How to Open an IRA on Betterment

Setting up an Individual Retirement Account (IRA) can be a key step toward securing your financial future, and Betterment offers an intuitive platform that helps streamline the process. Whether you choose a traditional IRA or Roth IRA, the platform allows you to invest in diversified ETF portfolios automatically or manually, depending on your level of experience and preferences. In this guide, we’ll walk you through how to open an IRA on Betterment from start to finish, covering everything from account selection to portfolio customization and funding.

Why Choose an IRA?

Before we dive into the practical steps, it’s helpful to understand what an IRA is. An IRA is a retirement savings account that provides tax advantages for your investments. Betterment offers several types of IRAs:

• Traditional IRA – Contributions may be tax-deductible; withdrawals in retirement are taxed as income.
• Roth IRA – Contributions are made with after-tax income; withdrawals in retirement are tax-free.
• SEP IRA – Designed for self-employed individuals or small business owners.

Now, let’s move on to how to open an IRA on Betterment.

Getting Started: Begin the Application

Step 1: Visit the Betterment Website

You can start by navigating directly to Betterment’s homepage. Once there, click the “Get Started” button.

You’ll be shown various account options, including:

• Investing Account
• High-Yield Cash Account
• Bond Investing Account
• Crypto ETF Investing
• Checking Account
• IRA Account (our focus here)

Choose “IRA Invest” to proceed.

Step 2: Create Your Betterment Account

To open an IRA on Betterment, you must first create a user account. Input the following details:

• Email Address
• Password
• First and Last Name
• Phone Number

Accept the terms and conditions and click Continue. You’ll receive a confirmation email—be sure to verify your email address before proceeding.

Step 3: Complete the Basic Profile

Betterment will now guide you through a series of questions to build your financial profile. This step is crucial for compliance and for Betterment to tailor investment recommendations.

Here’s what you’ll be asked:

• Home Address
• Date of Birth
• Social Security Number
• Security Questions (choose and answer at least one)

These are standard questions required by most financial institutions.

Step 4: Build Your Financial Profile

Next, you’ll complete the following fields:

• Employment Status (if employed, include your occupation and employer info)
• Tax Filing Status
• Annual Income
• Estimated Net Worth or Investments
• Investing Experience (none, limited, good, or extensive)

Answer honestly—this helps Betterment shape your portfolio appropriately.

Step 5: Regulatory Questions

You’ll be asked to confirm if:

• You are affiliated with a brokerage or financial institution
• You hold more than 10% in a public company
• You are subject to backup withholding by the IRS

If none apply, select “None Apply” and move forward.

Step 6: Choose Your IRA Type

Now it’s time to choose your account type. This is a critical part of how to open an IRA on Betterment.

Betterment offers:

• Traditional IRA
• Roth IRA
• SEP IRA

For this guide, we’ll proceed with a Traditional IRA. The process is the same for a Roth IRA.

You’ll be asked:

• Are you saving for retirement or already retired?
  Select accordingly, as this affects your portfolio risk level.
• Retirement Age
  The default is age 68, but you can change this depending on your goals.
• Household Income and Spouse Info (if applicable)
  Fill in details or skip the spousal section if not applicable.

Step 7: Set a Goal and Visual Preferences

• Set your financial goal—usually labeled as “Retirement” by default.
• Choose an image or icon to personalize your goal (optional).

Step 8: Portfolio Selection

Now comes the heart of Betterment’s functionality. You can choose:

1. Pick a portfolio for me – Based on your risk profile and retirement age.
2. Pick the portfolio myself – Select from Betterment’s available portfolios.
3. I want more flexibility – Create a fully customized ETF portfolio.

If you’re new to investing, it’s generally recommended to go with the first or second option. However, if you want full control, proceed with option three.

Building a Custom Portfolio

Betterment provides a limited but diverse list of ETFs to choose from:

• 13 U.S. Stock ETFs
• 3 International Stock ETFs
• 7 U.S. Bond ETFs
• 2 International Bond ETFs

For example, if you want to add exposure to VTI (a well-known total U.S. market ETF), you can manually assign a percentage of your portfolio to it. Adjust other ETFs to ensure your allocation adds up to 100%.

Note: Detailed information on ETF performance is not provided within Betterment’s interface, so you may need to research externally.

Once satisfied with your allocation, click “Use This Portfolio.”

Step 9: Finalize Account Setup

Now you’re nearly done. Click “Open Account” and accept the terms and conditions again.

Congratulations! You’ve just completed all the steps required to open an IRA on Betterment.

Step 10: Connect Your Bank Account

The next step is to fund your account. Here’s how:

1. Click “Connect to Bank Account”.
2. You’ll receive a text message with a 6-digit code.
3. Use Plaid, the service Betterment uses to link bank accounts securely.
4. Select your bank (e.g., Capital One), and log in to verify.
5. Choose the account you want to link and authorize access.

Once connected, return to Betterment and proceed.

Step 11: Fund Your IRA

You now have the option to deposit money:

• One-Time Deposit
• Recurring Deposits (weekly, bi-weekly, monthly, etc.)

Even a small amount, like $2, can be deposited to start. Set your frequency and click “Review Deposit”, then Submit.

Funding your account regularly through automation is a solid long-term strategy. Once your deposit is complete, your IRA is not only open but funded and investing.

Key Takeaways

To recap, here are the main steps to open an IRA on Betterment:

1. Create a Betterment account
2. Choose the IRA account type
3. Fill in personal and financial details
4. Select your investment goal and retirement age
5. Build or choose a portfolio
6. Connect your bank
7. Fund your account

Betterment’s streamlined interface makes this process manageable even for beginners. You’ll be guided at every step, but still have the flexibility to tailor your investment strategy if desired.

If you’re serious about retirement planning and want a hands-off yet intelligent platform to help grow your savings, opening an IRA on Betterment could be a strong option.

Final Thoughts

Opening a retirement account is a meaningful first step toward long-term financial independence. With platforms like Betterment, it’s never been easier to start. This guide has shown you how to open an IRA on Betterment in clear, actionable steps. Now the next move is yours.