During Retirement: Fidelity or Vanguard?

[Gearhead Jim]

I'm retired at 63 and DW continues as our homemaker at 61. We have a non-COLA pension that currently provides about 25% of our income, my early SS provides about 17%; the remainder comes from our IRAs.
Most of the IRA money is currently managed by a medium size management company whose fees are reasonable; they have specialized knowledge of my own unusual situations that were very useful over the last three years but not needed now. Unfortunately, their investment performance has been somewhat below par in relation to appropriate benchmarks.
I'm thinking of moving the IRA to Fidelity, Vanguard, or some other similar firm with low fees and a simple assest allocation plan during our "distribution phase".
Which company do you recommend, and why?
In your recommended company, do you see any particular fund or small group of funds you recommend for us?
Thanks!

[travelover]

Vanguard. Low fees.

I also use some Fidelity Spartan funds, but really would be happy with just Vanguard.

[rs0460a]

Jim,

I'm retired (a bit over a year) and have Traditional/Roth IRA's at Vanguard, along with a rollover IRA (from my previous 401k and retirement cash-balance pension) from my former employer, at Fidelity. My wife (still working) has her IRA's at Vanguard and 401k at Fidelity.

I keep both, while in retirement. While I won't get into specific funds, I'll say that there are "better" funds available at each, but not all funds available at both. For instance, I could maintain my holdings in VGHCX (Vanguard Health Care), which I've held since fund inception, using Fidelity, but Fidelity would charge a fee to trade if my total balance (e.g. my/DW's holdings) fell below a certain level.

Vanguard has "free services" at our level (Flagship) which includes annual "free" (yeah, you pay for it somewhere!) planning sessions with them. Fidelity offeres the same service.

Fidelity's planning software is better, IMHO. While Vanguard's F.E. product is good for pre-retirees, it does not work at all for retirees (it expects you to convert your holdings to an annuity at retirement. Nope, we're not going there!). Fidelity's planner, Retirement Income Planner (AKA "RIP" ) works much better, giving you a year by year breakdown of withdrawls, income sources, and projected taxes. It also looks at certain expenses in a more finite way. For instance, medical expenses are set at 7% (currently) while the rest of your forecast budget is set to the "standard inflation rate" (of which you can override). I ETF from the IMA to my bank checking accounts every month for my required income. I could pay my bills (most are all ETF's - no more checks!) directly from the Fidelity account, but I like the idea of "separation of duties" (anyway, I'm retired and have the time to "play around" )...

I use Fidelity's IMA (Income Management Account) to "sweep" my income from my current sources. It is linked to the output from RIP to show you (graphically) your current projected/actual "burn" rate, and points out possible "problems" with the amount of withdrawls. Yes, you can do this manually, but I like the "toys".

Fidelity has "walk in centers" where they have someone to talk to you directly, and even have informational classes every month (along with pizza! - yeah, you probably pay for that, also!) Vanguard does not have any "branches" you can "touch/feel".

It comes down to the fact that you really don't have to go with either. I found that taking the "best of each" works for me.

Anyway, that's what I'm doing, in the same situation.

- Ron

[Lsbcal]

Ron, what amounts do you need to have at Fidelity to access most of their services including the ones you mentioned? Thanks in advance.

We have most everything at Vanguard.

[rs0460a]

Quote:

Originally Posted by lsbcal Ron, what amounts do you need to have at Fidelity to access most of their services including the ones you mentioned? Thanks in advance. We have most everything at Vanguard.

Here's a link that will give you the breakdown on levels of service:

Fidelity Investments

It shows the investor center locations (along with available classes) along with the levels for Premium and Private Access level services. It all depends on the amount of your assets (including Fidelity and non-Fidelity accounts) along with how they are "combined" (e.g. my wife's Fidelity holdings are included with my own to get Private Access level service).

Probably easier just to call them and ask ....

- Ron

[IBWino]

My 401K is at Fidelity and we have a taxable investment account at Vanguard. The weighted average expense ratio for the funds in my 401K at Fidelity is 0.812%, while the weighted average of similar funds in our other account at Vanguard is 0.16%. Because of this, I intend to roll the Fidelity 401K into an IRA at Vanguard when I retire.

[Gearhead Jim]

Quote:

Originally Posted by IBWino My 401K is at Fidelity and we have a taxable investment account at Vanguard. The weighted average expense ratio for the funds in my 401K at Fidelity is 0.812%, while the weighted average of similar funds in our other account at Vanguard is 0.16%. Because of this, I intend to roll the Fidelity 401K into an IRA at Vanguard when I retire.

