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Q: How do you set up a synthetic long?

A synthetic long is established by buying an at the money call and selling a put at the same strike price. The options have the same expiration date. The resulting exposure mimics that of a long stock position.

Q: What is the maximum payoff on a synthetic long put?

The maximum payoff on a synthetic long put happens if the stock price goes to zero. Maximum profit when the underlying stock goes to zero is the strike price of the put minus the premium paid to construct the trade.

Apr

2025

Guide to Synthetic Longs

By Mike Zaccardi, CMT, CFA | Growing Wealth, invest, Investing | Comments Off

Editor's Note: Options are not suitable for all investors. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Please see the Characteristics and Risks of Standardized Options.

A synthetic long is an options strategy that replicates a long position in an underlying asset. The strategy is used by bullish investors who wish to use the leverage of options to benefit from a potential rise in a stock’s price with less capital than would be needed to buy the shares outright.

Similar to holding the underlying stock, the synthetic long position offers unlimited profit potential if the stock’s price rises. Conversely, it also entails the risk of substantial losses if the stock’s price declines precipitously or goes to zero.

Key Points

• A synthetic long is an options strategy that combines a long call and a short put at the same strike price and expiration to replicate a long stock position.

• Leverage allows for exposure to price movements with less capital, but the strategy carries significant downside risk if the asset’s value declines.

• Maximum profit is theoretically unlimited, while the maximum loss is limited to the strike price minus the premium received since an asset cannot drop below zero.

• Exiting a synthetic long involves closing both the long call and short put before expiration to avoid assignment and capital outlay.

• Alternative strategies include risk reversals, synthetic long calls, and synthetic long puts, each offering different risk-reward profiles based on market outlook.

What Is a Synthetic Long?

First, a refresher on the two basic types of options: puts and calls. Options are a type of derivative that may allow investors to gain — not by owning the underlying asset and waiting for it to go up, but by strategically using options contracts to profit from the asset’s price movements.

Establishing a synthetic long involves purchasing at-the-money call options and selling put options with the same strike price and expiration. This strategy typically aligns with a bullish outlook, since potential gains are unlimited, the downside risk could be substantial if the asset price declines significantly.

An investor puts on a synthetic long options position when they’re bullish on the underlying asset, but want a lower cost alternative to owning the asset. A synthetic long options position has the same risk and reward profile as a long equity position. The setup can be beneficial to traders since a lower amount of capital is needed to establish the position. The options exposure offers leverage, whereas owning the asset outright does not.

Unlike owning the stock directly, a synthetic long position is subject to the expiration dates of the options involved. Additionally, if the stock’s price falls below the put’s strike price, the investor may be obligated to purchase the stock at that price, which could potentially lead to a significant financial commitment. Additionally, the options trader also does not have shareholder voting rights and will not receive dividends.

How Do Synthetic Longs Work?

Synthetic longs work by offering traders the potential for unlimited upside via the long call position. If a trader was very bullish, they might buy only the long call.

However, the short put helps finance the synthetic long trade by offsetting the expense of buying the long call. In some cases, the trade can even be executed at a credit (profit) depending on the premiums of the two options.

By including the short put, the investor can be exposed to losses, should the asset price drop below the strike price of the short put, but no more than would be expected if the trader went long the underlying asset.

Setup

A synthetic long options play is one of many popular options strategies, and it can be constructed simply: You buy close-to-the money (preferably at-the-money) calls and sell puts at the same strike price and expiration date.

Your expectation is that the underlying asset price will rise, just as you would hope it to do if you were holding the asset outright. If you’d rather own the asset outright, you could purchase the stock directly through a brokerage as an alternative.

Maximum Profit

There is unlimited profit potential with a synthetic long, just as there is with a long position. If the underlying share price rises, the value of the call will increase, allowing the position to be closed at a profit while covering (buying back) the short put.

Breakeven Point

The breakeven point for a synthetic long position is determined by adding the net debit paid to the strike price, or subtracting the net credit received from the strike price at the onset of the trade

Maximum Loss

The maximum loss is limited, but only because an asset’s price cannot fall below zero. However, the synthetic long position can incur substantial losses if the underlying stock’s price decreases significantly. The potential loss mirrors that of owning the stock outright and can be seen if the underlying share price drops below the breakeven point. Losses are maximized if the asset price drops to zero.

In the event that the asset price drops below the strike price of the short put, the trader can be assigned shares and would be obligated to buy the asset at the strike price. The risk of assignment increases as the asset price declines and the option nears expiration, but assignment can happen at any time once the asset trades below the strike price.

The loss would be slightly higher or lower based on the credit or debit of the initial trade.

Exit Strategy

Most traders do not hold a synthetic long through expiry. Rather, they use options to employ leverage with a directional bet on the underlying asset price, then exit the trade before expiration.

To exit the trade, the investor sells the long call and buys back the short put. This tactic avoids them having to buy the underlying asset and the increased capital outlay that would require.

Synthetic Long Example

Let’s say an investor is bullish on shares of a stock currently trading at $100, and wants to use leverage via options rather than purchasing the stock outright.

The investor constructs a synthetic long options trade by purchasing a $100 call option contract expiring in one month for $5 and simultaneously selling a $100 put option contract at the same expiration date for $4. The net debit (premium paid) is $1 per share.

Net debit = Call Option Price – Put Option Price = $5 – $4 = $1 per share
Note: The $1 net debit is per share. Since an option contract is for 100 shares,
the debit will be $100 per option contract.

This price reflects the total cost of entering the synthetic long position, factoring in both legs of the trade.

If the asset price declines, the position incurs losses. If the stock price drops to $90 after one week, the put premium rises to $12 while the call option price falls to $4. The unrealized loss is $9 (the long call price minus the short put price minus the net debit paid at initiation).

Unrealized loss = Long Call Price – Short Put Price – Net Debit at Initiation
Unrealized loss = $4 – $12 – $1 = Loss of $9 per share or $900 per option contract

The investor chooses to hold the position with the hope that the stock price climbs back. Because the stock price has dropped below the $100 strike price, the investor is at risk of the short put being exercised and assigned.

A week before expiration, the stock price has risen sharply to $110. The investor manages the trade by selling the calls and covering the short put. At this time, the call is worth $12 while the put is worth $3. The net proceeds from the exit is $9. This results in a profit of $8 ($9 of premium from the exit minus the $1 net debit).

