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Dec

2025

Is a SIMPLE IRA the Same as a Traditional IRA?

By Laurel Tincher | Growing Wealth, invest, Investing, Preparing for Retirement | Comments Off

One of the most popular retirement accounts is an IRA, or Individual Retirement Account. IRAs allow individuals to put money aside over time to save up for retirement, with tax benefits similar to those of other retirement plans.

Two common IRAs are the SIMPLE IRA and the Traditional IRA, both of which have their own benefits, downsides, and rules around who can open an account. For investors trying to decide which IRA to open, it helps to know the differences between SIMPLE IRAs and Traditional IRAs.

SIMPLE IRA vs Traditional IRA: Side-by-Side Comparison

Although there are many similarities between the two accounts, there are some key differences. This chart details the key attributes of each plan:

	SIMPLE IRA	Traditional IRA
Offered by employers	Yes	No
Who it’s for	Small-business owners and their employees	Individuals
Eligibility	Earn at least $5,000 per year	No age limit; must have earned income in the past year
Tax deferred	Yes	Yes
Tax deductible contributions	Yes, for employers and sole proprietors only	Yes
Employer contribution	Required	No
Fee for early withdrawal	10% plus income tax, or 25% if money is withdrawn within two years of an employer making a deposit	10% plus income tax
Contribution limits	$16,500 in 2025 $17,000 in 2026	$7,000 in 2025 $7,500 in 2026
Catch-up contribution	$3,500 additional per year for people 50 and over in 2025 $4,000 additional per year for those 50 and older in 2026 $5,250 additional per year for those aged 60 to 63 in both 2025 and 2026, thanks to SECURE 2.0	$1,000 additional per year in 2025 for people 50 and over $1,100 additional per year in 2026 for those 50 and older

SIMPLE IRAs Explained

The SIMPLE IRA, which stands for Savings Incentive Match Plan for Employees, is set up to help small-business owners help both themselves and their employees save for retirement. It’s a retirement plan that small businesses with fewer than 100 employees can offer employees who earn at least $5,000 per year.

A SIMPLE IRA is similar to a Traditional IRA, in that a plan participant can make tax-deferred contributions to their account, so that it grows over time with compound interest. When the individual retires and begins withdrawing money, then they must pay income taxes on the funds.

With a SIMPLE IRA, both the employer and the employee contribute to the employee’s account. Employers are required to contribute in one of two ways: either by matching employee contributions up to 3% of their salary, or by contributing a flat rate of 2% of the employee’s salary, even if the employee doesn’t contribute. With the matching option, the employee must contribute money first.

There are yearly employee contribution limits to a SIMPLE IRA: In 2025, the annual limit is $16,500, with an additional $3,500 in catch-up contributions permitted for people age 50 and older, and an additional $5,250 for those ages 60 to 63, thanks to SECURE 2.0.

In 2026 the annual limit is $17,000, with an additional $4,000 in catch-up contributions permitted for people age 50 and older, and an additional $5,250 for those ages 60 to 63.

Benefits and Drawbacks of SIMPLE IRAs

It’s important to understand both the benefits and downsides of the SIMPLE IRA to make an informed decision about retirement plans.

SIMPLE IRA Benefits

There are several benefits — for both employers and employees — to choosing a SIMPLE IRA:

• For employers, it’s easy to set up and manage, with online set-up available through most banks.

• For employers, management costs are low compared to other retirement plans.

• For employees, taxes on contributions are deferred until the money is withdrawn.

• Employers can take tax deductions on contributions. Sole proprietors can deduct both salary and matching contributions.

• For employees, there is an allowable catch-up contribution for those over 50.

• For employers, the IRA plan providers send tax information to the IRS, so there is no need to do any reporting.

• Employers and employees can choose how the money in the account gets invested based on what the plan offers. Options may include mutual funds aimed toward growth or income, international mutual funds, or other assets.

SIMPLE IRA Drawbacks

Although there are multiple benefits to a SIMPLE IRA, there are some downsides as well:

• Employers must follow strict rules set by the IRS.

• Other employer-sponsored retirement accounts have higher limits, such as the 401(k), which allows for $23,500 per year in 2025 and $24,500 in 2026. (Check out our IRA calculator to see what you can contribute to each type of IRA.)

• If account holders withdraw money before they reach age 59 ½, they must pay a 10% fee and income taxes on the withdrawal. That penalty jumps to 25% if money is withdrawn within two years of an employer making a deposit.

• There is no option for a Roth contribution to a SIMPLE IRA, which would allow account holders to contribute post-tax money and avoid paying taxes later.

What Is a Traditional IRA?

The Traditional IRA is set up by an individual to contribute to their own retirement. Employers are not involved in Traditional IRAs in any way. The main requirements to open an IRA are that the account holder must have earned some income within the past year, and they must be younger than 70 ½ years old at the end of the year.

Pros and Cons of Traditional IRAs

When it comes to benefits and downsides, there’s not too much of a difference between Traditional vs. SIMPLE IRAs, given what an IRA is. That being said, there are a few that are unique to this type of plan.

Traditional IRA Pros

Some of the upsides of a Traditional IRA include:

• It allows for catch-up contributions for those over age 50.

• One can choose how the money in the account gets invested based on what the plan offers. Options may include mutual funds aimed toward growth or income, international mutual funds, or other assets.

• Contributions are tax-deferred, so taxes aren’t paid until funds are withdrawn. If you’re hoping to pay taxes now instead of later, you might weigh a Traditional vs. Roth IRA.

Traditional IRA Cons

Meanwhile, downsides to a Traditional IRA include:

• They have much lower contribution limits than a 401(k) or a SIMPLE IRA, at $ $7,000 in 2025, and $7,500 in 2026.

• Penalties for early withdrawal are also the same: if you withdraw money before age 59 ½, you’ll pay a 10% fee plus income taxes on the withdrawal.

Is a SIMPLE IRA or Traditional IRA Right for You?

The SIMPLE IRA and Traditional IRA are both individual retirement accounts, but the SIMPLE is set up through one’s employer — typically a small business of 100 people or less. The Traditional IRA is set up by an individual. In other words, whether a SIMPLE IRA is an option for you will depend on if you have an employer that offers it.

