How To Roll Over Your Roth IRA From Betterment To Vanguard (And Why I Did It)

This past year, I finally went ahead and rolled over my Roth IRA from Betterment to Vanguard. It’s been a long time coming. Indeed, a year ago, I wrote a post about how I was going to do exactly that – then, of course, I procrastinated and did nothing for the next 12 months. What held me back was a combination of laziness plus a little bit of apprehension about how to roll over my Roth IRA directly to Vanguard.

After finally taking action and completing this process, I can safely say that rolling over my Roth IRA from Betterment to Vanguard wasn’t difficult. In fact, it was pretty painless and further reinforces my belief that the best Roth IRA investing strategy for the new investor is to start with Betterment or Wealthfront, then switch over to Vanguard later down the line.

In today’s post, I’m going to walk you exactly how the whole rollover process works.

Rolling Over A Roth IRA From Betterment To Vanguard – The Strategy

Taking a step back, the strategy I recommend to most new investors is to start your investing career by opening up a Roth IRA with a robo-advisor like Betterment or Wealthfront. Then, after you save up for a few years and are more comfortable with how investing works, roll over your Roth IRA directly to Vanguard.

I’ve written about this strategy in more detail in this post, but here’s a quick summary of my rationale for this. What holds most of us back from investing isn’t necessarily that we don’t want to do it. I think it’s really that the process of opening up a Roth IRA at a traditional brokerage like Vanguard or Fidelity isn’t really intuitive, and truth be told, can be downright scary for the new investor (I know it was for me when I first started investing).

None of us wants to mess up when we start investing, and as much as those of us in the personal finance world like to think that anyone can open up a Roth IRA and start investing without any issue, it really isn’t as simple as just telling someone to go open up a Roth IRA. When you’re coming in with no knowledge base (and let’s face it, we all start out in this position at some point in our life), just telling someone to do that is basically gibberish. It doesn’t help either that the interfaces for traditional brokerages like Vanguard and Fidelity aren’t particularly intuitive.

I know this because I was in this exact same position just a few years ago. I had no idea what a mutual fund was or how to invest in anything – and of course, when confronted with something that requires some effort, most of us default to doing nothing. However, instead of defaulting to doing nothing, I opted instead to start out my Roth IRA with Betterment. It brought me comfort in knowing that, even though I had no idea what I was doing, I was at least investing my money correctly.

The advantage of starting out your Roth IRA with a robo-advisor like Betterment or Wealthfront is that these companies make investing so easy that it’s basically comparable in difficulty to opening up and funding a bank account – something that even the most financially challenged of us can do. By using a robo-advisor at the beginning of your investing career, all you have to do is focus on putting money into the account while the robo-advisor goes ahead and invests it for you in an appropriate and responsible way (I believe every major robo-advisor is a fiduciary as well, which means they have to invest it appropriately for you). You basically can’t mess up when you get started like this.

Yes, you’re paying a premium for this service – 0.25% of assets under management typically – but I think that’s a fair price to help make investing super easy. We all pay premiums to get others to do things we can’t figure out, and even telling someone to invest in a target date mutual fund means that you’re okay with someone paying a premium to do something that they could do on their own for a lower cost.

And honestly, a 0.25% management fee isn’t going to be the reason you can’t retire. I’d be perfectly comfortable with having someone use a robo-advisor for their Roth IRA forever if that’s what works for them. And if you’re not comfortable with paying any sort of management fee, go ahead and use a free robo-advisor such as WiseBanyan or M1 Finance (the only reason I don’t use them is that I’m not sure what their long-term business model will be and they charge a fee to roll over funds, which doesn’t work well with my strategy).

To understand the importance of making investing really as simple as just putting money into the account, consider this. I started investing for real when I opened up a Roth IRA with Betterment back in 2015. However, almost a decade earlier, I’d actually opened up a Roth IRA with E*Trade after I read The Automatic Millionaire (one of my formative personal finance books and one that I still think is worth reading). That book told me I needed to get a Roth IRA started, so of course, I went and did that. The problem was, I didn’t know what I was supposed to do after I opened it.