Profit = Long Call Price – Short Put Price – Net Debit at Initiation
Profit = $12 – $3 – $1 = Profit of $8 per share or $800 per option contract

The investor could hold the trade through expiration but would then be exposed to having to own the stock.

Finally, user-friendly options trading is here.^*

Trade options with SoFi Invest on an easy-to-use, intuitively designed online platform.

*Check out the OCC Options Disclosure Document.

Calculating Returns

A synthetic long replicates a long position in the underlying asset but at a lower cost.

In the example above, an investor might have purchased 100 shares at $100 each for a capital outlay of $10,000. If the shares closed at $110, the long position would be worth $11,000.

$ Gain = Selling Price – Purchase Price

$ Gain = $11,000 – $10,000 = $1,000

% Gain = $ Gain / Purchase Price

% Gain = $1,000 / $10,000 = 10% Gain

The synthetic long in the example above is substantially cheaper at a cost (debit) of $100 per contract, representing 100 shares. When sold, the options were worth $900.

$ Gain = Selling Price – Purchase Price

$ Gain = $900 – $100 = $800

Note this gain is similar to what would be realized in a long stock position, though transaction costs and execution factors can affect actual returns.

% Gain = $ Gain / Purchase Price

% Gain = $800 / $100 = 800% Gain

Although dollar gains are very similar, the percentage gains are larger due to the power of leverage using options. But leverage works both ways.

If we take a loss on a synthetic long, dollar losses will also be in line with losses on a long position, but percentage losses can be as outsized as the gains.

Pros and Cons of Synthetic Longs

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Pros:

• Potential for significant upside

• Uses a smaller capital outlay to have long exposure

• Clearly established cost basis

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Cons:

• Substantial loss potential if the stock falls to zero

• Does not provide voting rights nor dividends as a shareholder would

• The trade’s timeframe is confined to the options’ expiration date

Alternatives to Synthetic Longs

To have long exposure to a stock, an investor can choose to own the stock outright. Stock ownership carries with it the benefits of voting rights and dividends but at a much higher capital outlay.

Another alternative to holding the stock is a risk reversal, which involves selling an out-of-the-money put and buying an out-of-the-money call, both with the same expiration date. This approach differs from a synthetic long stock position, which typically uses at-the-money options. A risk reversal is sometimes referred to as a collar.

A synthetic long call can also be created by holding a long stock position and purchasing a long put option at the same strike price and expiration to hedge downside risk.

A bearish alternative is a synthetic long put strategy, which replicates the payoff of a long put option. This strategy is created by shorting the underlying stock and purchasing a call option at the same strike price and expiration to define risk while maintaining downside exposure.

The Takeaway

Options synthetic long strategies combine a short put and a long call at the same strike and expiration date. This options trading strategy mimics the exposure of being long the underlying asset while requiring less capital than outright ownership. It’s one of many options strategies that allow traders to help define their risk and reward objectives while employing leverage.

Putting on a synthetic long position means buying at-the-money call options and selling put options at the same strike price and expiration. This strategy has a bullish outlook because the maximum profit is unlimited, while downside risk can be substantial.

Investors who are ready to try their hand at options trading despite the risks involved, might consider checking out SoFi’s options trading platform offered through SoFi Securities, LLC. The platform’s user-friendly design allows investors to buy put and call options through the mobile app or web platform, and get important metrics like breakeven percentage, maximum profit/loss, and more with the click of a button.

Plus, SoFi offers educational resources — including a step-by-step in-app guide — to help you learn more about options trading. Trading options involves high-risk strategies, and should be undertaken by experienced investors. Currently, investors can not sell options on SoFi Active Invest®.

Explore SoFi’s user-friendly options trading platform.

🛈 While investors are not able to sell options on SoFi’s options trading platform at this time, they can buy call and put options to try to benefit from stock movements or manage risk.

FAQ

What is a long combination in options trading?

A combination is a general options trading term for any trade that uses multiple option types, strikes, or expirations on the same underlying asset. A long combination is when an investor benefits as the underlying share price rises.

How do you set up a synthetic long?

A synthetic long is established by buying an at-the-money call and selling a put at the same strike price. The options have the same expiration date. The resulting exposure mimics that of a long stock position.

What is the maximum payoff on a synthetic long put?

The maximum payoff on a synthetic long put occurs if the stock price goes to zero. Maximum profit in this scenario is the short sale price minus the premium paid to establish the trade.

Photo credit: iStock/FG Trade

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q125-071

Apr

2025

Guide to Understanding and Tracking Robo-Advisor Returns

By Michael Flannelly | Growing Wealth, invest, Investing | Comments Off

Robo-advisors are not advisors, but rather automated investment platforms that provide algorithm-generated portfolios to help individuals manage their money over time. As such, robo portfolios deliver a range of returns for investors, like any investment.

Robo-advisors are only automated in the sense that they use sophisticated technology to manage basic portfolios, typically composed of exchange-traded funds (ETFs) or other low-cost investments. Returns are not automated or guaranteed.

The underlying funds in a robo portfolio are the same or similar to those that regular investors can purchase on their own. Thus investors still need to consider the impact of gains and losses, taxes, and fees when thinking about robo-advisor returns.

Key Points

• Robo-advisors are automated portfolios, generated and managed by sophisticated algorithms.

• Investors supply some basic personal information and receive portfolio recommendations.

• The returns, positive or negative, from a robo-advisor platform are not automated or guaranteed, although the portfolios are designed to help manage risk.

• Automated portfolios are generally considered lower cost and consist of a basic assortment of exchange-traded funds.

• When choosing to invest in a robo-advisor portfolio, investors still need to consider the impact of taxes and fees over time, as these can impact returns.

How Robo-Advisors Help Investors

A robo-advisor is an automated, algorithm-based service that typically offers investors a questionnaire to assess their risk tolerance, time horizon, and investment goals. Based on these inputs, the robo-advisor platform suggests a portfolio that, ideally, will match the investor’s goals and preferences.

Robo-advisor algorithms typically employ some of the principles of modern portfolio theory (MPT), and other quantitative techniques, to establish and manage a range of pre-set portfolio options. Investors generally have a choice between more aggressive or more conservative investing allocations, but they typically cannot alter the makeup of an automated portfolio (unless that’s a feature specifically offered by a certain platform).

The algorithms used by robo-advisors are often updated to reflect changes in the market, and most rebalance on a regular cadence (e.g. annually) to maintain the portfolio’s asset allocation.

