Acorns Later Review: Start Saving for Retirement With Only $5

Acorns Later is an IRA that helps you save for retirement with only $5. Acorns nudges you to contribute regularly, either through rounding up your change or recurring transfers. They even have sustainable or environmental, social, and governance investing options. If this sounds interesting, keep reading.

SustainFi   Updated February 7th, 2022

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  • Acorns Later lets you open a retirement account and start saving with only $5
  • Account type: Traditional, Roth, SEP, rollover IRAs
  • Minimum investment: $5
  • Membership fee: $3-$5 / month
  • Investments: diversified portfolios of stocks and bonds
  • Sustainable investing options


  • Spare change roundups
  • Recurring transfers
  • Start investing with only $5
  • One-stop shop with brokerage and banking options
  • Educational resources
  • Sustainable portfolios


  • Monthly fee may add up for small balances
  • No individual stocks

What is Acorns Later?

Acorns is a micro-investing app and robo-advisor that lets you save your spare change and invest. Acorns can round up your change to the nearest dollar and invest it, which helps you save without thinking too much about it. (An average user saves $30 a month.) You can also set up recurring transfers starting at $5.

Acorns Later is the Acorns retirement account product. You can set up an IRA with as little as $5, and Acorns will invest your savings in low-cost exchange-traded funds (ETFs) that meet your retirement goals. Sustainable or socially responsible investing options are also available.

In addition to retirement accounts, the Acorns app offers checking and investment accounts. You can also set up a custodial account for your child, earn stock back from retail partners, and access tons of educational content.

🔔 Read the full review of Acorns.

What is an IRA and should you open one?

IRAs, or individual retirement accounts, offer tax benefits to people who want to save for retirement. There are two main types of IRAs: traditional and Roth. Self-employed individuals can also explore SEP IRAs, which are less common.

Traditional IRAs

With a traditional IRA, you contribute money first and pay taxes later.

  • You can deduct your contributions on your annual tax return as your money grows tax-free
  • You pay income taxes when you withdraw the money in retirement, starting at age 59 ½
  • If you want to withdraw the money before age 59 ½, you will face a 10% penalty
  • Traditional IRAs are best for people who believe their income will go down in retirement, and they’ll pay less tax when they withdraw the money

Roth IRAs

When you contribute to a Roth IRA, you pay taxes upfront.

  • The account grows tax-free, and you don’t pay income taxes when you withdraw the money in retirement
  • Contributions to Roth IRAs aren’t tax-deductible
  • You can withdraw the principal without penalties before age 59 ½
  • A Roth IRA works best if you believe your income will go up in retirement

IRA contribution limits

Both Roth and traditional IRAs have contribution limits. As of 2022, you can contribute up to $6,000 per year. Those over 50 can contribute $1,000 more in catch-up contributions for a total of $7,000.

You can contribute to a traditional IRA no matter what your income is. However, Roth IRAs have income caps

In 2022, if you make more than $144,000 as a single filer or $214,000 for joint filers, you are not eligible for a Roth IRA. However, you may be able to bypass these limits through a backdoor Roth IRA, which involves converting a traditional IRA to a Roth IRA. Consult a tax professional if you are considering this option.

Acorns Later: How it works

Acorns Later lets you open all the major types of IRAs while making contributing easier. The main benefit of Acorns is psychological – you are investing “found money” you get through spare change roundups. Alternatively, if you set up recurring transfers, they just take money out of your account. We all know we need to save more, but with Acorns you don’t need to actively make that decision every day, week, or month.

What IRA accounts can I open?

Acorns supports traditional, Roth, and SEP IRAs. You can also roll over an existing IRA into your Acorns Later account.

Acorns account minimum

You can start saving for retirement with only $5.

Acorns fees

Acorns charges a monthly subscription fee. Currently, there are two tiers.

  • Acorns Personal ($3/month) includes personal investment, retirement, and checking accounts plus a metal debit card
  • Acorns Family ($5/month) includes all the Personal features plus Acorns Early, which offers investment accounts for kids

Note that the fees can add up for small account balances, though you might still be ok with it if Acorns is helping you save and invest the money you wouldn’t otherwise.

Acorns Later portfolio options

Acorns Later selects your investment portfolio based on how long you have until 59 ½, the “retirement age” according to the IRS. The closer you are to retirement, the more conservative the portfolio will be, meaning that more will be in bonds, which are less risky than stocks.

Socially responsible investing options are available for all except the most conservative portfolio, which is 100% in bonds. Acorns ESG or environmental, social, and governance portfolios pick funds that invest in companies that are better stewards of the environment and treat their employees and shareholders better than average.

🔔 Learn more about Acorns ESG Portfolios.

How to open an Acorns Later account

You need to sign up for Acorns to open an Acorns Later account. You can then set up recurring contributions (starting at $5 a day, week, or month) or make a one-time contribution.

You can withdraw your money when you want, but be prepared to pay a 10% penalty if you are under 59 ½ and have a traditional IRA. There can be some exceptions to this, so talk to a tax advisor if you have questions.

💰 Should you open an Acorns Later account?

  • Acorns IRA is best for people who struggle to save and need a nudge. With the roundup feature and recurring transfers, Acorns lets you save the money you wouldn’t otherwise. They can also help you invest in a socially responsible way
  • However, monthly fees can add up for smaller account balances, so you get better value if you also use Acorns’ other services, like banking and investment accounts
  • Acorns is not the best option for day traders, crypto investors, and stock pickers. Acorns invests money for you in low-cost exchange-traded funds instead

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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