There are many similarities in the attributes of the plans, if you’re choosing between a SIMPLE IRA vs. Traditional IRA. However, two major distinctions are that the SIMPLE IRA requires employer contributions (though not necessarily employee contributions) and allows for a higher amount of employee contributions per year.

Can I Have Both a SIMPLE IRA and a Traditional IRA?

Yes, it is possible for an individual to have both a SIMPLE IRA through their employer and also a Traditional IRA on their own — though they may not be able to deduct all of their Traditional IRA contributions. The IRS sets a cap on deductions per calendar year.

In 2025, single people covered by an employer-sponsored retirement plan at work who have a MAGI (modified adjusted gross income) of more than $79,000 are restricted to a partial deduction; those with a MAGI of $89,000 or more may not take a deduction at all. Those with an employer-sponsored plan at work who are married filing jointly with an MAGI of more than $126,000 but less than $146,000 may take a partial deduction; those with a MAGI of $146,000 or more may not take a deduction at all.

In 2026, single people covered by an employer-sponsored retirement plan at work who have a MAGI of more than $81,000 and less than $91,000 are restricted to a partial deduction; those with a MAGI of $91,000 or more may not take a deduction at all. Those who are covered by an employer-sponsored retirement plan at work and are married filing jointly with a MAGI of more than $129,000 and less than $149,000 may take a partial deduction; those with a MAGI of $149,000 or more may not take a deduction at all.

Can You Convert a SIMPLE IRA to a Traditional IRA?

If you’re hoping to convert a SIMPLE IRA to a Traditional IRA, you’re in luck — you can roll over a SIMPLE IRA into a Traditional IRA. However, you can’t roll over the funds from a SIMPLE IRA to a Traditional IRA within the first two years of opening a SIMPLE IRA. Otherwise, you’ll get hit with a 25% penalty in addition to the regular income tax you must pay on your withdrawal.

Once that two-year period is up, however, you can roll over the money from your SIMPLE IRA — even if you’re still working for that employer. Just note that you can only roll over money from a SIMPLE IRA one time within a 12-month period.

Can You Max Out a Traditional and SIMPLE IRA the Same Year?

While you cannot max out a SIMPLE IRA and another employer-sponsored retirement plan like a 401(k), you can max out both a Traditional IRA and a SIMPLE IRA.

The maximum contribution for a SIMPLE IRA in 2025 is $16,500 (plus $3,500 in catch-up contributions), while the maximum for a Traditional IRA is $7,000 (plus $1,000 in catch-up contributions). This means that you could contribute a total of $23,500 across both plans in a year — or $28,000 if you’re 50 or older.

The maximum contribution for a SIMPLE IRA in 2026 is $17,000 (plus $4,000 in catch-up contributions), while the maximum for a Traditional IRA is $7,500 (plus $1,100 in catch-up contributions). This means that you could contribute a total of $24,500 across both plans for the year — or $29,600 if you’re 50 or older.

Are SIMPLE IRAs Most Similar to 401(k) Plans?

There are a lot of similarities between SIMPLE IRAs and 401(k) plans given that they are both employer-sponsored retirement plans. However, while any employer with one or more employees can offer a 401(k), SIMPLE IRAs are reserved for employers with 100 or fewer employees. Additionally, contribution limits are lower with SIMPLE IRAs than with 401(k) plans.

Another key difference between the two is that while employers can opt whether or not to make contributions to employee 401(k), employer contributions are mandatory with SIMPLE IRAs. On the employer side, SIMPLE IRAs generally have fewer account fees and annual tax filing requirements.

Opening an IRA With SoFi

Understanding the differences between retirement accounts like the SIMPLE and Traditional IRA is one more step in creating a personalized retirement plan that works for you and your goals. While a SIMPLE IRA is only an option if your employer offers it, you’ll want to weigh the pros and cons of a SIMPLE IRA vs. Traditional IRA if both are on the table for you. As we’ve covered, the two types of IRAs share many similarities, but a SIMPLE IRA is not the same as a Traditional IRA.

If you’re looking to start saving for retirement now, or add to your investments for the future, SoFi Invest® online retirement accounts offer both Traditional and Roth IRAs that are simple to set up and manage. By opening an IRA with SoFi, you’ll gain access to a broad range of investment options, member services, and a robust suite of planning and investment tools.

Find out how to further your retirement savings goals with SoFi Invest.

FAQ

Do you pay taxes on SIMPLE IRA?

Yes, you will pay taxes on a SIMPLE IRA, but not until you withdraw your funds in retirement. You’ll generally have to pay income tax on any amount you withdraw from your SIMPLE IRA in retirement. However, if you make a withdrawal prior to age 59 ½, or if money is withdrawn within two years of an employer making a deposit, you’ll have to pay income taxes then, alongside an additional tax penalty.

Is a SIMPLE IRA better than a Traditional IRA?

When comparing a SIMPLE IRA vs. traditional IRA, it’s important to understand that each has its pros and cons. If your employer offers a SIMPLE IRA, they require employer contributions, and they have higher contributions. At the end of the day, though, both allow you to save for retirement through tax-deferred contributions.

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

Dec

2025

How Much Money Should I Have Saved by 30?

By Pam O’Brien | Budgeting & Goals, Growing Wealth, invest, Investing | No Comments

As you near 30, you probably have lots of different financial goals. Maybe you’re planning to buy a house. Or perhaps you’re considering starting a family. And while retirement may seem a long way off, it’s never too early to start saving and planning for your future.

You might know you want to save money for all these different things, but you don’t know exactly how much you should be saving. Chances are, you may have been wondering, how much money should I have saved by 30?

The good news is, money you save now can add up. And if you invest that money in a retirement account or an investment portfolio, you can get longer-term growth on your money.

First, though, it helps to know how much you should be saving by age 30 to see if you’re on track. Learn how much you should have saved — plus tips to help you reach your savings goals.