Long story short, I ended up investing all of the money I put into my Roth IRA into Borders stock. A decade later, I had $0 in that account. It was a wasted decade and something that could have been avoided if robo-advisors like Betterment, Wealthfront, WiseBanyan, or M1 Finance had existed back then. These robo-advisors would have literally changed my investing life.

Why I Rolled Over My Roth IRA From Betterment To Vanguard

Now that I’m pretty well-versed in how money works, I don’t have a lot of need for a robo-advisor like Betterment or Wealthfront. As a result, it makes sense for me to just move my funds out of those robo-advisors and do it all on my own. This saves me the 0.25% management fee, which can save me a lot of money in the long run.

Once you’ve gotten more comfortable with investing and understand a little more about how it works, it makes sense to go ahead and just move it out of those robo-advisors and do it all on your own.

Step 1: Open A Roth IRA With Vanguard

Naturally, the first thing you’ll need to do if you want to roll over your Roth IRA from Betterment to Vanguard is to open a Roth IRA with Vanguard. The process to do this is straightforward – just go to the Vanguard website and select “Open An Account” (this should normally be found in the top right corner of the main page).

When you start opening your account, one thing you’ll need to think about is how you want to fund your Roth IRA. Vanguard gives you three options – an electronic bank transfer, a rollover from an employer plan, or a transfer from another financial firm.

When I opened my Vanguard Roth IRA, I actually needed to fund it for the last tax year, so I funded it initially with a transfer from my bank account. If you’re only rolling over funds from Betterment (or Wealthfront or any other brokerage), then you’ll want to select the “transfer from another financial firm” option, then follow the steps to initiate the transfer, which I’ll go over in the next section.

Step 2: Initiate The Roll Over

After selecting the option to transfer funds from another financial firm, you’ll then need to follow a few steps and fill out some paperwork. First, Vanguard will ask you where are the assets that you’d like to transfer. You’ll want to select “with your brokerage firm or financial institution.”

Next, Vanguard will lay out the transfer process for you. As you can see, you’ll need to complete a transfer form and mail it to Vanguard. Vanguard will then send that form to Betterment and Betterment will then transfer your funds to Vanguard.

On the next few pages, you’ll enter your brokerage firm, the type of account you’re transferring, and all of the relevant account information. Vanguard will auto-fill the brokerage firm information, so all you have to do is type in Betterment and it will auto-fill it to Betterment Securities, which I guess is the official name for Betterment.

From there, continue with the remaining steps, which are all pretty self-explanatory (you’ll fill in what you’re transferring and answer some other questions about your account). One of the more important questions you need to answer is what to do with your dividends and capital gains. Make sure to select “reinvest” so that all of your dividends will automatically be reinvested when you earn them.

Finally, once you’ve gotten through all of those steps, you’ll end up at the “review and e-sign” page. Sign the form and submit it to Vanguard. Once you’ve done that, you’ll be given instructions to print out the form and mail it directly to Vanguard. I just stuck my transfer form in a regular envelope and dropped it in a regular mailbox.

Step 3: Invest The Rolled Over Funds

With your money now transferred directly to Betterment, the final step will be to actually invest your rolled over funds. There are a lot of ways you can invest – far more than I can detail in this short post. Instead of going into all of your options, I’m just going to discuss what I did.

I’ve always been a fan of the Simple Path to Wealth by JL Collins, so I invested 100% of my Roth IRA into VTSAX (that’s the Vanguard Total Stock Market Index Fund). This fund is super low cost and, for the most part, you won’t mess up if you choose to invest solely in this fund.

To do this, click on the “buy and sell” button in your account and select “Buy Vanguard Funds.”

Next, click on “add another vanguard mutual fund,” then type in VTSAX. You’ll then select that fund, then indicate where the funds are coming from. They should be coming from your Vanguard Settlement Fund. Note that sometimes, you’ll end up with a few bucks in your Vanguard Settlement Fund, so make sure to invest those few bucks in as well so that you end up with all of your money invested and $0 in your settlement fund.

