Rocket Dollar Review 2024

What is Rocket Dollar?

Rocket Dollar is a financial services company originating from Austin, Texas, in 2018, specializing in offering self-directed retirement accounts. Unlike traditional retirement accounts I’m used to seeing that have predetermined lists of approved assets, Rocket Dollar extends its users the liberty to invest in a broad spectrum of assets, encompassing both traditional and alternative investments such as cryptocurrencies, real estate, private equity, and peer-to-peer loans.

As an innovative platform, Rocket Dollar grants its users complete control over their investment choices. By partnering with Rocket Dollar, investors can expand their retirement portfolios, tapping into unconventional assets that standard retirement accounts don’t usually offer. Catering to a diverse range of clientele, from self-directed investors to solo entrepreneurs, Rocket Dollar offers a unique blend of flexibility, expertise, and diversification opportunities.

This distinctive approach, paired with a seasoned team boasting over a century of combined experience in the retirement industry, positions Rocket Dollar as a trailblazer in the realm of self-directed IRAs and Solo 401(k)s.

Their commitment to simplifying complex processes, ensuring transparency, and diversifying investment horizons makes Rocket Dollar a standout choice for those aiming to broaden their retirement investment landscape.

Full Rocket Dollar Review

I think you should consider Rocket Dollar if you’re looking to invest in alternative assets and are interested in a solo 401(k) plan or self-directed IRA.

You can invest in non-traditional assets using this Rocket Dollar’s platform, including cryptocurrencies, private equity, precious metals, real estate, and peer-to-peer loans.

Rocket Dollar is a great way to diversify your investment portfolio. You can still increase your portfolio even if your work offers a retirement plan by using Rocket Dollar to invest in non-traditional assets.

Rocket Dollar is best for:

• Self-directed alternative investment traders.
• Experienced investors.
• Everyday retirement savers.
• Day traders.

Although self-directed IRA service providers have been operating for some time, many investors I know have avoided them for two reasons: high fees and limited investment options.

These are the things new companies like Rocket Dollar have come to fix. It has a cutting-edge website that makes maintaining your account simple, offers transparent fees, and imposes no restrictions on the types of investments you can make.

There are currently not many reviews for Rocket Dollar on TrustPilot or other customer review sites. There is a decent amount of conversation on Rocket Dollar Reddit reviews, although most of this is related to investing crypto with Rocket Dollar. Unless you are a crypto investor, the Rocket Dollar Reddit reviews will not do you much good.

Investment Opportunities

Those who subscribe to Rocket Dollar’s self-directed investing services will enjoy a wide variety of alternative asset classes. All of these assets can be used to fund an investor’s retirement savings. The platform works with a few different investing partners who offer a streamlined investing process through Rocket Dollar. However, you’re not limited to only investing with Rocket Dollar’s partners.

The best part about investing with Rocket Dollar is that you can invest in any asset you’d like, though the process is more complicated for some. Listed opportunities will require the least setup on your part. Currently, these opportunities include:

• Metals
• Peer lending
• Commodities
• Startup lending
• Business loans
• Equity crowdfunding
• Conventional lending
• Private equity lending
• Various cryptocurrencies for crypto investors
• Real estate investments, such as REITs (real estate investment trusts) or rental properties

However, Rocket Dollar also supports “BYOD” (Bring Your Own Deal). BYOD is the process that allows investors to add unlisted deals offered by private companies to their IRA or 401(k) account.

Fortunately, you won’t have to navigate the paperwork alone. Rocket Dollar’s team of specialists will help you get everything set up, allowing you to easily and effectively expand your investments.

Investing in Traditional Assets

The main appeal to Rocket Dollar is that it allows investors to take advantage of many different investment opportunities. Traditional IRAs and 401(k) are managed by an investment team, which restricts the types of assets you can invest in.

