Tax considerations when closing Betterment
Selling taxable investments triggers capital gains tax on any gains. Betterment provides a 1099-B in January - download it before closing. For IRAs, early withdrawal before age 59½ triggers a 10% penalty plus income tax on pre-tax contributions. Consider tax implications before deciding to fully close rather than transfer.
Investment tracking alternatives
- Empower (Personal Capital) AFFILIATE - Free portfolio tracking, net worth analysis, and retirement planner. Link all accounts at no cost.
- Fidelity Go - 0% annual fee for accounts under $25,000. Automated investing with no subscription cost.
- Vanguard Digital Advisor - Low-cost automated investing from the index fund pioneer.
Frequently asked questions
- Does closing Betterment affect my credit score?
- No. Investment accounts have no impact on credit scores.
- Can I transfer Betterment investments to another broker without selling?
- Yes. Betterment supports ACATS transfers. Contact support to initiate.
- Are there fees to withdraw from Betterment?
- No withdrawal fees. Taxable account sales may trigger capital gains tax.