started with Rocket Dollar
For most people, creating a Rocket Dollar retirement investment account won’t take more than 10 or 15 minutes.
Let’s walk through the steps needed to launch your self-directed retirement investment journey.
Rocket Dollar will ask you for some important background information and financial details.
For those interested in a self-directed 401(k), you’ll need to provide details of your business (remember: no employees!)
Rocket Dollar wants to know what retirement accounts you already have.
You’ll provide this information, along with some other details, in this step.
The most important part of investing with Rocket Dollar is selecting the right plan.
You’ll first want to decide whether or not a 401(k) or IRA is right for you.
If you choose an IRA, you’ll have five different options to choose from depending on your goals.
Once you’ve done the research and made your choice, you’ll have the chance to confirm which plan you want.
Congratulations! After you’ve selected your plan Rocket Dollar will create the plan for you.
You’ll then be able to fund the plan.
You can then begin investing with your plan through the Rocket Dollar online dashboard.
Should You Invest with Rocket Dollar?
Rocket Dollar is a recent entrant into the self-directed retirement investing space.
Don’t let this fool you.
The company has expanded rapidly, drawing in investment dollars and startup capital. They are serious about their mission that retirement is changing, and that investors want access to smarter and better ways to invest.
If you are looking to take hold of your retirement investing, then Rocket Dollar may be the right company for you.
A word of caution though: self-directed retirement investing is a complex and evolving form of alternate investing that comes with its own risks.
Make sure you understand the ins and outs before jumping in.
Overall, Rocket Dollar provides an important service.
Consumers want more choices when it comes to retirement investing, and the company has streamlined much of what it takes to get your own self-directed 401(k) or IRA.
Beyond that, they’ve made a commitment to security with the SOC2 Type 1 certification. The digital age is here, and data security is an extremely important component of life online – especially when it comes to your retirement.
Rocket Dollar is one of a new breed of digital companies dedicated to self-directed investing.