These are fine options if you’d prefer to stick to more traditional options such as certificates of deposit, real estate investments, or mutual fund investments. However, if you’re one of the larger investors who need more variety in their portfolio, Rocket Dollar quickly becomes an appealing offer.

Nonetheless, why only invest in alternative assets? You should be able to enjoy both non-traditional and traditional investments; with Rocket Dollar, you can! Although Rocket Dollar doesn’t openly promote making traditional investments to fund your retirement savings, you still can if you open a brokerage account using your Rocket Dollar IRA or solo 401(k).

As long as the brokerage you’re considering accepts LLC applications, you’ll be able to invest in traditional assets on the brokerage through your LLC. When creating an account on the brokerage, you’ll need to provide your LLC’s EIN (Employer Identification Number) instead of your social security number.

• Open a business trading account if you have a self-directed LLC
• Open a trust trading account if you have a Rocket Dollar Solo 401(k) trust

I must note that you will not be able to have a margin account or short stocks. However, you can still trade options, puts, and calls.

Rocket Dollar Features

Through my in-depth review of Rocket Dollar, here are the features that I found most beneficial:

Self-directed Retirement Investing

Rocket Dollar gives you complete and total control, whereas most brokers let you select your equities or mutual funds. You could even own your herd of cattle if you so choose.

IRA LLC

At Rocket Dollar, when you create a new IRA, you also create a new LLC and LLC bank account. The IRA LLC legally holds your asset. This company is essential to the self-directed retirement account’s operation.

Rocket Dollar offers a range of Self-Directed IRAs tailored to empower investors with more control over their retirement savings. Unlike conventional retirement accounts that limit you to specific asset classes, Rocket Dollar’s IRAs grant you the flexibility to explore various investment avenues, including unconventional ones such as cryptocurrency.

The types of Self-Directed IRAs provided by Rocket Dollar encompass:

• Traditional IRAs: An option for those looking for tax deductions now, allowing annual contributions of up to $6,000 or $7,000 for those aged 50 and above.
• Roth IRAs: Catered for investors aiming for tax-free withdrawals in retirement. Just like the Traditional IRAs, the yearly contribution limit is $6,000 or $7,000 for those 50 years and older.
• Rollover IRAs: Designed for individuals transferring funds from another qualified plan. The contribution depends on the amount being rolled over.
• SEP IRA: This is particularly advantageous for business owners. It lets you contribute a significant portion, up to 25% of your business’s net income. However, the yearly cap for such contributions is $56,000.

Ultimately, Rocket Dollar’s Self-Directed IRAs provide a broader investment spectrum, especially for those wanting to move beyond the usual bounds of retirement savings.

Solo 401k

Rocket Dollar offers a Solo 401(k) plan tailored for self-employed individuals without any employees. This distinct plan is not only advantageous due to its design mirroring a traditional 401(k), but also because it allows the account holder to wear dual hats: that of an employer and an employee.

When acting as an employer, a participant can contribute a substantial 25% of their total earnings into the Solo 401(k). In the capacity of an employee, they can amp up their savings with a yearly contribution of up to $57,000. Such a structure not only magnifies the saving potential but also brings along the enticing tax benefits typically associated with 401(k) plans.

To facilitate the operation of a Solo 401(k), Rocket Dollar provides the necessary infrastructure in the form of a trust account, which is foundational to the plan. They assist by generating essential documents like the EIN and plan papers. If one’s investment trajectory includes Roth considerations or real estate ventures, additional accounts, or even an LLC within the Solo 401(k) plan can be set up.

Once the bank account is operational, be it under a trust or LLC, investing becomes straightforward. Investors have the liberty to delve into traditional investment avenues such as stocks, bonds, ETFs, mutual funds, and options. And if desired, these investments can be channeled through brokerage accounts nestled within the trust or LLC, all under the overarching canopy of Rocket Dollar’s Solo 401(k).

Checkbook Control

Once your account is active, you have what Rocket Dollar terms a “checkbook control.” This implies you can use the LLC bank account’s checkbook to purchase assets.

