Stash offers two types of retirement accounts (also known as IRAs): a Roth IRA or a Traditional IRA. When you sign up for Stash, we’ll help you pick the account that’s right for you. 

By adding a little money to your retirement account consistently over time, you could be setting yourself up for a healthy nest egg. Learn more about our investing philosophy

What’s the difference between a Traditional IRA and a Roth IRA?

The major difference between the two IRAs is that contributions to a Roth IRA are not tax deductible, the account grows tax free, and eligible withdrawals are not taxed; while contributions to a Traditional IRA are tax deductible and your tax is deferred until you make a withdrawal during retirement. While contributing to a Traditional IRA maximizes your current tax savings,  the tax is deferred, which means that your retirement balance will be reduced by taxes when withdrawn. 

Note: You should consult with a tax professional (like an accountant) to help you decide which account is right for you and your specific tax needs.

The Roth IRA

When you make a contribution into a Roth IRA, you are contributing post-tax money. This means you’ve already paid taxes on the money you’re contributing.

While your contributions aren’t tax deductible in the year they are made, the benefit to Roth IRAs is that your investments grow tax-free. This means you won’t pay taxes on your money when you take it out after you reach retirement age (59 ½), assuming certain requirements are met.

Note: If you withdraw funds from your Retire Portfolio before age 59 ½, you may be subject to tax penalties.

The Traditional IRA

With a Traditional IRA, you are contributing pre-tax dollars. This means you have not yet paid taxes on the money you’re contributing.

This can make you eligible for tax deductions now, however, you will be taxed on the money when you take it out of your account during retirement. If you make a withdrawal before age 59 ½, you may be subject to an additional 10% tax. 

Withdrawing from your Retirement Portfolio:

You can either make a partial withdrawal from your Retirement Portfolio completely, or you can close it completely. 

Important Note: The minimum age to withdraw money from an IRA is 59 ½ years old. If you withdraw funds from your Retire Portfolio before age 59 ½, you may be subject to tax penalties from the IRS.

Partial withdrawal:

1. Make sure your external bank account is linked. Get help changing your bank account here
2. Sell a portion of your investments in your IRA, and wait for the sales to settle (up to three business days). 
3. After the sale has settled, click here to be taken to your Stash account to begin the withdrawal process. 
4. Your money will be sent to your linked bank account in 2-4 business days. 

Close completely:

1. Make sure your external bank account is linked. Get help changing your bank account here
2. Sell all of the investments held in your portfolios, and wait up to three business days for your sales to settle.
3. Wait up to an additional 6 days for any recent deposits to be available to withdraw
4. After the deposits are available to withdraw, click here to be taken to your Stash account to begin the withdrawal process. 
5. Your money will be sent to your linked bank account in 2-4 business days.

Important Note: Closing your IRA will not close your subscription. Get help closing your subscription

This should not be construed as tax advice. Stash does not monitor whether a customer is eligible for a particular type of IRA, or a tax deduction. Clients should consult with a tax advisor.