Robo Advisor Tools

Robo-advisors may also offer tools to help investors make decisions about their finances. These can include portfolio analysis tools, risk tolerance assessment tools, and educational resources. Investors can use these tools to monitor their portfolios and make informed decisions.

Robo-advisors typically charge a fee for their services, usually a percentage of the total portfolio value. However, the fees are generally lower than those traditional financial advisors charge.

The goal of robo-advisors is to provide a low-cost and convenient investing option to a wide range of customers, including those who may not have the resources or desire to work with a human, financial advisor — and those who prefer a more hands-off approach to their investments, whether they’re investing online or through a brokerage.

Recommended: What Is Automated Investing?

Evaluating Robo-Advisor Performance

Evaluating the performance of a robo-advisor is critical for investors interested in using them to build wealth. Although some robo services claim to have proprietary algorithms based on investment theories developed by Nobel Prize-winning economists, these formulas simply inform the technology on the backend; they don’t guarantee a certain return or performance.

An investor should evaluate robo-advisor performance by considering its historic returns, cost, and other key metrics. By assessing the following metrics, investors can better understand the robo-advisor’s performance and how it aligns with their investment goals:

• Cost: The annual cost to invest with a certain robo advisor is one of the most important factors influencing returns that investors can control.

Robo advisors are generally lower cost than, say, working with a live financial advisor. But automated services charge annual fees, in addition to the expense ratios of the investments in the portfolio. Because fees eat into returns over time, it’s always important to know what the total costs are up front.

• Returns: It may be useful to compare the rate of return of a robo-advisor’s portfolios to relevant benchmarks. For instance, investors can look at the returns of their robo-advisor portfolio versus the S&P 500 Index. If the robo-advisor performs better than the S&P 500, it may indicate a well-run robo-advisor.

However, past performance is not predictive of future results, but it can provide a general idea of how the robo-advisor’s investments have performed over time.

• Diversification: Evaluate the diversification of the robo-advisor’s portfolios within and across different asset classes. Portfolio diversification can help manage risk by spreading investments across different types of securities.

• Rebalancing: Inquire how often and how the robo-advisor’s portfolios are rebalanced and how frequently the underlying investments are reviewed. Some robo-advisors offer automated tax-loss harvesting, which can be advantageous.

• Customer Service: Check if the robo-advisor provides access to a live advisor or customer support, as this can be an important factor if you need help or have questions.

What Is the Average Robo-Advisor Return?

The average return for a robo-advisor portfolio can vary depending on several factors, such as the portfolio’s specific investments (i.e., its allocation), the robo-advisor’s investment strategy, and overall market conditions.

In general, robo-advisors tend to invest in low-cost index funds and ETFs, which often track the broader market. Therefore, a robo-advisor portfolio’s returns may be similar to a mix of comparable index funds minus any advisory fees charged by the robo-advisor, plus the fees of the underlying funds.

Nonetheless, returns can vary widely depending on the robo-advisor and the portfolio. For example, as of November 30, 2024, the 3-year annualized trailing return for robo-advisors with portfolios with a 60/40 allocation ranged from 3.98% to 5.96%, net of fees.

Robo-Advisor Returns

Below are the returns of the top 10 largest robo-advisors by AUM, according to the Motley Fool. The returns shown in the table are from portfolios with a 60% stock and 40% bond asset allocation, net of fees, as of November 30, 2024.

Robo-Advisor	Assets Under Management (AUM)	5-Year trailing returns
Vanguard Digital Advisor	333,066,527,268	4.01%
Betterment	$45,932,816,617	4.30%
Wealthfront Risk 4.0	$35,915,923,641	5.96%
US Bancorp Automated Investor	$15,874,717,608	4.11%
Acorns	$8,210,969,354	5.38%
Stash	$3,343,843,237	5.51%
SigFig	$2,797,084,452	3.98%
Ellevest	$2,112,640,438	4.28%
Ally Invest	$1,127,619,162	4.17%
SoFi	$943,520,661	5.00%
Source: The Motley Fool, as of November 30, 2024.

Understanding Robo-Advisor Fees

Understanding the different kinds of investment fees associated with robo-advisors, and how they compare to other investment options is critical for investors.

Investment fees are often expressed as a tiny percentage, e.g. 0.25% or 0.50%. But over time fees eat into a portfolio’s returns, making it harder for investors to build wealth. Analyzing robo-advisor expenses will help investors to determine if the robo-advisor is a cost-effective solution for their investment needs.

Note that all investment costs should be spelled out clearly for the investor (be sure to call customer service and ask, if they aren’t).

• Advisory Fees: This is the fee charged by the robo-advisor for managing the investor’s portfolio. It is typically a percentage of a portfolio’s assets under management and many robo-advisors charge less than 0.50%. Some robo-advisors offer fee-free options to their clients.

• Expense Ratios: An expense ratio is the fee charged by the underlying funds in the portfolio, such as ETFs. Expense ratios vary widely — a common range is 0.05% to 1.50%. Given the long-term impact of these fees, be sure to know what you’re paying up front.

• Account Minimums: Some robo-advisors may have minimum account balance requirements. A minimum account balance means investors must deposit a certain amount to open an account, which can be a headwind to opening an account if the investor starts with a small amount of capital.

• Other Fees: Some robo-advisors may charge additional fees for services such as tax-loss harvesting or closing an account.

Pros and Cons of Robo-Advisors

Robo-advisors are often appealing to many investors because of their hands-off nature. However, as with any financial product or service, there are pros and cons to using a robo-advisor.

Pros and Cons of Robo-Advisors
Pros	Cons
Relatively low cost vs. live advisors	Platforms charge a fee in addition to expense ratios
Convenient, and easy to use	Limited personalization
Provide basic diversification	Portfolio options are not flexible
Automatic rebalancing	Minimum balance requirements can limit access to certain features

The pros of using robo-advisors include the following:

• Low cost: Robo-advisors typically have lower fees than traditional financial advisors, making them an attractive option for people who want to invest but avoid paying high fees. Some robo-advisors charge as little as 0.25% of assets under management, while traditional financial advisors may charge 1% or more. This can make a significant difference over time, especially for people with smaller portfolios.

• Convenience: Robo-advisors are available 24/7 and can be accessed from anywhere with an internet connection, which makes it easy for people to check their investments.

• Diversification: Robo-advisors use algorithms to create diversified portfolios with a mix of different index funds and ETFs in various asset classes, which can help investors reduce risk and improve returns.