Note: Please consult your legal counsel to ensure that your investments do not turn into prohibited transactions, which could have very costly consequences.

Limitations

Investing with a Rocket Dollar Self-Directed IRA or Solo 401(k) comes with many advantages, such as having access to various types of assets and FDIC cash balance protection. Still, similar to traditional investing with conventional assets, there are still limitations and restrictions that self-directed investors must adhere to. You’ll want to make sure that—if you have any potential investment in mind—your investments will fall within these guidelines.

Here are a few examples of things I think you should keep in mind while considering potential contributions to your retirement funds:

• Solo 401(k)s are for self-employed persons and sole proprietors only. You are not eligible for this plan if you have any employees, and no employees—excluding your spouse—can make plan contributions
• You cannot exceed annual employee and employer contribution limits. These limits change yearly, so we recommend looking at the updated limitations to ensure you don’t over-contribute.
• Some assets—such as life insurance or collectibles—are considered “prohibited transactions” by the IRS. Ensure your investments are permissible assets before finalizing your investment.

Is Rocket Dollar Legit?

Yes, Rocket Dollar is indeed a legitimate company. Established in 2018, it operates a self-directed IRA and solo 401(k) platform that allows investors to invest in traditional assets as well as alternative assets not typically available in traditional brokerage accounts. The company has been favorably reviewed by many customers and industry publications for its innovative approach to diversifying investment portfolios.

Rocket Dollar adheres to the regulations laid out by the Internal Revenue Service (IRS) for self-directed IRAs and solo 401(k)s. They provide a legal structure—an LLC or trust—to hold your assets, and they give you the tools to invest in a wide variety of assets, from traditional stocks and bonds to alternative investments like real estate, cryptocurrencies, and private equity.

The company also employs robust security measures to protect customer data, and they are transparent about their pricing structure, which includes a one-time setup fee and a recurring monthly fee, depending on the plan chosen.

However, as with any investment platform, it’s important for potential investors to understand the inherent risks associated with investing, particularly in alternative assets. While Rocket Dollar provides the platform and tools for investment, it’s up to each individual investor to make informed decisions about their investments.

Furthermore, Rocket Dollar’s customer service is accessible and responsive, helping guide customers through the process and answer any questions they may have.

The Benefits of Having Alternative Investments in a Retirement Account

Incorporating alternative investments into your retirement account can offer several potential benefits, adding a unique dimension to your long-term investment strategy. I can think of a few reasons why you might want to consider these non-traditional assets:

• Diversification: Alternative investments, which include assets like real estate, commodities, private equity, and cryptocurrencies, can provide your portfolio with additional diversification. They can behave differently than typical stocks and bonds, helping to spread risk and potentially mitigate losses during volatile market periods.
• Potential for High Returns: Some alternative investments, such as private equity and venture capital, can offer substantial returns, often exceeding those of traditional markets. While these types of investments can carry more risk, the potential for significant growth can be a compelling factor for inclusion in a retirement portfolio.
• Hedge Against Inflation: Certain alternative investments like real estate and commodities can act as a hedge against inflation. These assets often appreciate in value when inflation rises, protecting the purchasing power of your retirement savings.
• Reduced Correlation to Traditional Markets: The performance of alternative investments is often less correlated with traditional markets. This means when stocks or bonds are performing poorly, your alternative investments may still do well, providing a buffer for your portfolio.
• Access to New Opportunities: Alternative investments can expose your portfolio to emerging trends and sectors. For example, investing in cryptocurrencies or certain private equities can offer exposure to cutting-edge technologies and innovative business models.
• Increased Control: If you are an experienced investor, having alternative investments allows you more control over your retirement portfolio. You can leverage your knowledge and expertise in certain markets to potentially enhance returns.

However, it’s important to remember that alternative investments are not suitable for everyone. They often involve a higher degree of risk, complexity, and may have lower liquidity compared to traditional investments.

