Wealthfront IRA Review 2024: Features, Fees, and More

The Bottom Line

Easily a front-runner for the best overall robo-advisor, Wealthfront offers a variety of automated investing accounts situated in an easy-to-use interface. Many consider the Wealthfront user experience a simple and straightforward one. Wealthfront offers a taxable investment account, plus many types of accounts specifically geared toward retirement. All offer passive investing that can help you reach your financial goals with minimal effort.

Users get tax savings thanks to Wealthfront’s automatic tax loss harvesting on taxable accounts and automatic rebalancing. All of this comes with a low account management fee of 0.25% per year.

But if you’re looking for human financial advisors, you’ll need to look elsewhere: Unlike other trading platforms, Wealthfront does not offer the opportunity to interact with a real, live human advisor. Additionally, if you want more control over your stock investing account or to actively manage your investments, a regular brokerage firm might better suit your needs.

Wealthfront Fees

Most automated accounts charge what’s known as an annual advisory or management fee to manage your portfolio for you. This fee is usually expressed as a percentage of your assets that’s paid each year, e.g., 0.50% per year.

Paying for a Wealthfront investment account is no different. The firm offers its investment management services for 0.25% per year, e.g., $25 for a $10,000 account. Mutual fund and ETF expense ratios range from 0.06% to 0.13%. In other words, you’d expect to pay $6 to $13 on a $10,000 investment.

What You Can Invest In

Wealthfront stands out from other robo-advisors thanks to its expert-curated investment options. When you set up your Wealthfront account, you’ll answer a series of questions about your financial situation, goals, and preferences. This is known as a risk tolerance questionnaire. It’s a common starting point when creating an investment portfolio.

Based on your answers, Wealthfront will calculate your risk score and create a portfolio for you. The money in your automated investing account will be allocated across a combination of asset classes like equities (stocks), fixed income (bonds), and international investments. Like other robo-advisors, Wealthfront tends to invest your money in exchange-traded funds (ETFs) and low-cost index funds that allow you to get easy access to a diversified mix of investments in these asset classes.

Wealthfront also separates out its investment options into categories based on your goals and preferences. For instance, you can choose to invest in ETFs focused on technological innovation or put your money into cryptocurrency trusts, or you can opt for socially responsible portfolio options that align with your values. While the funds themselves are pre-arranged (and therefore pre-diversified), you have a lot of say when it comes to where your money is going.

Wealthfront Limitations

Wealthfront only allows investors to buy individual stocks and fractional shares of individual stocks if they have a stock investing account. In addition, it doesn’t offer access to a human advisor, so it’s not ideal for people who aren’t comfortable with a completely automated investment account.

Wealthfront Account Minimums

You’ll need a minimum of $500 to open an investment account. For its exclusive offerings—including the Wealthfront Risk Parity Fund, and U.S. Direct Indexing (formerly known as Stock-Level Tax-Loss Harvesting), Wealthfront asks for an initial deposit of at least $100,000. Those who deposit $500,000 or more will automatically get access to Smart Beta, which maximizes returns by better weighing the securities in your portfolio,

Still, the bulk of its services are available to investors with far less start-up capital. You’ll get tax-loss harvesting and automatic rebalancing on all taxable accounts, along with access to Wealthfront’s unique approach to portfolio management.

Wealthfront Customer Support

One potential drawback: Wealthfront customer service is hard to access, with the website directing investors to the “help center,” a database of articles tackling frequently asked questions, before offering a contact form option to get in touch with their team. A Wealthfront customer service contact phone number is not easy to find. Unfortunately, the company earns lower-than-average customer reviews on forums like TrustPilot and the Better Business Bureau.

Wealthfront Account Types

Wealthfront offers a wide range of investment accounts, including retirement-specific accounts like IRAs as well as individual taxable brokerage accounts, joint accounts, and trusts. For those interested specifically in retirement investing, Wealthfront offers the following options:

Traditional IRA

A Wealthfront traditional IRA offers the opportunity for your retirement funds to grow tax-deferred. Most people can also score a tax break in the year contributions are made. Traditional IRAs are available to anyone who earns taxable income, regardless of how much income you earn, though they are subject to annual contribution limits. For 2024, the contribution limits are $7,000, or $8,000 for those age 50 or older.

Roth IRA

A Roth IRA is a retirement savings vehicle that you fund with post-tax contributions. That means that down the line, you can withdraw retirement funds tax-free. Roth IRAs also allow savers to pass down tax-free gifts to heirs. Unlike traditional retirement funds, they aren’t subject to RMDs during the original account holder’s lifetime. They are, however, still subject to annual contribution limits.

SEP IRA

SEP IRAs, or Simplified Employee Pension plans, are built for employees and individual contractors. They allow an employer to contribute up to 25% of an employee’s pay to the account along with employee contribution—which, for self-employed individuals, can substantially increase the total amount they can contribute each year.

401(k) Rollovers

Wealthfront makes 401(k) rollovers easy for those who are changing jobs or have found old 401(k) funds they want to keep better track of. Old 401(k)s are rolled over into IRAs that match the original account’s tax structure.

Other Features

Wealthfront’s platform can help you invest for personal finance goals other than just retirement. The platform offers general brokerage investment accounts (both individual and joint), a college savings account, and cash accounts as well. The high-yield, FDIC-insured Wealthfront cash management account works in a similar way to a bank account but offers a high interest rate that can help put your money to work, all with no annual advisory fee.

Wealthfront cash account customers can get started with a minimum deposit of just $1, and the account comes with a Visa debit card so you can access your funds whenever you need. Current interest rates are as high as 5.00% APY.

Considering a Wealthfront IRA?

Wealthfront offers one of the best robo-advised IRAs on the market, with a wealth of different asset classes and sectors available to investors. Plus, it has additional offerings, including a college savings plan and an interest cash account that works like a checking account, that allows you to save and invest for a number of goals. Wealthfront is a good choice for “set-it-and-forget-it” investors who want to keep all their financial accounts in one place. Just remember: Wealthfront advisers are not easily available for those looking for real, live, human interaction.

If you’re looking to fund your new Wealthfront IRA with a 401(k) rollover, Capitalize can help. We’ve made it our mission to make this process easier for everyone. We can handle the entire process for you. Most of the process can be done online and our rollover experts will guide you through any of the manual parts. Get started with your 401(k) to Wealthfront IRA rollover in just a few minutes.