Average/Median Savings by Age 30

The average savings for individuals by age 30 is approximately $20,540, and their median savings is $5,400, according to the Federal Reserve’s most recent Survey of Consumer Finances. It’s important to note that the Fed’s survey doesn’t look specifically at people who are age 30. Instead, it divides them into groups, including 25 to 34 year olds.

These savings amounts are in what the Fed calls “Transaction Accounts.” This includes checking and savings accounts and money market accounts.

How Much Should a 30-Year-Old Have in Savings?

If you’re still asking yourself, how much money should I have saved by 30?, know this: By age 30, you should have the equivalent of your annual salary in savings, according to one rule of thumb. That means if you’re earning $54,000 a year, you should have $54,000 saved.

This number — $54,000 — is based on the average annual salary for those 25 to 34 years old, which is $54,080, according to 2023 data from the Bureau of Labor Statistics.

Strategies to Help You Reach Your Savings Goals by 30

If you don’t have $54,000 saved by age 30, you can still catch up and reach your financial goals.

Here are some techniques that can help you get there.

Set Up an Emergency Fund

Having an emergency savings fund to pay for sudden expenses is vital. That way you’ll have money to pay for emergencies like unexpected medical bills or to help cover your expenses if you lose your job, rather than having to resort to using a credit card or taking out a loan. Put three to six months’ worth of expenses in your emergency fund and keep the money in a savings account where you can quickly and easily access it if you need it.

Pay Down Debt

Debt, especially high-interest debt like credit card debt, can drain your income so that you don’t have much, if anything, left to put in savings. Make a plan to pay it off.

For example, you might want to try the debt avalanche method. List your debts in order of those with the highest interest to those with the lowest interest. Then, make extra payments on your debt with the highest interest, while paying at least the minimum payments on all your other debts. Once you pay the highest interest debt off, move on to the debt with the second highest interest rate and continue the pattern.

With the debt avalanche technique, you eliminate your most expensive debts first, which can help you save money. You may also get debt-free sooner because, as you pay the debt off, less interest accumulates each month.

If the avalanche method isn’t right for you, you could try the debt snowball method, in which you pay off the smallest debts first and work your way up to the largest, or the fireball method, which is a combination of the avalanche and snowball methods.

Start Investing

Retirement probably feels like a long way off for you. But the sooner you can start saving for retirement, the better, since it will give your savings time to grow.

If you have access to a 401(k) plan at work, take advantage of it. Once you open an account, the money will be automatically deducted from your paycheck each pay period, which can make it easier to save since you don’t have to think about it.

If your employer doesn’t offer a 401(k), or even if they do and you want to save even more for retirement, consider opening an IRA account. There are two types of IRAs to choose from: a traditional IRA and a Roth IRA. At this point in your life, when you’re likely to be earning less than you will be later on, a Roth IRA might be a good choice because you pay the taxes on it now, when your income is lower. And in retirement, you withdraw your money tax-free.

However, if you expect that your income will be less in retirement than it is now, a traditional IRA is typically your best choice. You’ll get the tax break now, in the year you open the account, and pay taxes on the money you withdraw in retirement, when you expect to be in a lower tax bracket.

Contribute the full amount to your IRA if you can. In tax year 2025, those under age 50 can contribute up to $7,000 a year, and in tax year 2026, they can contribute up to $7,500 a year.

Take Advantage of 401(k) Matching

When choosing how much to contribute to your 401(k), be sure to contribute at least enough to get your employer’s matching funds if such a benefit is offered by your company.

An employer match is, essentially, free money that can help you grow your retirement savings even more. With an employer match, an employer contributes a certain amount to their employees’ 401(k) plans. The match may be based on a percentage of an employee’s contribution up to a certain portion of their total salary, or it may be a set dollar amount, depending on the plan.

Save More as Your Salary Increases

When you get a raise, instead of using that extra money to buy more things, put it into savings instead. That will help you reach your financial goals faster and avoid the kind of lifestyle creep in which your spending outpaces your earnings.

Though it’s tempting to celebrate a pay raise by buying a fancier car or taking an expensive vacation, consider the fact that you’ll have a bigger car payment to make every month moving forward, which can result in even more spending, or that you may be paying off high interest credit card debt that you used to finance your vacation fun.

Instead, make your celebration a little smaller, like dinner with a few best friends, and put the rest of the money into a savings or investment account for your future.

The Takeaway

By age 30, you should have saved the equivalent of your annual salary, according to a popular rule of thumb. For the average 30 year old, that works out to about $54,000.

But don’t fret if you haven’t saved that much. It’s not too late to start. By taking such steps as paying down high-interest debt, creating an emergency fund, saving more from your salary, and saving for retirement with a 401(k), IRA, or other investment account, you still have time to reach your financial goals.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Invest with as little as $5 with a SoFi Active Investing account.

FAQ

Is $50k saved at 30 good?

Yes, saving $50,000 by age 30 is quite good. According to one rule of thumb, you should save the equivalent of your annual salary by age 30. The latest data from the Bureau of Labor Statistics shows that the annual average salary of a 30 year-old is approximately $54,080. So you are basically on target with your savings.

Plus, when you consider the fact that the average individual’s savings by age 30 is approximately $20,540, according to the Federal Reserve’s most recent Survey of Consumer Finances, you are ahead of many of your peers.

Is $100k savings good for a 30 year old?

Yes, $100,000 in savings for a 30 year old is good. It’s almost double the amount recommended by a popular rule of thumb, which is to save about $54,000, or the equivalent of the average annual salary of a 30 year old, based on data from the Bureau of Labor Statistics.

Where should I be financially at 35?

By age 35, you should save more than three times your annual salary, according to conventional wisdom. The average salary of those ages 35 to 44 is $65,676, according to the Bureau of Labor Statistics. That means by 35 you should have saved approximately $197,000.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

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CN-Q425-3236452-37

Dec

2025

Backdoor Roth IRAs

By Pam O’Brien | Growing Wealth, invest, Investing, Preparing for Retirement, Terminology | No Comments

Want to contribute to a Roth IRA, but have an income that exceeds the limits? There’s another option. It’s called a backdoor Roth IRA, and it’s a way of converting funds from a traditional IRA to a Roth.