The cons of using robo-advisors include the following:

• Limited personalization: Robo-advisors use algorithms to create portfolios, which may not take into account an individual’s unique financial situation or goals. A lack of personalization can be a problem for people with complex financial situations or who have specific investment goals that a robo-advisor may be unable to accommodate.

• Limited or no access to human advice: While some robo-advisors provide access to a financial advisor to help investors, these services can be limited or dependent on a minimum balance. As such they may not meet the needs of some users.

• Fewer investment options: Some robo-advisors may have limited investment options compared to traditional financial advisors or a self-directed brokerage account. For instance, robo-advisors tend to invest in ETFs rather than individual stocks. If an investor wants to put money into a specific stock or asset, they may want to open a self-directed brokerage account in addition to a robo-advisor portfolio.

Want to start investing?

Our robo-advisor service can offer a portfolio to suit
your needs and risk level.

Can Investors Lose Money With Robo-Advisors?

As with any investment, investors can lose money with robo-advisors.

The underlying investments in an automated portfolio are generally ETFs that an investor can buy anywhere. In other words, these are ordinary investments that may gain or lose value.

That said, a robo portfolio is designed to provide a well-balanced allocation, based on the investor’s goal and time horizon, with the aim of mitigating the risk of losses. That said, there are no guarantees. And the term “automated” refers to the use of technology; it doesn’t mean returns are somehow automated.

Why Do People Use Robo-Advisors?

People use robo-advisors because they can be cheaper than traditional financial advisors, and because the investment choices are decided by an algorithm, some investors find it reassuring to know that there may be less risk of human error. Other investors may find that a robo-advisor offers greater convenience when managing investments.

Investors who are comfortable with the underlying technology that these services use may appreciate having certain investment chores automated for them.

For example, some robo-advisors will automatically rebalance the portfolio according to the investors’ risk tolerance, and investment goals. This ease of rebalancing can help investors maintain their desired risk level and ensure that their portfolio stays aligned with their investment goals.

Additionally, as noted above, some robo-advisors use automated tax-loss harvesting to help investors minimize their tax liability. Tax-loss harvesting is a technique that involves selling investments that have lost value to offset capital gains from other investments, which can help reduce the amount of taxes you owe. SoFi does not offer automated tax-loss harvesting.

The Takeaway

Robo-advisors use algorithms and technology to create and manage portfolios for investors. In recent years, robo-advisors have become increasingly popular as more and more people look for low-cost, convenient ways to invest their money. This has lowered the barrier to entry for many individuals, including younger people, to start investing.

Ready to start investing for your goals, but want some help? You might want to consider opening an automated investing account with SoFi. With SoFi Invest® automated investing, we provide a short questionnaire to learn about your goals and risk tolerance. Based on your replies, we then suggest a couple of portfolio options with a different mix of ETFs that might suit you.

See why SoFi is this year’s top-ranked robo advisor.

FAQ

Do robo-advisors work?

Robo-advisors can be effective tools to help people invest their money and achieve their financial goals. Robo-advisors are generally cheaper and more convenient than traditional human financial advisors. However, it is important to research each robo-advisor to ensure it is the best fit for your needs, and that you’re comfortable with what a robo platform can and cannot do.

What are the differences between a robo-advisor and a financial advisor?

Robo-advisors typically have lower advisory fees and minimum deposit requirements, while financial advisors often require a minimum deposit and charge a percentage of the assets they manage. Another difference is that robo-advisors provide automated and algorithm-based guidance, while financial advisors provide personalized advice tailored to individual needs and goals.

Are robo-advisors good for retirees?

Robo-advisors can be a good option for some retirees because they can provide a low-cost, automated way to manage investments. However, if a retiree wants more personalized advice or help with tax and estate planning, a live advisor may be preferable.

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by email customer service at https://sofi.app.link/investchat. Please read the prospectus carefully prior to investing.
Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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If you invest in Exchange Traded Funds (ETFs) through SoFi Invest (either by buying them yourself or via investing in SoFi Invest’s automated investments, formerly SoFi Wealth), these funds will have their own management fees. These fees are not paid directly by you, but rather by the fund itself. these fees do reduce the fund’s returns. Check out each fund’s prospectus for details. SoFi Invest does not receive sales commissions, 12b-1 fees, or other fees from ETFs for investing such funds on behalf of advisory clients, though if SoFi Invest creates its own funds, it could earn management fees there.
SoFi Invest may waive all, or part of any of these fees, permanently or for a period of time, at its sole discretion for any reason. Fees are subject to change at any time. The current fee schedule will always be available in your Account Documents section of SoFi Invest.

Mutual Funds (MFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or clicking the prospectus link on the fund's respective page at sofi.com. You may also contact customer service at: 1.855.456.7634. Please read the prospectus carefully prior to investing.Mutual Funds must be bought and sold at NAV (Net Asset Value); unless otherwise noted in the prospectus, trades are only done once per day after the markets close. Investment returns are subject to risk, include the risk of loss. Shares may be worth more or less their original value when redeemed. The diversification of a mutual fund will not protect against loss. A mutual fund may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.

Disclaimer: The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOIN-Q125-050

Apr

2025

10 Top Monthly Dividend Stocks for April 2025

By Michael Flannelly | Growing Wealth, invest, Investing | Comments Off

While most dividend-paying stocks do so every quarter, some companies make monthly dividend payments. Getting dividend payouts on a monthly schedule may appeal to investors, especially those relying on dividends for a steady income stream.

A dividend is a portion of a company’s earnings that it pays to shareholders on a regular basis. Many investors seek out dividend-paying stocks as a way to generate income.

Note that there are no guarantees that a company that pays dividends will continue to do so.

Key Points

• Monthly dividend stocks can provide steady income, but are less common than quarterly dividends.

• Utility and energy companies may offer consistent dividends due to steady consumer demand and limited competition.

• Dividend ETFs are passive and often track indexes of companies with a history of strong dividend growth.

• REITs pay dividends from income-generating properties and must distribute 90% of income to shareholders.

• Consider not only a dividend stock’s yield, but the long-term stability of the company and its dividend payout ratio.

What Are Monthly Dividend Stocks?

As mentioned above, dividend stocks usually pay out quarterly. However, some companies pay dividends monthly.

Stocks that pay dividends monthly may appeal to investors who want steady monthly income. Additionally, monthly dividend stocks may help investors who reinvest the payments to realize the benefit of compounding returns.

For example, through dividend reinvestment plans (DRIPs) investors can use dividend payouts to buy more shares of stock. Potentially, the more shares they own, the larger their future dividends could be.