And that’s it! Pretty simple and easy. I recommend you also download the Vanguard app so you can keep track of stuff on your phone.

The most important thing though is to avoid messing with your investments. Once you’ve picked what you want to invest in, don’t mess with it anymore – you’ll probably never make money if you jump in and out of the market. This is retirement money anyway, so just let it ride for the long term.

Final Thoughts

I still believe that for most people, starting with a robo-advisor like Betterment or Wealthfront is the ideal way to get started investing. While investing isn’t actually difficult, at a practical level, it isn’t that easy either. Vanguard, Fidelity, and all of the traditional brokerages are, in all honesty, not very intuitive. I know this because I’ve been in that same position of opening up a brokerage account and having no idea what I’m supposed to do next. So start with Betterment or Wealthfront first if you have no idea what you’re doing.

At some point though, you might be comfortable enough that you can figure things out on your own. Once you’re there, then I think you should just roll over your funds directly into Vanguard and save yourself the 0.25% management fee that most robo-advisors charge.

Thankfully, as I hope I showed you in this post, the process of rolling over a Roth IRA from Betterment to Vanguard is pretty simple.

More Recommended Ebike/Scooters

Check out these other ebikes and scooters I've reviewed:

Urban Arrow Ebike – Last year, I made one of the largest purchases I’ve ever made – I bought a $9,000 electric cargo bike from Urban Arrow. In my Urban Arrow review, I will discuss what it is and why I decided to buy this bike, as well as discuss how impactful a bike like this can be on your journey to financial independence.
Troxus Explorer Step-Thru Ebike – The Troxus Explorer Step-Thru is a fat-tire ebike that I’ve had the pleasure of riding for a while now. It has amazing power, great looks, and awesome range. If you’re looking for a great fat-tire ebike that offers a lot for the price, the Troxus Explorer Step-Thru is definitely one for you to consider. Check out my Troxus Explorer Step-Thru Review.
Hovsco HovBeta Ebike – The HovBeta is a folding ebike with great specs and a lot of interesting features, and importantly, it’s sold at a good price point. I’ve had a blast commuting with it and using it to do deliveries with DoorDash, Uber Eats, and Grubhub. Check out my Hovsco HovBeta Ebike Review.
Vanpowers Manidae Ebike – The Vanpowers Manidae is a fat tire ebike that I’ve been riding as my primary winter commuting bike and have also been using it to do food delivery with apps like DoorDash, Uber Eats, and Grubhub. After clocking in a decent number of miles with this ebike, I wanted to write a post sharing what my experience with the Vanpowers Manidae ebike has been like. Check out my Vanpowers Manidae Review.
Sohamo S3 Step-Thru Folding EBike Review – A Great Value Folding Ebike – The Sohamo S3 Step-Thru Folding Ebike is an entry-level folding ebike that offers a lot of value for the price point. I’ve been riding the Sohamo S3 for a while now, putting the bike through its paces, and I have to say, this bike has exceeded all of my expectations. Check out my Sohamo Review.
KBO Flip Ebike – The KBO Flip is an excellent bike. I’ve had a great time riding it and think it’s a versatile bike that can be used for a lot of purposes and can fit a variety of lifestyles. It’s worked out great for me as a general commuter bike and as a food delivery bike. Check out my KBO Flip Review.
Hiboy P7 Commuter Ebike – The Hiboy P7 is an excellent electric commuter bike that’s offered at an affordable price point. The range and speed of this bike are both very good, so you won’t have any trouble getting anywhere you need to go with it. As a food delivery vehicle, this is also good – with how much range it offers, you’ll be able to work all day on a single charge. Check out my Hiboy P7 Commuter Electric Bike Review.
Himiway Escape Ebike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
Espin Sport Ebike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
Varla Falcon Scooter – The Varla Falcon is an excellent scooter that offers a good amount of power at a lower price point compared to more powerful scooters. It’s not exactly an entry-level scooter, nor is it a high-powered scooter. I think it fits somewhere in-between those two categories – an intermediate scooter if I had to give it a category. Check out my Varla Falcon Review.
Hiboy S2 Scooter – The Hiboy S2 is an excellent entry-level commuter scooter that's perfect for someone looking to save some money in transportation costs and improve their commute. Check out my Hiboy S2 Review.
Hiboy S2R Scooter – The Hiboy S2R is one of the more interesting electric scooters I’ve been able to test out. It’s not a high-powered scooter, but for an everyday transport option, it’s very useful, especially given some of the unique features that it has. Indeed, for the price, the Hiboy S2R might be the best value scooter I’ve used. Check out my Hiboy S2R Review.
Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.