A Roth IRA is an individual retirement account that may provide investors with a tax-free income once they reach retirement. With a Roth IRA, investors save after-tax dollars, and their money generally grows tax-free. Roth IRAs also provide additional flexibility for withdrawals — once the account has been open for five years, contributions can generally be withdrawn without penalty.

But there’s a catch: Investors can only contribute to a Roth IRA if their income falls below a specific limit. If your income is too high for a Roth, you may want to consider a backdoor Roth IRA.

Key Points

• A backdoor Roth IRA allows high earners to contribute to a Roth IRA by converting funds from a traditional IRA.

• This strategy involves paying income taxes on pre-tax contributions and earnings at conversion.

• There are no income limits or caps on the amount that can be converted to a Roth IRA.

• The process includes opening a traditional IRA, making non-deductible contributions, and then converting these to a Roth IRA.

• Potential tax implications include moving into a higher tax bracket and owing taxes on pre-tax contributions and earnings.

What Is a Backdoor Roth IRA?

If you aren’t eligible to contribute to a Roth IRA outright because you make too much, you can do so through a technique called a “backdoor Roth IRA.” This strategy involves contributing money to a traditional IRA and then converting it to a Roth IRA.

The government allows individuals to do this as long as, when they convert the account, they pay income tax on any contributions they previously deducted and any profits made. Unlike a standard Roth IRA, there is no income limit for doing the Roth conversion, nor is there a ceiling to how much can be converted.

💡 Quick Tip: How much does it cost to open an IRA account? Often there are no fees to open an IRA, but you typically pay investment costs for the securities in your portfolio.

How Does a Backdoor IRA Work?

This is how a backdoor IRA typically works: An individual opens a traditional IRA and makes non-deductible contributions. They then convert the account into a Roth IRA. The strategy is generally most helpful to those who earn a higher salary and are otherwise ineligible to contribute to a Roth IRA.

Example Scenario

For instance, let’s say a 34-year-old individual wants to open a Roth IRA. Their tax-filing status is single and they earn $168,000 per year. Their income is too high for them to be eligible for a Roth directly (more on this below), but they can use the “backdoor IRA” strategy.

Income and Contribution Limits

In general, Roth IRAs have income limits. In 2025, a single person whose modified adjusted gross income (MAGI) is $165,000 or more, or a married couple filing jointly with a MAGI that is $246,000 or more, cannot contribute to a Roth IRA.

For tax year 2026, a single filer whose MAGI is $168,000 or more, or a married couple filing jointly with a MAGI that is $252,000 or more, cannot contribute to a Roth IRA.

There are also annual contribution limits for Roth IRAs. For tax year 2025, the annual contribution limit for traditional and Roth IRAs is $7,000. These IRAs allow for a catch-up contribution of up to $1,000 per year if you’re 50 or older. For tax year 2026, the annual contribution limit is $7,500, with a catch-up limit of $1,100 for those 50 and older.

How to Set Up and Execute a Backdoor Roth

Here’s how to initiate and complete a backdoor Roth IRA.

• Open a Traditional IRA. You could do this with SoFi Invest^®, for instance.

• Make a non-deductible contribution to the Traditional IRA.

• Open a Roth IRA, complete any paperwork that may be required for the conversion, and transfer the money into the Roth IRA.

Tax Impact of a Backdoor Roth

If you made non-deductible contributions to a traditional IRA that you then converted to a Roth IRA, you won’t owe taxes on the money because you’ve already paid taxes on it. However, if you made deductible contributions, you will need to pay taxes on the funds.

In addition, if some time elapsed between contributing to the traditional IRA and converting the money to a Roth IRA, and the contribution earned a profit, you will owe taxes on those earnings.

You might also owe state taxes on a Roth IRA conversion. Be sure to check the tax rules in your area.

Another thing to be aware of: A conversion can also move people into a higher tax bracket, so individuals may consider waiting to do a conversion when their income is lower than usual.

And finally, if an investor already has traditional IRAs, it may create a situation where the tax consequences outweigh the benefits. If an individual has money deducted in any IRA account, including SEP or SIMPLE IRAs, the government will assume a Roth conversion represents a portion or ratio of all the balances. For example, say the individual contributed $5,000 to an IRA that didn’t deduct and another $5,000 to an account that did deduct. If they converted $5,000 to a Roth IRA, the government would consider half of that conversion, or $2,500, taxable.

The tax rules involved with converting an IRA can be complicated. You may want to consult a tax professional.

Is a Backdoor Roth Right for Me?

It depends on your situation. Below are some of the benefits and downsides to a backdoor Roth IRA to help you determine if this strategy might be a good option for you.

Benefits

High earners who don’t qualify to contribute under current Roth IRA rules may opt for a backdoor Roth IRA.

As with a typical Roth IRA, a backdoor Roth may also be a good option when an investor expects their taxes to be lower now than in retirement. Investors who hope to avoid required minimum distributions (RMDs) when they reach age 73 might also consider doing a backdoor Roth.

Downsides

If an individual is eligible to contribute to a Roth IRA, it won’t make sense for them to do a backdoor conversion.

And because a conversion can also move people into a higher tax bracket, you may consider waiting to do a conversion in a year when your income is lower than usual.

For those individuals who already have traditional IRAs, the tax consequences of a backdoor Roth IRA might outweigh the benefits.

Finally, if you plan to use the converted funds within five years, a backdoor Roth may not be the best option. That’s because withdrawals before five years are subject to income tax and a 10% penalty.

s a Backdoor Roth Still Allowed in 2025 or 2026?

Backdoor Roth conversions are still allowed for tax years 2025 and 2026.

There had been some discussion in previous years of possibly eliminating the backdoor Roth strategy, but this has not happened as yet.

The Takeaway

A backdoor Roth IRA may be worth considering if tax-free income during retirement is part of an investor’s financial plan, and the individual earns too much to contribute directly to a Roth.

In general, Roth IRAs may be a good option for younger investors who have low tax rates and people with a high income looking to reduce tax bills in retirement.

Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Help grow your nest egg with a SoFi IRA.

