How to Fund a Roth IRA While Earning Bonus AMEX & Chase Points Using “Manufactured Spend”

More and more people are not just working remote, but working for themselves. It’s not just freelancers in creative fields. Professionals unsatisfied with corporate bureaucracy are going out on their own. Many are quitting good jobs to have more control over their life. Working on your own terms can be life changing. One downside often ignored is a lack of retirement planning.

How To Save for Retirement Without a 401(k)

36% of the U.S. workforce is doing some kind of freelance work according to a recent study by Upwork and the Freelancers Union. Working for yourself offers a lot of perks, but no matter how many “How-To” books you buy, there’s no magic one size fits all plan. Least of all, how to properly set up retirement accounts to make up for a lack of employer offered 401(k) program is a cause for concern.

“As a freelancer, you don’t have a 401(k), and sometimes that’s viewed as a negative,” says Andrew Westlin, a financial planner with Betterment. “But you then have the flexibility to choose any provider you want, so you can find one that’s transparent and that has low fees.” That’s where Acorns comes in…

What is Acorns and How Does It Work?

Acorns is an investment app that allows you to set automatic recurring deposits and automatically invests your spare change into a portfolio of ETFs by “rounding up” the purchases they make with linked credit cards.  Per their website:

Acorns Core investors link Round-Up accounts to invest spare change automatically from everyday purchases. There is no limit to how many checking accounts, debit cards, and/or credit cards you can link as Round-Up accounts. Once you link Round-Up account(s), Acorns rounds up your purchases to the next dollar, and invests that change.

For example, if you buy groceries for $25.45, they’ll automatically round up $.55. When your Round-Ups across your linked accounts reach at least $5, they transfer the amount from your Funding Source only. Remember, all Acorns investments are transferred from your one, Funding Source — even Round-Ups.

It’s basically a lazy person’s brokerage account. Even more so, it’s an amazing way to save money for the person who is typically not good at saving money.  Ahem.

Acorns also has an IRA account option called Acorns Later.

Get To The Good Stuff! How Do I Earn Bonus Points While Saving for Retirement?

Acorns gift cards. Yup – there it is. They can be purchased in $25 denominations at PayPal Digital Gifts and limited retail stores.  I mean REAL limited – pretty much Barnes & Noble, ShopRite or PriceRite. Click here to find a store near you that sells Acorns gift cards. Best part?  You can buy the gift cards using a credit card and there are zero purchase fees.

a green card with white text and a white acorn

For those of you know what what types of retailers ShopRite and PriceRite are, you see where I’m going, right?

Using Acorns Gift Cards to Manufacture Spend or Fund the Acorns IRA Account

I contacted Acorns Customer Support last year to see whether funding this lazy man’s brokerage account with my credit card was too good to be true.  Here’s the catch: you can only redeem $250 per quarter (10 gift cards), or $1,000 annually.

a screenshot of a gift card

Once those gift cards are deposited into your account, you can withdraw them into your linked bank account (or fund your IRA).

But Wait, That Seems Like a Lot of Work for $1,000 of Purchases?

Yeah, that’s true. I just set a reminder on my phone for three months and do the damn thing.  I don’t withdraw the money. Honestly, I think it’s just a way I’ve tricked myself into saving an extra $1,000 each year—which is pretty dope. And, I like dope things…especially when they are (almost) free.

Last year, the no-annual fee Chase Freedom Card had a 5x Ultimate Rewards quarter that included PayPal.  Ten Acorns gift cards would earn you 1,250 points – just for being responsible. That’s how I like to think of it at least.  If you’re interested in signing up for the Chase Freedom, apply here to get a $150 bonus after spending $500 in three months.

But! What if you don’t want to wait for PayPal to be listed in a quarterly bonus category? Well, you smart folks probably already know that the American Express Gold card offers 4x Membership Rewards points at U.S. supermarkets! Two of the three retail locations where you can buy Acorns gift cards? SUPERMARKETS. That’s 4,000 Membership Rewards points – again just for being responsible. Look at you!

Sure, there’s a $250 annual fee. But with a bonus of 35,000 points on $2,000 spent in the first three months and all the other perks you get, it might make sense for you!

How to Sign Up

Sign up for a free Acorns account using this link and you’ll get $5 free. (You’re welcome.)

a white phone and laptop with green screen

That’s it. Get signed up, link your accounts and use an AMEX Gold Card or keep your eyes peeled for the next time PayPal is added to a Chase Freedom bonus category.

In Conclusion…

If you’ve read any of my posts, I’m always looking for ways to maximize savings and credit card points.  But even more important, I’m always looking for ways to offset my bad habits with good ones.  Whether or not you’re self-employed or a freelancer, we can all use some help with retirement planning. What better way to offset a bad habit while ALSO being responsible? Good on you…

The post How to Fund a Roth IRA While Earning Bonus AMEX & Chase Points Using “Manufacture Spend” was first published on Coworkaholic.

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