Do You Have an Old 401(k)? This Broker Offers a Huge Bonus for Rolling It Over

If you have an old 401(k) or other retirement account from a former employer, you have a few choices. Depending on your balance and plan rules, you might be able to simply leave it where it is. Or, if you have a retirement plan with your current employer, you may be able to roll it into your new employer's plan.

Alternatively, you can roll your old retirement account into an IRA. There are several advantages to doing so, including the ability to choose from a much wider range of investment options. You can also use IRA funds to help pay for college or fund a first-time home purchase, and this flexibility doesn't exist with 401(k)s.

Another reason to consider rolling your old 401(k) over is that many brokers offer a bonus for doing so. But Robinhood offers a unique bonus that can be especially lucrative for those with high-balance IRAs.

Robinhood's 1% match

Robinhood offers both traditional and Roth IRAs through its platform. Its 1% matching program gives IRA customers a 1% bonus on all money they put into an account -- and this includes any money transferred in, either from an IRA at another brokerage or from a 401(k) rollover.

So, if you have an old 401(k) from a prior employer with $10,000 in it, you can roll it into a Robinhood IRA and receive a $100 bonus.

This can be an especially lucrative welcome bonus if you have a large 401(k) to transfer. For example, a $100,000 401(k) would receive $1,000. A $500,000 account would get a $5,000 match.

In order to keep the entire 1% match, you'll need to leave the money in your Robinhood IRA for at least five years. If you start taking withdrawals before five years is up, it won't hurt you as long as you keep the IRA balance above the contribution amount the matching bonus was based on. Plus, the match is considered to be interest income in the eyes of the IRS, so receiving a match doesn't prevent you from contributing to an IRA up to the annual limit in addition to the bonus.

It's also worth noting that this is an ongoing match, meaning that it will apply to any new IRA contributions you make. In other words, if you contribute $5,000 to your Robinhood IRA for 2023, you'll receive a 1% ($50) match. Subscribers to Robinhood Gold, the broker's premium service, receive a 3% match on new contributions (but not rollovers), which can justify the cost of membership all by itself.

Is Robinhood the right place for your IRA?

To be fair, there's a lot more to consider when rolling over your IRA than where the best welcome bonus is. As mentioned, in order to keep the bonus, you'll have to leave the money invested through Robinhood for some time, so be sure the brokerage is a good fit. There are some investment types that Robinhood doesn't offer (such as mutual funds) that you might be interested in. So, the best course of action is to read through our Robinhood review as well as those of some of our other IRA brokers to find the best fit for your rollover IRA.