FAQ

What are the rules of a backdoor Roth IRA?

The rules of a backdoor Roth IRA include paying taxes on any deductible contributions you make; paying any other taxes you may owe for the conversion, such as state taxes; and waiting five years before withdrawing any earnings from the Roth IRA to avoid paying a penalty.

Is it worth it to do a backdoor Roth IRA?

It depends on your specific situation. A backdoor Roth IRA may be beneficial if you earn too much to contribute to a Roth IRA. It may also be advantageous for those who expect to be in a higher tax bracket in retirement.

What is the 5-year rule for backdoor Roth IRA?

According to the 5-year rule, if you withdraw money from a Roth IRA before the account has been open for at least five years, you are typically subject to a 10% tax on those funds. The five year period begins in the tax year in which you made the backdoor Roth conversion. There are some possible exceptions to this rule, however, including being 59 ½ or older or disabled.

Do you get taxed twice on backdoor Roth?

No. You pay taxes once on a backdoor IRA — when you convert a traditional IRA with deductible contributions and any earnings to a Roth. When you withdraw money from your Roth in retirement, the withdrawals are tax-free because you’ve already paid the taxes.

Can you avoid taxes on a Roth backdoor?

There is no way to avoid paying taxes on a Roth backdoor. However, you may be able to reduce the amount of tax you owe by doing the conversion in a year in which your income is lower.

Can you convert more than $6,000 in a backdoor Roth?

There is no limit to the amount you can convert in a backdoor Roth IRA. The annual contribution limits for IRAs does not apply to conversions. But you may want to split your conversions over several years to help reduce your tax liability.

What time of year should you do a backdoor Roth?

There is no time limit on when you can do a backdoor Roth IRA. However, if you do a backdoor Roth earlier in the year, it could give you more time to come up with any money you need to pay in taxes.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

Dec

2025

Why You Should Start Retirement Planning in Your 20s

By Austin Kilham | invest, Investing, Preparing for Retirement | Comments Off

Table of Contents

Main Reason to Start Saving for Retirement Early
How to Start Saving for Retirement in Your 20s
Types of Retirement Plans
Investing in Multiple Accounts
Retirement Plan Strategies
FAQ

When you’re in your 20s, retirement may be the last thing on your mind. But thinking about retirement now can help ensure your financial security in the future.

The longer you have to save for retirement, the better. Here’s why you should start retirement planning and investing in your 20s.

Key Points

• Starting retirement planning in their 20s allows individuals more time to build savings and benefit from compound returns.

• Compound returns may help early savers grow their money exponentially over a longer period.

• Calculate retirement savings goals and choose suitable savings vehicles, such as a 401(k), traditional IRA, or Roth IRA.

• Young investors with a long time horizon can generally afford a more aggressive portfolio than older investors.

• As retirement approaches, individuals can shift investments to less risky assets to help protect savings.

Main Reason to Start Saving for Retirement Early

When you start investing in your 20s, even if you begin with just a small amount, you have more time to build your nest egg. Typically, having a long time horizon means you have time to weather the ups and downs of the markets.

What’s more — and this is critical — the earlier you start investing, the more time you have to take advantage of the power of compound returns, which can help your investment grow over time.

Here’s how compound returns work: If the money you invest sees a return, and that profit is reinvested, you earn money not only on your original investment, but also on the returns. In other words, both your principal and your earnings could gain value over time. And the more time you have to invest, the more time your returns may compound.

Compound Returns Example

Imagine you are 25 with plans to retire at 65. That gives you 40 years to save up your nest egg. Now, let’s say you invest $5,000 in a mutual fund in your retirement account, and the fund has an annual rate of return of 5%. After a year you would have $5,250, including $250 of earnings (minus any investment or account fees). The following year, assuming the same rate of return, you would have $5,512.50, including $262.50 of earnings on the $5,250.

While there are no guarantees that the money would continue to gain 5% every year — investments involve risk and can lose money — historically, the average return of the S&P 500 is about 10% per year, or about 7% adjusted for inflation.

That might mean you earn 3% one year and 8% another year, and so on. But over time your principal would likely continue to grow, and the earnings on that principal would also grow. Imagine that playing out over 40 years and you can see why it’s important to start investing early for your retirement.

💡 Quick Tip: Before opening an investment account, know your investment objectives, time horizon, and risk tolerance. These fundamentals will help keep your strategy on track and with the aim of meeting your goals.

How to Start Saving for Retirement in Your 20s

If you’re new to saving, starting a retirement fund requires a little bit of planning.

Step 1: Calculate how much you need to save

Set a goal. Consider your target retirement date and how long you’ll expect to be retired based on current life expectancy. What kind of lifestyle do you want to lead? And what do you expect your retirement expenses to be?

Step 2: Choose an investment vehicle

When it comes to where to put your savings, you have a number of options. For example, you can participate in your workplace 401(k) if you have one. You could also open an individual retirement account (IRA). Read more about both these options and how they work below.

Many retirement savers also opt to use an investing account, such as a taxable brokerage account.

Keep in mind that investments in stocks or other securities involve risk, but they may allow for the possibility of better returns. Young investors may be better positioned than older investors to take on additional risk, since they have time to recover after a market decline. However, the amount of risk you’re willing to take on is an important consideration and a personal choice.

Step 3: Start investing

Once you’ve opened an account, your investment strategy depends on age, goals, time horizon and risk tolerance. For example, the longer you have before you retire, the more money you might consider investing in riskier assets such as stock, since you’ll have longer to ride out any rocky period in the market. As retirement approaches, you may want to re-allocate more of your portfolio to typically less risky assets, such as bonds.

Types of Retirement Plans

If you’re interested in opening a tax-advantaged retirement plan, there are three main account types to consider: 401(k)s, traditional IRAs, and Roth IRAs.

401(k)

A 401(k) plan is an employer sponsored retirement account that you invest in through your workplace, if your employer offers it. You make contributions to 401(k)s with pre-tax funds (meaning contributions lower your taxable income), usually deducted from your paycheck. Your 401(k) will typically offer a relatively small menu of investments from which you can choose.