More Recommended Investing App Bonuses

For additional investing app bonuses, be sure to check out the ones below:

M1 Finance ($100) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
Webull (20 free stock shares) – Webull's current promotion gives you 20 free shares valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free shares using Webull.
Moomoo (15 free stocks) – Moomoo is a free investing app currently offering 2 different referral bonuses if you open an account using a referral link. Read my Moomoo referral bonus guide for more information.
Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.
SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with just $10 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.

More Recommended Bank Account Bonuses

If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.

SoFi Money ($325) – SoFi Money is a free checking account from SoFi. They’re currently offering a $25 referral bonus if you open a SoFi account with a referral link and deposit $10. You can also make an additional $300 as well if you complete a direct deposit. This is a good bank that is also 100% free, so you won’t have to worry about managing this account. Here’s a post I wrote with instructions on how to earn your SoFi Money bonus: SoFi Money Referral Bonus: Step By Step Guide.
Fairwinds Credit Union ($175) – Fairwinds Credit Union is offering a referral bonus for users that sign up using a referral link. Fairwinds has no fees or minimum balance, so this is a particularly easy bonus to earn. Since this is a smaller credit union, my gut instinct tells me this offer won’t be around long, so if you’re in a position to meet the bonus requirements, grab this bonus before it’s gone. Here is my step-by-step guide on how to earn your Fairwinds Credit Union bonus.
Upgrade ($150) – Upgrade is a free checking account that’s currently offering a $150 referral bonus if you open an account and complete a direct deposit. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Here’s a post I wrote with more details: Upgrade $150 Referral Bonus – Step By Step Directions.
Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
US Bank Business ($800) – This is a fairly easy bank bonus to earn, since there are no direct deposit requirements. In addition, you can open the Silver Business Checking account, which comes with no monthly fees. Check out how to earn this big bonus here.
Fifth Third Bank ($325) – This offer is limited to customers in the following states:Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, West Virginia, and South Carolina. If you don’t live in one of those states, you won’t be able to open an account onlinebut you can still open an account in-branch if you happen to be visiting a city that has a branch. This is a fairly easy bank bonus to earn, especially since there are plenty of data points showing what will trigger the direct deposit requirement. In addition, you can open the Fifth Third Momentum Checking bank account, which comes with no monthly fees or minimum balance requirements.Read my guide on this bonus here.
GO2Bank ($75) - GO2Bank is an easy bank bonus that I recommend people take advantage of if they have an easy way of meeting the direct deposit requirement. I like that it’s easy to open the account and that the bonus pays out quickly. Check out my step-by-step guide on how to earn your GO2Bank $75 referral bonus.
Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link. Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
Varo ($30) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $30 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.

Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.

Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.

Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:

SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
5% Savings Accounts. I'm currently getting 5.32% interest on my savings through a company called Raisin. Opening a Raisin account takes minutes to complete, it's free, and all of your funds are FDIC-insured. I explain how it works, why I'm now using it to store my emergency fund and any other cash savings I have, and why I recommend everyone check it out in this review.
US Bank Business. US Bank is currently offering new business customers a $800 signup bonus after opening a new account and meeting certain requirements.
M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $250 for opening an account.
Personal Capital. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.

Feel free to send Kevin a message here.

How To Roll Over Your Roth IRA From Betterment To Vanguard (And Why I Did It) - Financial Panther (2024)