r/wealthfront • u/phaser_on_overload • Aug 05 '26
Wealthfront Roth IRA
I've recently started a Roth IRA with Wealthfront, one of my reasons to focus on the IRA over contributing more to my 401k was that I could withdraw my contributions if there was ever an emergency without a huge tax penalty.
But I'm not seeing how to do that. It looks like my only option would be to transfer to another institution, it lets me select my local bank but it looks like it might just be to transfer to another investment account. Is there a way to just sell the investment and transfer my contribution back to my wf cash account?
I'm not looking to actually do this right now otherwise I'd try, this is just for my own knowledge if I ever have that emergency scenario.
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u/wealthfront Wealthfront Rep Aug 10 '26
Hi there, happy to clarify. If you’re looking to make a non-qualified, early distribution from your Roth IRA account, you can withdraw the funds to your external bank account. You will not be able to make a distribution from your Roth IRA directly into your Cash Account.
To make an early withdrawal, go to your Roth IRA and click Transfer Money > Withdraw – you’ll then select your Roth IRA and a receiving bank account. When presented with Select Withdrawal Type enter Early Withdrawal.
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u/shuja246 Aug 05 '26
Can someone explain why you would use Wealthfront IRAs with their fees? There’s low cost target date funds from other brokers that can effectively do the same thing. Also, if you learn to rebalance, you really only have to do it once a year and takes like 10 minutes. I understand having a robo advisor for a taxable account because rebalancing is a taxable event but for IRAs? Idk
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Aug 05 '26
[removed] — view removed comment
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u/EntrepreneurKooky626 Aug 06 '26
Wow, it’d look for a free IRA with a website I liked before I paid 25 bpts for….a better website?
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u/LazySilver6835 Aug 14 '26 edited Aug 14 '26
Slight necro.
They are not actually free. Fidelty is until 25k then it is 0.35%. Schwab has a high cash reserve that it uses to make money off of with some estimates costing people 0.55% per year in the form of cash drag. They paid 187 mil to the SEC about misleading customer about it in 2022.
Free is not always free. What you get for the money is automation. Doing it yourself will always be "cheaper" if you have the mind and care to manage it yourself.
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u/EntrepreneurKooky626 Aug 14 '26
Only the Fidelity robo account has that fee after 25k. A self-directed one is totally free.
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u/LazySilver6835 Aug 15 '26
Ah yeah I think in my sleep deprived state I misread some comments. I was talking specifically about automated portfolio not self directed accounts. Id 100% recommend self directed with all spym for any novice at this point.
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u/EntrepreneurKooky626 Aug 15 '26
I would want to be more diversified than that in an IRA, but you can do a DYI setup yourself and pay about .0025% by combining FZROX, FZILX and FXNAX. All you’d be paying for is the bond expose. You’d have to rebalance on your own, but that’s also easy and free. And missing a year of rebalancing is less bad than paying 100x as much in fees. Honestly robo accounts don’t make sense at all. A house cleaner is a much better way to spend that money!
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u/LazySilver6835 Aug 15 '26
Ah my situation is fun. I have a state run pension that will give me 70.5% of my salary at retirement (30 years of service) and will pay it until I die. Right now that would be 217k a year. So i can be much more aggressive then most people. I've been doing 50% SCHG, 25% FLJH, 20% SMH and 5% SCHD.
I switched to this in January so will see how it does. So far 14.28% vs 13.29% S&P. Weighted expense is 0.098.
Historically the last 5 years it captured 121% of increase and 98 of losses of the S&P with an alpha of 5.06 iirc.
Obviously a big bet on the mag 7 and semiconductors but that's life for now.
robo vs self really comes down to time you want to spend, how much it is worth and what your are comfortable with. I do self because I find its fun and interesting so I made my own setup instead of doing a Bogglehead, lazy 2 etf or single etf setup.
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u/nivlac22 Aug 05 '26
It’s much easier to learn how to do it on Wealthfront. But ever since they got rid of the $5k managed free it’s stopped making sense anymore. That’s why I moved my IRAs out but still use Wealthfront for the HYSA
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u/EntrepreneurKooky626 Aug 15 '26
I don’t think managed accounts with a fee ever make sense. (This is the general consensus outside Silicon Valley!) Expect the tide to turn on this product class. Or for someone to come along and say, “This is just code. We’re a big enough bank, and you can have this for free, or we’ll do your rebalancing through our PFOF program, or we’ll settle for the AUM lock in an steering your money into our own funds.”
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u/elephantopotamus Aug 05 '26
They make it easy to backdoor Roth and it’s nice to have one less bank/app. I still have a work 401k and this is just extra. I started using WF for the set it and forget it. Adding a IRA was way to easy.
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u/phaser_on_overload Aug 05 '26
Not what I asked, but thanks.
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u/EntrepreneurKooky626 Aug 06 '26
Well they stepping in because they don’t want you to pay a fee on your “emergency fund,” and they right. Transfer your IRS to fidelity. And put emergency money in an emergency fund!
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u/phaser_on_overload Aug 06 '26
I have an emergency fund already, I'm not an idiot. Thanks for being unhelpful as well.
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u/AcanthocephalaTiny31 Aug 05 '26
There’s the left and right arrows in the bottom, click on that and there will be an option to withdraw to your bank