Employers may also contribute to your 401(k) and often offer matching contributions. Consider saving enough money to at least meet your employer’s match, which is essentially free money and an important part of your total compensation.

Some companies also offer a Roth 401(k), which uses after-tax paycheck deferrals.

Individuals under age 50 can contribute up to $23,500 in their 401(k) in 2025. Those age 50 and up can make an additional catch-up contribution of up to $7,500. In 2026, those under age 50 can contribute up to $24,500 in their 401(k), and those 50 and older can contribute an additional catch-up contribution of up to $8,000. And thanks to SECURE 2.0, in both 2025 and 2026, individuals ages 60 to 63 can make a higher catch-up contribution of up to $11,250 instead of $7,500 for 2025 and $8,000 for 2026.

Money invested inside a 401(k) grows tax-deferred, and you’ll pay regular income tax on withdrawals that you make after age 59 ½. If you take out money before then, you could owe both income taxes and a 10% early withdrawal penalty.

You must begin making required minimum distributions (RMDs) from your account by age 73.

Traditional IRA

Traditional IRAs are not offered through employers. Anyone can open one as long as they have earned income. Depending on your income and access to other retirement savings accounts, you may be able to deduct contributions to a traditional IRA on your taxes.

As with 401(k) contributions, you will owe taxes on traditional IRA withdrawals after age 59 ½ and you may have to pay taxes and a penalty on early withdrawals.

In 2025, traditional IRA contribution limits are $7,000 a year or $8,000 for those age 50 and up. In 2026, contribution limits are $7,500 a year, or $8,600 for those age 50 and older. Compared to 401(k)s, IRAs typically offer individuals the ability to invest in a broader range of investments. These investments can then grow tax-deferred inside the account. Traditional IRAs are also subject to RMDs typically starting at age 73.

Roth IRA

Unlike 401(k)s and traditional IRAs, contributions to Roth IRAs are made with after-tax dollars. While they provide no immediate tax benefit, the money inside the account grows tax-free and it isn’t subject to income tax when withdrawals are made after age 59 ½.

You can also withdraw your contributions (but not the earnings) from a Roth at any time without a tax penalty as long as the Roth has been open for at least five tax years. The first tax year begins on January 1 of the year the first contribution was made and ends on the tax filing deadline of the next year, such as April 15. Any contribution made during that time counts as being made in the prior year.

So, for instance, if you made your first contribution on April 10, 2025, it counts as though it were made at the beginning of 2024. Therefore, your Roth would be considered open for five tax years in January 2029.

Roth IRAs are not subject to RMD rules. Contribution limits are the same as traditional IRAs.

Investing in Multiple Accounts

Individuals can have both a traditional and Roth IRA. But it’s important to note that the contribution limits apply to total contributions across both. So if you’re 25 and put $3,500 in a traditional IRA in 2025, you could only put up to $3,500 in your Roth in that same year.

You can also contribute to both a 401(k) and an IRA, however if you have access to a 401(k) at work (or your spouse does) you may not be able to deduct all or any of your IRA contributions, based on your modified adjusted gross income and tax filing status.

Retirement Plan Strategies

The investment strategy you choose will depend largely on three things: your goals, time horizon, and risk tolerance. These factors will help you determine your asset allocation — what types of assets you hold and in what proportion. Your retirement portfolio as a 20-something investor will likely look very different from a retirement portfolio of a 50-something investor.

For example, those with a high risk tolerance and long time horizon might hold a greater portion of stocks. This asset class is typically more volatile than bonds, but it also provides greater potential for growth.

Generally speaking, the shorter a person’s time horizon and the less risk tolerance they have, the greater proportion of bonds they may want to include in their portfolio. Here’s a look at some portfolio strategies and the asset allocation that might accompany them:

Sample Portfolio Style	Asset allocation
Aggressive	85% stocks, 15% bonds
Moderately Aggressive	80% stocks, 20% bonds
Moderate	60% stocks, 40% bonds
Moderately Conservative	30% stocks, 70% bonds
Conservative	20% stocks, 80% bonds

The Takeaway

Even if you don’t have a lot of room in your budget in your 20s to start investing, putting away as much as you can as early as you can, can go a long way toward helping you save for retirement. As you start to earn a bigger salary, you can increase the amount of money you save over time.

Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Help build your nest egg with a SoFi IRA.

FAQ

How much should a 25 year old have in a 401(k)?

There is no one specific amount a 25-year-old should have in their 401(k), but a common guideline suggests having about half your annual salary saved by age 25. So if you earn $30,000 a year, you’d aim to save approximately $15,000 by age 25, using this benchmark.

At what age should you have $50,000 saved?

You should aim to have saved $50,000 by about age 30. Here’s why: According to one rule of thumb, you should have the equivalent of one year’s salary saved by age 30. The average salary for individuals ages 25 to 34 is approximately $59,000, according to the latest data from the Bureau of Labor Statistics. So if you save $50,000 by around age 30, you are more or less in line with that target.

Is 26 too late to start saving for retirement?

No, age 26 is not too late to start saving for retirement. In fact, it’s never too late to start saving, but the sooner you start, the better. The earlier you start putting money away for retirement, the more time your money has to grow.

Photo credit: iStock/izusek

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q325-094
CN-Q425-3236452-46

Dec

2025

Guide to Self-Directed IRAs (SDIRA)

By Austin Kilham | Growing Wealth, invest, Investing | Comments Off

Table of Contents

What Is a Self-Directed IRA (SDIRA)?
How Do Self-Directed IRAs Work?
Pros and Cons of Self-Directed IRAs
4 Steps to Opening a Self-Directed IRA
FAQ

A self-directed IRA, or SDIRA, is a type of individual retirement account that allows the account holder to invest in securities other than stocks, bonds, and mutual funds: e.g., real estate, private equity, precious metals, and other alternative assets.

Nonetheless, self-directed IRAs are still subject to basic IRA rules, like annual contribution limits and withdrawal restrictions. SDIRAs are available as regular tax-deferred IRAs as well as Roth IRAs.

The main difference is that a custodian administers a self-directed IRA, but the account holder manages their investments and assumes the risk in doing so.