Therefore, they are typically recommended for sophisticated investors who understand these risks and have a longer investment horizon. As with all investment decisions, it’s best to consult with a financial advisor or investment professional before venturing into alternative investments.

Who is Rocket Dollar Best For?

Rocket Dollar’s services are specifically designed to appeal to a certain type of investor. Given its emphasis on self-directed investing and alternative investments, here are the categories of individuals who I think will find Rocket Dollar most beneficial:

• Self-Directed Investors: Rocket Dollar is an excellent platform for self-directed investors who are comfortable making their own investment decisions without the need for extensive guidance or hand-holding.
• Alternative Asset Investors: If you’re interested in investing in alternative assets such as real estate, private equity, peer-to-peer lending, cryptocurrencies, and commodities, Rocket Dollar offers a platform where these types of investments are not only possible but also encouraged.
• Experienced Investors: Due to the complexity and inherent risks of alternative investments, Rocket Dollar is best suited for experienced investors who understand these risks and have the knowledge to navigate the investment landscape effectively.
• Self-Employed or Solo Entrepreneurs: The solo 401(k) option is particularly beneficial for self-employed individuals or solo entrepreneurs. It allows for potentially larger contributions than a traditional IRA and provides a way to invest in a broader array of assets.
• Investors Seeking Diversification: If you’re looking to diversify your retirement savings beyond traditional stocks, bonds, and mutual funds, Rocket Dollar can provide the tools and platform to do so.
• Long-Term Investors: Given the long-term nature of many alternative investments and the tax advantages of IRAs and 401(k)s, Rocket Dollar may be especially attractive to long-term investors.

Remember, while Rocket Dollar provides a unique opportunity for these types of investors, it’s always important to consider your personal financial goals, risk tolerance, and investment knowledge before diving into alternative investments or self-directed investing.

Rocket Dollar Pricing

For creating your account, Rocket Dollar charges a one-time activation fee. The applicable activation fee and ongoing membership fee vary, depending on the plan you choose. You may also be responsible for ACH or wire transfer fees. While Rocket Dollar itself does not charge commission fees, the platform(s) you use to acquire assets may do so. You should take these additional costs into consideration when planning your retirement savings investment decisions.

Membership Types

Rocket Dollar provides two membership options: the silver Account and the Gold Account.

The silver Account is the basic package. You don’t need a minimum amount to start, and moving funds from another account is free. With this account, you get a dashboard to see your investments, an LLC for IRA investments, online document storage, and email support. There’s a one-time setup fee of $360, and then it’s $15 every month.

For a more advanced option, there’s the Gold Account. It has everything the Core Account offers plus faster services, four free wire transfers a year, a debit card for the investment account, a custom-named LLC for the IRA, and better support. The setup fee is $600, and then you’ll pay $30 every month.

Regarding costs, the silver Account’s $15 monthly fee adds up to $180 a year. If you’ve invested $100,000, that’s a yearly rate of 0.18%. This is lower than most other services like robo-advisors that charge between 0.25% and 0.5%. But remember, if you invest less, like $10,000, the rate is higher at 1.8%.

I like the flexibility Rocket Dollar allows. You can pay these fees using a debit card from your retirement fund or a personal credit card.

Rocket Dollar Alternatives

If something in my Rocket Dollar review was a red flag that convinced you that it isn’t right for you, don’t worry, there are a few worthy contenders out there. If you are an active trader that likes to stay connected, Robinhood is always an option. Robinhood offers a simple, low-cost trading app. You can check out my Robinhood review to learn more about them.

Another one of Rocket Dollar’s competitors that I must mention is SoFi Invest. Although they have only been in business since 2019, SoFi Invest offers many of the same IRA benefits as Rocket Dollar. Currently SoFi Invest is even offering no commission fees. This SoFi Invest review will let you know how it stacks up.