What To Know Before Signing Up To Rocket Dollar – Is The Flexibility Worth The Cost?

Jeremy BiberdorfBy: Jeremy Biberdorf

December 13, 2023December 13, 2023

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In this Rocket Dollar review, I will dive into what to know before signing up to Rocket Dollar, a platform that provides an avenue for investing retirement funds in diverse assets like real estate, cryptocurrency, and startups. Rocket Dollar specializes in self-directed Solo 401(k)s and IRAs, allowing individuals more freedom in their investment choices compared to traditional stocks, bonds, and funds typically available through mainstream brokerages.

Rocket Dollar stands out for offering a relatively low-cost investment platform, making self-directed IRAs more accessible to the average person. It is particularly beneficial for self-employed individuals or those with substantial IRA or rollover IRA accounts who are considering self-directed options.

My comprehensive review aims to provide insights into Rocket Dollar’s services, helping you determine if this self-directed platform aligns with your investment strategy and retirement planning goals.
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What to Know Before Signing up to Rocket Dollar

Before you sign up to Rocket Dollar, you need to know all about the unique investment opportunities it presents, pricing, and potential limitations. But let’s start with a little background information.

What is Rocket Dollar?

Founded in 2018 and based in Austin, Texas, Rocket Dollar is a financial services company specializing in self-directed retirement accounts. It stands apart from traditional retirement accounts with its flexibility in investment choices, offering a wide range of assets including cryptocurrencies, real estate, private equity, and peer-to-peer loans.

Rocket Dollar’s platform empowers investors with complete control over their investment decisions, a notable departure from standard retirement accounts that typically limit investment options to pre-approved lists. This allows users to diversify their retirement portfolios with unconventional assets.

Targeting a diverse client base, from individual self-directed investors to solo entrepreneurs, Rocket Dollar provides a unique combination of flexibility and expertise in retirement planning. Its approach to investment, coupled with a team that has over a century of collective experience in the retirement industry, positions Rocket Dollar as a pioneering force in the field of self-directed IRAs and Solo 401(k)s.

As a relatively new player in the investment platform market, Rocket Dollar is known for its low-cost, user-friendly platform tailored to self-directed investors.

Rocket Dollar Benefits

Here are the benefits I believe you should be aware of before beginning to consider signing up to Rocket Dollar:

  • IRA LLC: Rocket Dollar establishes a new LLC and LLC bank account for each new IRA created. The IRA LLC legally holds your asset, playing a crucial role in the operation of self-directed retirement accounts.
  • Self-Directed IRAs: Offering more control over retirement savings, Rocket Dollar’s IRAs include:
    • Traditional IRAs: Ideal for those seeking immediate tax deductions, with annual contributions up to $6,000, or $7,000 for those over 50.
    • Roth IRAs: Suited for investors desiring tax-free withdrawals in retirement, with the same contribution limits as Traditional IRAs.
    • Rollover IRAs: Designed for transferring funds from other qualified plans, with contributions depending on the rollover amount.
    • SEP IRA: Beneficial for business owners, allowing contributions of up to 25% of net business income, capped annually at $56,000.
  • Solo 401k: Tailored for self-employed individuals without employees, the Solo 401(k) allows dual contributions as both employer and employee. The employer contribution is up to 25% of earnings, while the total contribution can reach $57,000 yearly. Rocket Dollar facilitates this with necessary documentation and the option for additional accounts or LLCs for investments like real estate or Roth considerations.
  • Flat Annual Fee: Beneficial for large account balances, Rocket Dollar charges a minimum annual fee of $180, regardless of account size, a cost-effective alternative to percentage-based asset management fees.
  • Expedited Option: For urgent investments, Rocket Dollar’s Gold customers can have their account funded within 15 days, ensuring timely investment opportunities are not missed.
  • Investment Flexibility: Unlike other self-directed providers that limit investment choices, Rocket Dollar allows investments in a broad range of permissible assets within tax-advantaged accounts, including crypto investments through various platforms like Coinbase or private wallets.

Rocket Dollar Limitations

There are a few potential limitations you should be aware of before deciding to sign up to Rocket Dollar as well. Here is what I believe to be the main ones:

  • Initial Setup Fee: Rocket Dollar charges a one-time setup fee, applicable even for accounts starting at $0 balance. This setup fee can be a significant cost for investors, especially those not planning to contribute the maximum amount each year. For smaller investors, this upfront cost might make Rocket Dollar less appealing compared to providers that charge percentage-based fees.
  • Flat Annual Fee: The platform’s minimum annual fee is $180, which can be relatively expensive for those with smaller account balances. For instance, an account balance of $18,000 would incur an effective annual fee of 1%, comparable to top alternatives. However, for balances lower than this, the fee percentage becomes higher, making it a costlier option.
  • Limited Customer Service for Lower-Tier Accounts: Rocket Dollar prioritizes its Gold clients (who pay a higher annual fee of $360 and a setup fee of $600) over Silver clients. Silver account holders have restricted customer service options, limited to email support or scheduled phone calls. Immediate live assistance through phone or chat is not available for them.
  • Suitability for Hands-On Investors: The platform is geared towards investors who are actively involved in managing their accounts. Even with passive investments like a crypto index fund, users need to be diligent in managing their accounts, understanding permissible investments, and ensuring transactions are kept separate from personal investments. Additionally, Silver customers are required to manage certain administrative tasks themselves, such as filing Form 5500.

Rocket Dollar Pricing

Rocket Dollar’s pricing structure involves a one-time activation fee and ongoing membership fees, which vary based on the chosen plan. Additionally, users may incur ACH or wire transfer fees, and while Rocket Dollar doesn’t charge commission fees, the platforms used for asset acquisition might.

Membership Options:

  • Silver Account: This basic package requires no minimum amount to start, and transferring funds from another account is free. It includes a dashboard for investment tracking, an LLC for IRA investments, online document storage, and email support. The one-time setup fee for the Silver Account is $360, followed by a monthly fee of $15.
  • Gold Account: This advanced option includes all the features of the Silver Account, plus faster service, four free wire transfers per year, a debit card for the investment account, a custom-named LLC for the IRA, and enhanced support. The setup fee for the Gold Account is $600, with a monthly fee of $30.

Final Thoughts

In summary, Rocket Dollar offers unique self-directed retirement account options, allowing for a wide range of investment opportunities beyond traditional assets. With its two-tiered membership structure – Silver and Gold – and associated fees, it caters to diverse investor needs, from basic account management to more enhanced services.

Before signing up, consider the one-time setup fee and annual costs in relation to your investment size and desired level of support. Rocket Dollar is ideal for hands-on investors seeking to diversify their retirement portfolio into non-traditional assets. For those interested in exploring the potential of self-directed IRAs or Solo 401(k)s with Rocket Dollar, Click Here.

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Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

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