How do the performances compare? Saving 1/2 of 1% in expenses is good, but only worth while if the performance is equal or better.

[travelover]

Quote:

Originally Posted by Gearhead Jim How do the performances compare? Saving 1/2 of 1% in expenses is good, but only worth while if the performance is equal or better.

For a given index, like S&P 500 for instance, returns will be nearly identical less fees. For managed funds, this is a complex question and I'll let others argue discuss their view points.

[IBWino]

Quote:

Originally Posted by Gearhead Jim How do the performances compare? Saving 1/2 of 1% in expenses is good, but only worth while if the performance is equal or better.

I haven't compared the long term performance of the individual funds, but they are mostly index funds, so I doubt that there is much difference. We've only had the Vanguard account for 2½ years, and I can tell you that its IRR has been slightly better.

[haha]

Quote:

Originally Posted by rs0460a Fidelity has "walk in centers" where they have someone to talk to you directly, and even have informational classes every month (along with pizza! - yeah, you probably pay for that, also!) Vanguard does not have any "branches" you can "touch/feel".

Oh boy, your Fidelity branches trump mine. Mine are strictly look, with an occasional hug if I show up for an undersubscribed program.

At least once a week I drop in, go upstairs, have a coffee, read the WSJ and look at the girls. Went today. I really don't care if it costs me a few bucks. My rep even gave me some halibut he caught in Alaska.

Ha

[CuppaJoe]

Quote:

Originally Posted by haha Oh boy, your Fidelity branches trump mine. Mine are strictly look, with an occasional hug if I show up for an undersubscribed program. At least once a week I drop in, go upstairs, have a coffee, read the WSJ and look at the girls. Went today. I really don't care if it costs me a few bucks. My rep even gave me some halibut he caught in Alaska. Ha

-
I betta switch quik. Schwab has a convenient escalator to get to the deposit people but you have to go round to the back to wait for an elevator out. Easy in, difficult out? In between is their glassed-in "college," to help brainwash you, I suppose.

[LOL!]

If you want absolute lowest fees, then the answer is WellsFargo. 100 free trades a year for lower expense ratios ETFs. And if you can't part with a Fidelity or Vanguard fund, you can buy those too for no commission at WellsFargo. Plus you are required to get free checking, free bill pay, etc. Oh, did I mention this was all FREE?

[Dawg52]

Quote:

Originally Posted by haha Oh boy, your Fidelity branches trump mine. Mine are strictly look, with an occasional hug if I show up for an undersubscribed program. At least once a week I drop in, go upstairs, have a coffee, read the WSJ and look at the girls. Went today. I really don't care if it costs me a few bucks. My rep even gave me some halibut he caught in Alaska. Ha

You mean Fidelity has brick and mortar branches? You don't get that in a small town. Closes one to me is 200 miles away. Never been in one. The only walk in investment centers in my area are the high priced ones. I'll stick with the old computer.

[Lsbcal]

The reason I'm with Vanguard is because they have very low fee and well managed bond funds plus index funds. For the active funds (or ETF's) I can use their VBS brokerage service. Having most of the money at one places makes managing multiple accounts (mine/wife's IRA's, Roths, taxable) and maintaining a clear allocation a lot easier. I don't need a lot of free trades though I get some. The less trading I do the better.

[friar1610]

Quote:

Originally Posted by rs0460a Jim, I'm retired (a bit over a year) and have Traditional/Roth IRA's at Vanguard, along with a rollover IRA (from my previous 401k and retirement cash-balance pension) from my former employer, at Fidelity. My wife (still working) has her IRA's at Vanguard and 401k at Fidelity.... I keep both, while in retirement. While I won't get into specific funds, I'll say that there are "better" funds available at each, but not all funds available at both. It comes down to the fact that you really don't have to go with either. I found that taking the "best of each" works for me. - Ron

At various times in my investment life I have been with both Vanguard and Fidelity. At the moment, I'm, 100% Vanguard. But they're both excellent companies and I would just like to say that Ron's post gives a very balanced view of both companies. I don't think you can go wrong having 100% in either company but splitting your money between the two makes a lot of sense also.

[clifp]

I've accounts with both, but I like Schwab the best but that is probably 90% just an function of been with with the from 25 years and they've treated me well.

If you are strictly an index, bond fund investor than I think Vanguard is slightly superior and the money market has a higher interest rate.

If you intend to invest in individual stocks or bonds Fidelity brokerage services are superior.

I'd be tempted to try and play them off each other. Congratulation I am going to invest my money with either your of the other guy, why should I chose you? Maybe test drive them both for a year. You're retired so you'll have more time