How Does Dividend Investing Work?

Most dividends are cash payments made on a per-share basis, as approved by the company’s board of directors. For example, if Company A pays a monthly dividend of 30 cents per share, an investor with 100 shares of stock would receive $30 per month.

Some investors may utilize dividend-paying stocks as part of an income investing strategy. Retirees, for example, may seek investments that deliver a reliable income stream for their retirement. It’s also possible to reinvest the cash from dividend payouts.

A stock dividend is different from a cash dividend. Stock dividends are an increase in the number of shares investors own, reflected as a percentage. If an investor holds 100 shares of Company X, which offers a 3% stock dividend, the investor would have 103 shares after the dividend payout.

Understanding Dividend Yield

Understanding dividends is one part of an investor’s decision when choosing dividend-paying stocks. Another factor is dividend yield, which is the annual dividend amount the company pays shareholders divided by its stock price, and shown as a percentage.

If Company A pays 30 cents per share in dividends per month, that’s $3.60 per year, per share. If the share price is $50, to get the dividend yield you divide the annual dividend amount by the current share price:

$3.60 / $50 = 7.2%

The dividend yield can be useful as it can help an investor to assess the potential total return of a given stock, including possible gains or losses over a year.

But a higher or lower dividend yield isn’t necessarily better or worse, as the yield fluctuates along with the stock price. A stock’s dividend yield could be high because the share price is falling, which can be a sign that a company is struggling. Or, a high dividend yield may indicate that a company is paying out an unsustainably high dividend.

Investors will often compare a stock’s dividend yield to other companies in the same industry to determine whether a yield is attractive. Whether investing online or through a brokerage, it’s important to consider company fundamentals, risk factors, and other metrics when selecting any investment.

Top 10 Monthly Dividend Stocks by Yield

Following are some of the top-paying dividend stocks by yield, as of April 1, 2025. The dividends for these stocks are expressed here as a 12-month forward dividend yield, meaning the percentage of a company’s current stock price that the company is projected to pay out through dividends over the next 12 months.

Company	Ticker	12-month forward yield
Orchid Island Capital	ORC	19.21%
ARMOUR Residential REIT, Inc.	ARR	16.79%
AGNC Investment Corp.	AGNC	15.12%
Dynex Capital	DX	14.32%
Ellington Financial	EFC	11.73%
Gladstone Commercial	GOOD	7.99%
Apple Hospitality REIT	APLE	7.46%
EPR Properties	EPR	6.63%
LTC Properties	LTC	6.40%
Realty Income Corp.	O	5.61%

Source: Data from Bloomberg, as of April 1, 2025. Universe of stocks derived from Wilshire 5000 index. Companies have >$500M market cap and positive forward EPS.

Types of Monthly Dividend Stocks

To invest in monthly dividend stocks, investors may want to consider companies in industries that tend to offer monthly dividend payouts. These companies usually have regular cash flow that can sustain consistent dividend payments.

Energy and Utility Companies

In the world of dividend payouts, utility and energy companies (e.g. water, gas, electricity) offer investors a certain consistency and reliability, thanks to the fact that consumer demand for utilities tends to be steady, and thus so is revenue.

Utility companies are considered a type of infrastructure investment, meaning that they provide systems that help society function. As such, these companies tend to be highly durable, offering tangible benefits to consumers and investors.

Also, many energy and utility companies may have little competition in a given region, which can add to the stability of revenue and thereby dividends.

ETFs

Just as an ordinary exchange-traded fund, or ETF, consists of a basket of securities, a dividend-paying ETF includes dividend-paying stocks or other assets. And similar to dividend-paying stocks, investors in dividend ETFs may benefit from regular monthly payouts, depending on the ETF.

Like most types of ETFs, dividend-paying funds are passive, meaning they track an index. In many cases, these ETFs seek to mirror indexes that include companies with a solid track record of dividend growth.

REITs

Real estate investment trusts (REITs) offer investors a way to buy shares in certain types of income-generating properties without the headache of having to manage these properties themselves.

REITs pay out dividends because they receive steady cash flow through rent payments and sometimes profits from the sale of a property. Also, these companies are legally required to pay at least 90% of their income to shareholders through dividends. Some REITs will pay dividends monthly.

Note: REIT payouts are ordinary dividends, i.e. they’re taxed as income, not at the more favorable capital gains rate.

Ways to Evaluate Monthly Dividend Stocks

Investors may want to analyze several criteria to determine the dividend stocks ideal for a wealth-building strategy. Here are a few things investors can consider when looking for the highest dividend stocks:

Dividend Payout Ratio

Investors will also factor in a stock’s dividend payout ratio when making investment decisions. This ratio expresses the percentage of income that a company pays to shareholders.

The dividend payout ratio is calculated by dividing a company’s total dividends paid by its net income.

Dividend payout ratio (%) = dividends paid / net income

Investors can also calculate the dividend payout ratio on a per share basis, dividing dividends per share by earnings per share.

Dividend payout ratio (%) = dividends per share / earnings per share

The dividend payout ratio can help determine if the dividend payments a company distributes make sense in the context of its earnings. Like dividend yield, a high dividend payout ratio may be good, especially if investors want a company to pay more of its profits to investors. However, an extremely high ratio can be difficult to sustain.

If a stock is of interest, it may help to check out the company’s dividend payout ratios over an extended period and compare it to comparable companies in the same industry.

Company Stability

Investors may also wish to focus on stable, well-run companies with a reputation for paying consistent or rising dividends for years. Dividend aristocrats – companies that have paid and increased their dividends for at least 25 years – and blue chip stocks are examples of relatively stable companies that are attractive to dividend-focused investors.

These companies, however, do not always have the highest dividend yields. Nor do these companies pay monthly dividends; most companies will pay dividends quarterly.

Furthermore, keep in mind a company’s future prospects, not just its past success, when shopping for high-dividend stocks.

Tax Implications

Dividends also have specific tax implications that investors should know.

• A qualified dividend qualifies for the capital gains tax rate, which is typically more favorable than an investor’s marginal tax rate.

• An ordinary dividend is taxed at an individual’s income tax rate, which is typically higher than the capital gains rate.

Investors will receive a Form DIV-1099 when $10 or more in dividend income is paid out during the year. If the dividends are in a tax-advantaged account, an IRA, 401(k), etc., the money will grow tax-free until it’s withdrawn.

