If you’re planning for retirement and looking for a low-fee, user-friendly investment platform, opening an IRA on M1 Finance could be an excellent move. This guide will walk you step-by-step through the process of how to open an IRA account on M1 Finance, including key decisions you’ll need to make along the way. Whether you’re new to investing or already have some experience, this article will help ensure you’re ready to get started with confidence.
Why Choose an IRA?
Before diving into the technical steps, it’s important to understand why an IRA (Individual Retirement Account) is a great retirement tool. IRAs offer tax advantages that help your investments grow over time—either tax-deferred (traditional IRA) or tax-free (Roth IRA).
Opening an IRA can be a major step in building a secure financial future, and platforms like M1 Finance make the process easier than ever.
Getting Started: Create Your M1 Profile
To open an IRA account on M1 Finance, the first step is creating your M1 profile. While this doesn’t yet count as opening a retirement account, it is a necessary step before you can proceed.
Step 1: Start the Application
- Visit the M1 Finance website or open their app.
- Enter your email address and click the verification link you receive in your inbox.
- Input your first and last name, address, and click Continue.
- Fill in your date of birth, citizenship status, and proceed.
These steps are standard for most investment platforms, so don’t be alarmed by the personal details requested.
Step 2: Financial Background
You’ll now need to provide some financial information, including:
- Annual income
- Amount of current cash and investments
- Social Security Number
After verifying that your details are correct, accept the terms and conditions and click Confirm.
Congratulations—your basic profile is now set up!
Choosing to Open an IRA Account on M1 Finance
Once your profile is ready, you can now open an IRA account on M1 Finance. Here’s how to proceed.
Step 3: Select Account Type
- Click Invest on the dashboard.
- You’ll see options to open an individual brokerage account or a retirement account. Choose Retirement Account.
- Click Open Account.
Step 4: Pick Your IRA Type
You’ll need to decide which type of IRA suits your financial situation:
- Traditional IRA – Contributions may be tax-deductible; however, withdrawals are taxed. There are no income limits to contribute, but Required Minimum Distributions (RMDs) start at age 73.
- Roth IRA – Contributions are made with after-tax dollars, but qualified withdrawals are tax-free. There are income limits, but no RMDs.
Choose the one that aligns best with your current income and future retirement goals, then click Continue.
Account Questions and Employment Details
You’ll be asked to answer several compliance questions that are standard across the financial industry:
- Are you affiliated with a broker-dealer?
- Do you own more than 10% of a public company?
- Are you or a close family member a public official?
- Are you subject to IRS backup withholding?
Answer honestly, as your answers help determine how your account is handled under U.S. law.
Step 5: Employment Information
Next, provide details such as:
- Employment status
- Net worth
- Investment experience
- Investment horizon and liquidity preference
You can also add a trusted contact—a person who can be contacted if there are concerns about your account activity. This step is optional but highly recommended.
Once finished, review all your answers and accept the disclosures.
Fund Your IRA
To actually open an IRA account on M1 Finance, you must fund it. Here’s how:
Step 6: Connect Your Bank
- Click Continue to start the funding process.
- M1 Finance uses Plaid, a third-party service that connects securely to your bank.
- Enter your phone number to verify, then search and log into your bank account.
- Authorize the connection and choose which account to link.
Once your bank is connected, you’ll be able to deposit money directly into your M1 IRA.
Step 7: Make a Deposit
- Enter the amount you’d like to transfer. The minimum is $100.
- If you don’t want recurring transfers, toggle off the recurring option.
- Click Confirm Deposit.
That’s it—your IRA is officially funded and ready for investment!
Build Your Portfolio
Now that you’ve managed to open an IRA account on M1 Finance, it’s time to build your portfolio.
Step 8: Choose Your Investments
- M1 uses a system called a “Portfolio Pie” where you assign percentages to different slices (stocks, ETFs, etc.).
- Click Build Your First Portfolio.
- Choose from a list of ETFs or stocks. For example, you might pick VTI, VOO, or QQQ.
- Add your selections and assign each a percentage until your pie totals 100%.
You can always edit your pie later by clicking Edit, then Add Slice to include new investments.
Buy and Sell on M1 Finance
Buying and selling on M1 is simple, though it’s important to note:
- Trades occur once per day, during the afternoon trading window (typically around 2 p.m. EST).
- To buy: Click Buy, enter the amount, and confirm.
- To sell: Click Sell, turn off Auto-Invest, enter the dollar amount, and confirm.
All sale proceeds are held in your account to await your next investment decision.
Advanced Portfolio Management
M1 Finance also offers advanced features:
Rebalancing
- Click Rebalance to automatically adjust your portfolio back to target allocations.
- This involves buying and selling slices as needed.
Auto-Invest
- When enabled, Auto-Invest uses all available funds to buy into your selected pie.
- If you prefer to manually invest, you can toggle this off at any time.
Final Thoughts: Why Open an IRA Account on M1 Finance?
To open an IRA account on M1 Finance is to take a powerful step toward your financial future. With automated investing tools, a clean interface, and customizable portfolios, M1 makes retirement planning accessible even for beginners.
Here are five key takeaways:
- The platform makes it easy to open an IRA account on M1 Finance in under an hour.
- You can choose between Roth and Traditional IRAs based on your tax strategy.
- Funding and investing are streamlined through bank integration and portfolio pie creation.
- Buying and selling is done efficiently, with automatic trade windows.
- Tools like Auto-Invest and Rebalancing help you manage your account passively.
Whether you’re just beginning your retirement journey or switching from another broker, learning how to open an IRA account on M1 Finance gives you the knowledge to take control of your future.
By following the steps outlined above, you’ll be fully equipped to set up your retirement account and begin growing your investments in a structured, tax-advantaged way.
