FutureMoney Review: Pros And Cons

FutureMoney is a new fintech that helps parents get their kids started early with savings and investing. 

As we all know, the sooner you start investing, the more money you’ll have. Just look at Warren Buffet as an example. He started investing when he was 11 years old. Over 90% of his wealth was generated after he turned 90 thanks to compound interest.

By starting early, kids can get a head start in building a nest egg for retirement. That’s the goal of FutureMoney, This review will dive into its platform. We'll let you know how it works, and whether or not it’s worth using to begin investing.

What Is FutureMoney?

Founded by financial industry veterans in January 2023, the Boston-based fintech aims to give parents peace of mind by providing them with a tool to help their kids work toward financial security. The platform offers managed portfolios and automated deposits to turn wealth building into a regular habit.

What Does It Offer?

Junior Roth IRA

The Junior Roth IRA is the primary investment vehicle FutureMoney offers. It isn’t an actual Roth IRA. Instead, it uses a 529 Plan that can be rolled over into a Roth IRA after 15 years.

Parents and kids can contribute up to $35,000 per child per year. Those funds grow tax-free and can become the foundation for future retirement savings.

According to one of the founders of FutureMoney, investing $10 a week for 18 years and then allowing the funds to grow for 50 years could result in a $1 million nest egg by the time a child enters retirement, assuming historical market rates of return.

The platform offers fully managed portfolios. You can choose a portfolio based on your financial goals or important issues like climate change or fighting poverty.

Are There Any Fees?

Subscription fees cover the option to open unlimited accounts, make contributions, transfer funds, reach out to customer support, and seek out tax optimization. Billed annually, the fee ranges from $0 to $48 per year.

Accounts that pay the monthly subscription do not pay a management fee.

For accounts of $20,000 or more, there is a 0.25% annual management fee. Because these accounts pay the management fee they aren’t assessed the monthly subscription fee.

How Does FutureMoney Compare?

It's important to note that FutureMoney is not a self-directed online brokerage. Account holders can invest in fully managed portfolios, but they don't have the option of buying individual stocks or exchange-traded funds (ETFs). 

Robinhood is an online brokerage offering a wide range of investments at a low cost. You can trade individual stocks and ETFs commission-free. Unfortunately, it does not offer a 529 Plan account option, only taxable brokerage accounts and IRAs (traditional and Roth). 

SoFi Invest is similar to Robinhood in that it offers a fully self-directed investing option with zero-commission stock trades. It also supports fractional shares. But while it also offers managed investing, like FutureMoney, it does not support 529 plans. 

How Do I Open An Account?

To open an account, download the app. You’ll be asked a few questions about your financial goals and to verify your identity. Accounts can be funded with as little as $1 and take a few minutes to open.

Is It Safe And Secure?

FutureMoney commits to providing strong security to keep users’ assets and information safe. That being said, it works with a number of third parties which can increase the vulnerabilities users are exposed to.

Brokerage services are provided in partnership with Atomic Brokerage. Atomic Brokerage facilitates the John Hancock Freedom 529 plan which is managed by T. Rowe Price. While Atomic Brokerage is backed by SIPC investments are not FDIC insured.

FutureMoney’s platform is managed in partnership with AtomicVest. AtomicVest collects and shares personal information with other parties. 

How Do I Contact FutureMoney?

Customer Service

FutureMoney has 4.7 stars on Google Play and 4.7 stars on the App Store. The app is too new to comment on customer service but the reviews given so far report a positive user experience and the app is easy to use.

Is It Worth It?

FutureMoney helps parents establish a savings habit with their kids. The use of a 529 plan – rather than a traditional custodial IRA – is a novel approach to saving for retirement over a long period of time. Account management fees are on par with similar investing platforms and the tiered subscription model makes FutureMoney accessible to low-income families.

Check out FutureMoney here >>

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