Key Points

• A self-directed IRA (SDIRA) allows individuals to buy, sell, and hold alternative assets, including real estate, cryptocurrency, and precious metals, which conventional IRAs don’t permit.

• Nonetheless, SDIRAs are subject to ordinary IRA withdrawal rules, tax structures, and annual contribution limits.

• Account holders of SDIRAs research and manage their investments independently, thus increasing their responsibility and potential risk exposure.

• While SDIRAs may offer potential returns, they also carry higher fees and risks, particularly due to the illiquidity of many alternative investments.

• Opening a SDIRA requires finding an approved custodian, selecting investments, completing transactions through a reputable dealer, and planning for less liquid transactions.

What Is a Self-Directed IRA (SDIRA)?

Self-directed IRAs and self-directed Roth IRAs allow account holders to buy and sell a wider variety of investments than regular traditional IRAs and Roth IRAs. Experienced investors who are familiar with sophisticated or risky investments may be more comfortable managing a SDIRA, compared with less experienced investors.

While a custodian or a trustee administers the SDIRA, the account holder typically manages the portfolio themselves, taking on the risk and responsibility for researching investments and due diligence. Because these accounts are not as heavily regulated, they may see a higher incidence of fraud.

These accounts may also come with higher fees than regular IRAs, which can cut into the size of the investor’s retirement nest egg over time.

What Assets Can You Put in a Self-Directed IRA or a Self-Directed Roth IRA?

Individuals can hold a number of unique alternative investments in their SDIRA, including but not limited to:

• Real estate and land

• Cryptocurrency

• Precious metals

• Mineral, oil, and gas rights

• Water rights

• LLC membership interest

• Tax liens

• Foreign currency

• Startups through crowdfunding platforms

Recommended: Types of Alternative Investments

Types of SDIRAs

There are specific kinds of SDIRAs customized for certain types of retirement savers looking for certain types of investments.

Self-directed SEP IRAs

Simplified Employee Pension IRAs (SEP IRAs) are for small business owners or those who are self-employed, and who can make contributions that are tax deductible for themselves and any eligible employees they might have. Using a self-directed SEP IRA gives them the flexibility to invest in alternative investments.

Self-directed SIMPLE IRAs

A Savings Incentive Match Plan IRA (or SIMPLE IRA) is a tax-deferred retirement plan for employers and employees of small businesses. Both the employer and the employees can make contributions to this plan. It allows for some alternative kinds of investments.

Self-directed Precious Metal IRAs

Similarly, there are self-directed IRAs for those who would like to invest in precious metals like gold. However, be aware that some precious metal IRAs may charge higher fees than the market price for precious metals.

Recommended: SIMPLE IRA vs Traditional

How Do Self-Directed IRAs Work?

Aside from their ability to hold alternative investments, SDIRAs work much like their conventional IRA counterparts. SDIRAs are tax-advantaged retirement accounts, and they can come in two flavors: traditional SDIRAs and Roth SDIRAs. But investors learning toward an online IRA generally need to find a qualified custodian to set up a SDIRA.

Traditional IRA Contributions and Withdrawal Rules

IRA contributions to traditional accounts goes in before taxes, which reduces investors’ taxable income, lowering their income tax bill in the year they make the contribution. For 2025, individuals can contribute up to $7,000 in total across accounts. Those age 50 and up can make an extra $1,000 catch-up contribution for a total of $8,000. For 2026, individuals can contribute a total of up to $7,500 across accounts. Those age 50 and up can make an additional contribution of $1,100 for a total of $8,600. Investments inside the account grow tax-deferred.

It’s important to pay close attention to self-directed IRA rules, particularly rules for IRA withdrawals. Account holders who make withdrawals before age 59 ½ may owe taxes and a possible 10% early withdrawal penalty. Traditional SDIRA account holders must begin making required minimum distributions (RMDs) after age 73.

Roth IRA Contributions and Withdrawal Rules

Roth SDIRAs have the same contribution limits as traditional SDIRAs. However, retirement savers contribute to Roths with after-tax dollars. Investments inside the account grow tax-free, and withdrawals after age 59 ½ aren’t subject to income tax.

Roth accounts are also not subject to RMD rules. As long as an individual has had the account for at least five years (according to the five-year rule), they can withdraw Roth contributions at any time without penalty, though earnings may be subject to tax if withdrawn before age 59 ½.

There are also rules restricting who can contribute to a Roth IRA, based on their income. In 2025, Roth eligibility begins phasing out at $150,000 for single people, and $236,000 for people who are married and file their taxes jointly. In 2026, Roth eligibility starts to phase out at $153,000 for single filers, and $242,000 for for piople who are married and filing jointly.

Individuals can maintain both traditional and Roth IRA accounts, however, contribution limits are cumulative across accounts, and cannot exceed $7,000, or $8,000 for those 50 and over, in 2025, and $7,500 or $8,600 for those 50 and over, in 2026.

Pros and Cons of Self-Directed IRAs

Self-directed IRAs offer unique perks for the right investor. However, those interested must weigh those benefits against potential drawbacks.

Benefits of Self-Directed IRAs

• Tax advantages

As noted above, self-directed IRAs offer the same tax advantages as ordinary IRA accounts (along with the same rules and restrictions).

• Diversification

A SDIRA also allows investors to branch out into different types of investments to which they might otherwise not have access. This allows investors to seek out potentially higher returns and diversify their portfolios beyond the offerings in traditional IRAs.

Alternative investments have the potential to offer higher returns than investors might achieve with conventional stock market investments. However, these opportunities come at the price of higher risk.

• Potential risk management

Also, investors’ ability to hold a broader spectrum of investments that may help them manage risks, such as inflation risk or longevity risk (the chance an investor will run out of money before they die). For example, some SDIRAs allow investors to hold gold, a traditional hedge against inflation.

Drawbacks of Self-Directed IRAs

While there are some advantages to using SDIRAs, these must be weighed against their disadvantages.

• Liquidity

For starters, investments like stocks and shares of ETFs are highly liquid. Investors who need their money quickly can sell them in a relatively short period of time, usually a matter of days.