Recommended: Ordinary vs Qualified Dividends

Pros and Cons of Investing in Monthly Dividend Stocks

While dividend stocks offer some advantages, they also come with some risks and disadvantages investors must bear in mind.

Pros

• Passive income. As noted above, investing in dividend stocks can provide a source of passive income (although dividends can be cut at any time).

• The ability to reinvest. Dividend stocks allow for reinvestment (using dividend payments to buy more stocks, thus compounding returns). Steady dividends may also allow investors who reinvest the gains to buy stocks at a lower price while the market is down — similar to using a dollar-cost averaging strategy.

Additionally, the stocks of mature companies that pay dividends also may be less vulnerable to market fluctuations than a start-up or growth stock.

• Potential income during a downturn. Another plus for those who choose dividend stocks is that they may receive dividend payments even if the market falls. That can help insulate investors during tough economic times.

Cons

• Dividends are not guaranteed. A company can decide to suspend or cut its dividends at any time. It could be that the company is truly in trouble or that it simply needs the money for a new project or acquisition. This may be especially true for monthly dividend stocks; many REITs that pay monthly dividends suspended or cut dividends during the Covid-19 pandemic.

Either way, if the public sees the dividend cut as a negative sign, the share price could fall. And if that happens, an investor could suffer a double loss.

• Tax inefficiency. First, a corporation must pay tax on its earnings, and then when it distributes dividends to shareholders (which are considered profit-after-tax), the shareholder also must pay tax as an individual. Owing to this tax inefficiency, sometimes referred to as a type of double taxation, some companies decide not to offer dividends and find other ways to pass along profits.

Note that this tax issue doesn’t impact REITs the same way. Entities such as REITs and Master Limited Partnerships (MLPs) pass along most of their profits to investors. In these cases, the company doesn’t owe tax on the profits it passes onto the investor.

• Limited options. Also, choosing the right dividend stock can be tricky. First, monthly dividend stocks aren’t as common as quarterly dividend payouts. And the metrics for analyzing attractive dividend stocks are quite different from those for selecting ordinary stocks.

• Dividends can drop or be cut. It’s important to remember that dividends may fluctuate depending on how a company is performing, or how it chooses to distribute its profits. During a downturn, it’s possible to see lower dividends, or for a company to cut its dividend payout.

• Share price appreciation may be limited. Gains in the share price of some dividend stocks can be limited, as many dividend-paying companies are typically not in a rapid growth phase.

Pros and Cons of Monthly Dividend Stocks
Pros	Cons
Provide passive income	Dividend payments are not guaranteed
Dividend reinvestment can lead to compound returns	Selecting monthly dividend stocks can be tricky
Investors may earn a return even when the stock price goes down	Dividends may be cut or reduced during a downturn
Qualified dividends have preferential tax treatment over ordinary dividends; they qualify for the capital gains tax rate	Some companies view dividends as tax inefficient
	Share price appreciation may be limited compared to growth stocks

Things to Avoid When Investing in Monthly Dividend Stocks

When investing in monthly dividend stocks, there are a few things to avoid:

• Avoid investing in a company that pays a monthly dividend solely to pay a monthly dividend. Many companies pay monthly dividends, but not all are suitable investments. Do your research and only invest in companies that you believe will be successful in the future.

• Avoid investing in a company or industry that you don’t understand. If you don’t understand how a company makes money, you should hesitate to invest in it.

• Avoid investing all of your money in monthly dividend stocks. Diversify your portfolio by investing in other types of stocks, bonds, funds, and other securities.

The Takeaway

Dividend-paying stocks can be desirable. They can add to your income, or offer the potential for reinvestment via dividend reinvestment plans or other strategies you pursue. Monthly dividend stocks offer the potential for steady income, but they are less common than stocks that pay on a quarterly basis.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

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FAQ

How do monthly dividend stocks work?

A monthly dividend stock is a stock that pays out dividends every month instead of the more common quarterly basis. This can provide investors with a steadier stream of income, which can be particularly helpful if you rely on dividends for living expenses.

How can you get stocks that pay monthly dividends?

To invest in stocks that pay monthly dividends, you need to research financial websites and publications to find companies that pay dividends monthly. There are not many monthly dividend stocks, especially compared with stocks that pay quarterly dividends.

How can you determine the stocks that pay the highest monthly dividends?

Investors use metrics like the dividend yield and dividend payout ratio to determine the stocks that might be most desirable. However, stocks that pay the highest monthly dividends can change over time, and it’s important to consider other methods of assessing a stock, since a higher dividend isn’t always a sign of company health.

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Apr

2025

What Is the Average Retirement Savings by Age?

By Laurel Tincher | Growing Wealth, invest, Investing, Preparing for Retirement | Comments Off

The average retirement savings by age depends on people’s income, expenses, and even where they live (with some states having higher retirement savings rates than others). The older you are, the more likely you are to prioritize retirement savings.

How much have Americans saved for retirement? While nearly half (46%) of households have no retirement savings, those that do have an average of about $334,000 saved, according to the Federal Reserve Board’s 2022 Survey of Consumer Finance, which is the most recent data available.

If you look at the median amount Americans have saved in retirement accounts such as IRAs, 401(k) and 403(b) plans, pensions, and so forth, that number is lower: about $87,000 per household.

Key Points

• Average retirement savings by age varies widely, with savings increasing as people get older.

• Though 46% of U.S. households show no retirement savings, those with retirement assets have an average of about $334,000.

• By age 30, it’s generally recommended to save an amount equal to your annual salary, and by age 40, three to four times annual salary.

• By age 50, it’s advised to have six times annual salary saved, and by age 60, eight times.

• Given that many Americans are not saving for retirement, it’s important to consider these broader benchmarks as a way to keep your own savings on track.

Average Retirement Savings By Age

Below is a breakdown of retirement savings by age group, ranging from people in their 20s to people in their 70s, according to the 2022 Survey of Consumer Finance.

Age Group	Mean Retirement Savings
Under age 35	$49,130
35 to 44	$141,520
45 to 54	$313,220
55 to 64	$537,560
65 to 74	$609,230

Source: 2022 Survey of Consumer Finance, Federal Reserve Board, latest data available.

Average Retirement Savings Before Age 35: $49,130

Most Americans in their 20s and early 30s haven’t reached their peak earning years, and many might be paying off student loans, and saving up to buy a house or have kids. Retirement isn’t always top of mind.

But the earlier people can figure out which retirement plan is right for them and commit to actually starting a retirement savings plan, the more they will benefit from compound growth over time.