However, some of the investments available in SDIRAs are illiquid. For example, real estate and real assets like precious metals may take quite a bit of time to sell. Individuals who need to sell these assets quickly may find themselves in a situation in which they must accept less than they believe the asset is worth.

• Cost

SDIRAs may also carry higher fees. Individuals who hold regular IRA accounts may not have to pay management or investment fees. However, SDIRA holders may have to pay fees associated with holding the account and with the purchase and maintenance of certain assets.

• Risks

Finally, SDIRAs place a lot of responsibility in the hands of their account holders. Investors must research investments themselves and perform due diligence to make sure that whatever they’re buying is legitimate and matches their risk tolerance.

What’s more, investors must make sure the assets they hold meet IRS rules. Running afoul of these rules can be costly, in some cases causing investors to pay taxes and penalties.

Here’s a look at the pros and cons of SDIRAs at a glance:

Pros	Cons
Tax-advantaged growth. Contributions to traditional accounts are tax deductible. Investments grow tax-deferred in traditional accounts and tax-free in Roth accounts.	Not liquid. Selling alternative investments may be slow and difficult.
Same contribution limits as regular IRAs. In 2025, individuals can contribute up to $7,000 a year, or $8,000 for those age 50 and up; in 2026, they can contribute $7,500, or $8,600 for those age 50 and up.	Higher fees. Individuals may be on the hook for account fees and fees associated with alternative investments.
Potential for higher returns. Alternative investments may offer higher returns than those available in the stock market.	Increased responsibility. Investors must research investments carefully themselves and ensure they stay within rules for approved IRA investments.
Diversification. SDIRAs offer investors the ability to invest in assets beyond the stock and bond markets.	Higher risk. Alternative investments tend to be riskier than more traditional investments.

4 Steps to Opening a Self-Directed IRA

Investors who want to open an SDIRA will need to take the following steps:

1. Find a custodian or trustee.

This can be a bank, trust company, or another IRS-approved entity. You’ll need to follow their requirements for opening an IRA account. Some SDIRAs specialize in certain asset classes, so look for a custodian that allows you to invest in the asset classes in which you’re interested.

2. Choose investments.

Decide which investments you want to hold in your SDIRA. Perform necessary research and due diligence.

3. Complete the transaction.

Find a reputable dealer from which your custodian can purchase the assets, and ask them to complete the sale.

4. Plan withdrawals carefully.

Because alternative assets have less liquidity than other types of investments, you may need to plan sales well in advance of needing retirement income or meeting any required minimum distributions.

The Takeaway

There are advantages and disadvantages to self-directed IRAs. Benefits include the fact that you can make alternative types of investments you might not otherwise be able to. That could help you diversify your portfolio and potentially increase your returns.

If you’re opening your first IRA account, you’re likely best served with a traditional or Roth IRA. Because of the risk and responsibility involved in using an SDIRA, only experienced investors should consider these accounts.

Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Help build your nest egg with a SoFi IRA.

FAQ

Are self-directed IRAs a good idea?

However, there are drawbacks to SDIRAs, including higher risk because alternative investments tend to be riskier, and potentially higher fees for maintenance of investments in the plan and account fees. In addition, investors need to research the investments themselves and follow the IRS rules carefully to make sure they comply. Finally, many alternative investments are not liquid, which means they could take longer and be more difficult to sell.

Can you set up a self-directed IRA yourself?

To set up a self-directed IRA, find a custodian or trustee such as a bank or trust company to open an account, research and choose your investments, find a reputable dealer for the investments you’d like to make, and have your custodian complete the transactions.

How much money can you put in a self-directed IRA?

For tax year 2025, you can contribute up to $7,000 to a traditional or Roth self-directed IRA, plus an additional $1,000 if you’re 50 or older. For tax year 2026, you can contribute up to $7,500, or $8,600 if you are 50 or older.

Photo credit: iStock/Andres Victorero

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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Mutual Funds (MFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or clicking the prospectus link on the fund's respective page at sofi.com. You may also contact customer service at: 1.855.456.7634. Please read the prospectus carefully prior to investing.Mutual Funds must be bought and sold at NAV (Net Asset Value); unless otherwise noted in the prospectus, trades are only done once per day after the markets close. Investment returns are subject to risk, include the risk of loss. Shares may be worth more or less their original value when redeemed. The diversification of a mutual fund will not protect against loss. A mutual fund may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. This and other important information are contained in the Fund’s prospectus. For a current prospectus, please click the Prospectus link on the Fund’s respective page. The prospectus should be read carefully prior to investing.
Alternative investments, including funds that invest in alternative investments, are risky and may not be suitable for all investors. Alternative investments often employ leveraging and other speculative practices that increase an investor's risk of loss to include complete loss of investment, often charge high fees, and can be highly illiquid and volatile. Alternative investments may lack diversification, involve complex tax structures and have delays in reporting important tax information. Registered and unregistered alternative investments are not subject to the same regulatory requirements as mutual funds.
Please note that Interval Funds are illiquid instruments, hence the ability to trade on your timeline may be restricted. Investors should review the fee schedule for Interval Funds via the prospectus.

CRYPTOCURRENCY AND OTHER DIGITAL ASSETS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

Cryptocurrency and other digital assets are highly speculative, involve significant risk, and may result in the complete loss of value. Cryptocurrency and other digital assets are not deposits, are not insured by the FDIC or SIPC, are not bank guaranteed, and may lose value.

All cryptocurrency transactions, once submitted to the blockchain, are final and irreversible. SoFi is not responsible for any failure or delay in processing a transaction resulting from factors beyond its reasonable control, including blockchain network congestion, protocol or network operations, or incorrect address information. Availability of specific digital assets, features, and services is subject to change and may be limited by applicable law and regulation.

SoFi Crypto products and services are offered by SoFi Bank, N.A., a national bank regulated by the Office of the Comptroller of the Currency. SoFi Bank does not provide investment, tax, or legal advice. Please refer to the SoFi Crypto account agreement for additional terms and conditions.

SOIN-Q325-097
CN-Q425-3236452-24