Average Retirement Savings, Age 35 to 44: $141,520

With their careers and lives generally more established, many people are making more money at this age than they ever have. It can be tempting to spend more on lifestyle choices (e.g., vacations, cars, furniture). Many people also have mortgages, families, and other big-ticket expenses during this time in their lives.

But those who put that money towards retirement may be able to reach their retirement goal with greater confidence. Granted, it can be difficult to juggle competing priorities, but taking advantage of employer-provided retirement accounts, matching funds, and automatic transfers to savings can all help busy people make progress.

Recommended: How to Save for Retirement at 30

Average Retirement Savings, Age 45 to 54: $313,220

At this age, some Americans are on track to reach their retirement goals, while others are far off. There are still ways to catch up, such as cutting unnecessary expenses, moving to a smaller home, or putting any additional pay, income, or bonuses into retirement accounts.

In addition, many retirement accounts offer what’s known as a catch-up provision, which is a way to add more money to certain accounts, once you’re over age 50. Starting in 2025, there is also a new policy that allows people between 60 and 64 to save an extra amount in an employer-sponsored plan.

Average Retirement Savings, Age 55 to 64: $537,560

Although the goal for many is to retire at about age 65, many Americans have to keep working since they don’t have enough savings. In some cases, people plan on working at this stage of life anyway, although it’s not always easy to find work. Ideally, working in later years of life would be a choice and not a necessity.

Retirement contributions tend to increase as people age partly because they are earning more and partly because they are thinking about retirement more — and in some cases because other expenses are lower. For example: Your kids may be done with college, or you may have paid off your mortgage.

Average Retirement Savings, Age 65 to 74: $609,320

Many people in this age group have embarked on retirement, thanks to years of self-directed investing (although many retirees may have consulted a professional as well). This is a time when people need to evaluate the amount they have saved in light of how long they are likely to live — which is the most significant factor impacting retirees, in addition to the cost of living.

It may be possible to enjoy some years of travel, starting a business, helping raise grandchildren — or other adventures. Or it may be a time to adjust living expenses in order to make one’s savings last.

¹Terms and conditions apply. Roll over a minimum of $20K to receive the 1% match offer. Matches on contributions are made up to the annual limits.

Target Retirement Savings by Age

Because the cost and standard of living varies so greatly, there aren’t clear dollar figure amounts that each age group should aim to have saved for retirement. But there are suggested guidelines, and numerous ways to save for retirement as well.

Retirement Savings Benchmarks

• By age 30: It’s generally recommended that people save an amount equal to their annual salary by the time they reach age 30. That may not be a realistic goal for many people, but it can be a general guideline or goal to aspire to.

One way to achieve this is to save 10-15% of one’s gross income starting in one’s 20s. Some employers will match 401(k) contributions if employees save a certain amount each month, so it’s a good idea to contribute at least that much to take advantage of what is essentially free money.

• By age 40: It’s recommended that investors have three to four times their annual salary saved by age 40.

• By age 50: Investors are typically advised to have six times their salary saved by age 50.

• By age 60: It’s recommended that investors have eight times their salary saved by age 60.

• By age 67: Investors are typically advised to have ten times their salary saved by age 67, which is considered full retirement age for Social Security for many Americans.

For example, if a 67-year-old makes $75,000 per year, ideally they would aim to have $750,000 saved, more or less, at the point at which they actually retire and start to claim Social Security.

Is Anyone Saving Enough for Retirement?

Despite the above recommendations, most Americans don’t have nearly these amounts in their retirement accounts. As noted, a significant percentage of Americans don’t have any retirement savings at all — and that includes Americans who are near retirement age.

In a recent SoFi survey of adults aged 18 and over, 59% had either no retirement savings or less than $49,000.

So, while some people are saving enough for retirement, many people aren’t. And relying on Social Security benefits isn’t likely to cover all of a retiree’s living expenses.

Social Security and Your Retirement

Social Security was designed to help people pay some of their expenses during retirement, but it was always assumed these benefits would be part of an individual’s larger income plan, which might include a pension and personal savings.

As a result, Social Security benefits are generally modest. As of January 2025, the estimated average Social Security payment for a retired worker was around $1,976 per month. But benefit amounts can be higher or lower, depending on your earning history, how old you are when you file, and other factors.

Perspectives on Social Security Vary Widely

In addition, people have different perspectives about Social Security. According to SoFi’s recent retirement survey, some adults think it will be their main source of income in retirement, while others see it as a supplement to other income sources. And some people aren’t counting on Social Security at all.

Perceptions of Social Security Perceptions in Retirement

• 41% Perceive SS as a supplementary source of income

• 31% Perceive SS as a their primary source of income

• 16% Aren’t relying on SS as a source of income

• 12% Aren’t sure how to perceive SS in their retirement plans

Source: SoFi Retirement Survey, April 2024

The fact that nearly a third of respondents believe Social Security could be their primary source of income reveals a lack of awareness of these benefits and how they work. And it points to a need for greater education around the need for personal savings and careful financial planning.

Strategies to Maximize Retirement Savings

It can be stressful to feel behind on saving for retirement, but it’s never too late to start.

There are several ways to save for retirement — but a good place to start, if you haven’t already, is by creating a budget to track expenses. This allows you to see where your money is going and identify categories of spending that could be reduced. It’s then possible to direct some of those savings to a retirement account, such as a traditional IRA, or a work-sponsored plan such as a 401(k) or 403(b).

Some retirement plans also have catch up options for those who start late — typically, individuals older than 50 can contribute extra funds to their retirement accounts.

No matter how much you put aside for retirement, or whether you contribute to a traditional IRA or a Roth IRA, a 401(k) or an after-tax investment account, a good strategy is to automate savings. With automated savings, the money is deducted from your paycheck or your bank account automatically — making it easy to forget that the money was ever in the account in the first place.

Retirement Account Options

Whether you’re employed full-time, working part-time, or you’re self-employed, there are many types of retirement account options available. Following is a selection of common retirement accounts, but there are others as well.

Bear in mind: Most retirement accounts offer different tax advantages, as well as strict rules about annual contribution limits, withdrawals and early withdrawals, loans, and required minimum distributions (RMDs). Be sure to understand the terms, to ensure a the plan you choose can help you reach your goals before funding a retirement account.

Individual Retirement Accounts, or IRAs

With an IRA, you open and fund a tax-advantaged IRA account yourself or for a custodian (e.g., a minor child). IRAs are for individuals, and are not offered by employers. That said, small businesses may offer a special type of IRA.

IRAs come in two flavors: traditional and Roth IRAs. When considering a Roth IRA vs traditional it’s important to understand the tax implications of each type of account. Traditional IRAs take tax-deferred contributions. This means your contributions are pre-tax, and can reduce your taxable income. You owe ordinary income tax on withdrawals.

Roth IRAs are considered after tax, because you deposit funds that have been taxed already. Qualified withdrawals are tax free.

Employer-Sponsored Plans

A 401(k) plan is a tax-advantaged plan typically offered to the employees of a company. A 403(b) and 457(b) are similar, but offered by governments, schools, churches, or non-profit organizations that are tax exempt.

Traditional accounts allow employees to contribute pre-tax dollars, but withdrawals are taxed as income in retirement. Roth versions of these accounts (you may be able to set up a Roth 401(k) or Roth 403(b) account) allow after-tax contributions, and qualified tax-free withdrawals.

Self-Employed and Small Business Accounts

• A Saving Incentive Match Plan for Employees, or SIMPLE IRA plan, is also a tax-deferred account, similar to a traditional IRA. But these accounts are designed for small businesses with 100 employees or less (including sole proprietors, and people who are self-employed).

As a result, the contribution limits for SIMPLE IRAs are higher, and the tax treatment of these plans is slightly different.

• A SEP IRA is a Simplified Employee Pension Plan that small businesses and self-employed individuals can fund. Here, the employer makes the contributions. Employees do not. Like a SIMPLE IRA, the annual contribution limits are generally higher than for standard IRAs.

The Takeaway

The average American household has about $334,000 in retirement accounts, e.g., IRAs, 401(k) and 403(b) plans, pensions, and so forth. The number varies depending on age groups and other factors. Knowing how much others in your age group are saving for retirement can help provide a benchmark for evaluating whether you’re making the progress you envision.

There are a number of different formulas, calculations, and rules of thumb to help individuals figure out how much money they’ll need in retirement. While these figures can be helpful, it’s also important to take personal goals, financial responsibilities, and lifestyle into consideration.

Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Easily manage your retirement savings with a SoFi IRA.

FAQ

How much money do I need to retire comfortably?

Calculating the amount you need to retire comfortably is highly personal. It depends on how long you’re likely to live, how healthy you are, as well as the lifestyle you envision. It may be worth consulting with a professional to lay out different options, and what the financial implications may be, as this can influence how much you save as well as your investment strategy.

What percentage of my income should I save for retirement?

The general rule of thumb is to save between 10% and 20% of your income for retirement. The exact amount will depend on many factors, including whether you’re saving for yourself or also for a spouse; what your likely longevity will be; whether you might have other financial sources of income (e.g., from a trust or an inheritance); and the retirement lifestyle you hope to have.

When should I start saving for retirement?

Given that you could live as many years in retirement as you did while you were working, the odds are that you might need more savings than you anticipated. In that light, it’s wise to start as soon as you can, and maximize the savings opportunities available to you.

What happens if I start saving for retirement late?

If you get a late start on retirement, it’s even more important to maximize your savings and your investing strategy. As an older saver, it can be hard to recover from market volatility, so you want to be cautious. It may make sense to work with a professional.

How do I catch up on retirement savings?

Catching up on retirement savings can mean boosting the percentage you save, pairing another retirement account, such as an IRA, with your employer plan, making sure you get your employer match, and — for those 50 and up — being sure to take advantage of catch-up provisions that allow you to save more in most retirement accounts. For those between the ages of 60 and 64, a “super catch-up” amount is now allowed in most employer plans.

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q125-059

Apr

2025

Preferred Stock vs. Common Stock

By Ashley Kilroy | Growing Wealth, invest, Investing | Comments Off

Before you start trading on the market, read our guide to understand the pros and cons of common vs. preferred stock.

Guide to Synthetic Longs

What Is a Synthetic Long?

How Do Synthetic Longs Work?

Setup

Maximum Profit

Breakeven Point

Maximum Loss

Exit Strategy

Synthetic Long Example

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Calculating Returns

Pros and Cons of Synthetic Longs

Pros:

Cons:

Alternatives to Synthetic Longs

The Takeaway

FAQ

What is a long combination in options trading?

How do you set up a synthetic long?

What is the maximum payoff on a synthetic long put?

Guide to Understanding and Tracking Robo-Advisor Returns

How Robo-Advisors Help Investors

Robo Advisor Tools

Evaluating Robo-Advisor Performance

What Is the Average Robo-Advisor Return?

Robo-Advisor Returns

Understanding Robo-Advisor Fees

Pros and Cons of Robo-Advisors

The pros of using robo-advisors include the following:

The cons of using robo-advisors include the following:

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Our robo-advisor service can offer a portfolio to suityour needs and risk level.

Can Investors Lose Money With Robo-Advisors?

Why Do People Use Robo-Advisors?

The Takeaway

FAQ

Do robo-advisors work?

What are the differences between a robo-advisor and a financial advisor?

Are robo-advisors good for retirees?

10 Top Monthly Dividend Stocks for April 2025

What Are Monthly Dividend Stocks?

How Does Dividend Investing Work?

Understanding Dividend Yield

Top 10 Monthly Dividend Stocks by Yield

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Types of Monthly Dividend Stocks

Energy and Utility Companies

ETFs

REITs

Ways to Evaluate Monthly Dividend Stocks

Dividend Payout Ratio

Company Stability

Tax Implications

Pros and Cons of Investing in Monthly Dividend Stocks

Pros

Cons

Things to Avoid When Investing in Monthly Dividend Stocks

The Takeaway

FAQ

How do monthly dividend stocks work?

How can you get stocks that pay monthly dividends?

How can you determine the stocks that pay the highest monthly dividends?

What Is the Average Retirement Savings by Age?

Average Retirement Savings By Age

Average Retirement Savings Before Age 35: $49,130

Average Retirement Savings, Age 35 to 44: $141,520

Average Retirement Savings, Age 45 to 54: $313,220

Average Retirement Savings, Age 55 to 64: $537,560

Average Retirement Savings, Age 65 to 74: $609,320

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Target Retirement Savings by Age

Retirement Savings Benchmarks

Is Anyone Saving Enough for Retirement?

Social Security and Your Retirement

Perspectives on Social Security Vary Widely

Strategies to Maximize Retirement Savings

Retirement Account Options

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Our robo-advisor service can offer a portfolio to suit
your needs and risk level.

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