Leaving broker for Vanguard- need advice

[lssugoalie]

Hi all , I've been stalking this forum for the past couple of weeks and now need some advice.
I am 28, hubby is 39. He's the only income at about 110k/year gross. We live way below our means and have been maxing out his TSP and both of our Roth IRAs. When I met him he was with Edward Jones where he was really good friends with the advisor, that advisor left and we were passed on to someone else who, to me, is really shady. He's already tried to sell us a variable annuity, a LIRP?, and is taking big comissions on mutual funds that seem to be stagnant. I want to open a Vanguard account for our Roths, but don't know what to put the money in with such an age difference. Hubby just started this real job 6 years ago and his earliest retirement age is 57, we're shooting for his age 60. I will be transferring from Ed. Jones to Vanguard approx. $15k for me and $22k for him. we will transfer our contributions of $416/month each as well. He will have a gov't pension of approx $3500/month at age 60 plus social security. Any help is much appreciated as he's very hands off with investing so I'm kind of on my own. Thanks.

 

[Midpack]

Welcome to the forum. I'd recommend you ask Vanguard for a recommendation and go from there. In my experience they won't pressure you to adopt it, they provide suggestions, but they leave it to you act - it's not like a retail broker.

Based on what you've said, there are several good options. Maybe begin with an all-in-one or balanced fund or model your holdings after a low cost index fund based lazy portfolio (Scott Burns, Bogle, Coffeehouse Investor, William Bernstein to name several).

This group can probably help you ask the right questions more effectively if you have a starting point, like after Vanguard has offered suggestions.

 

[REWahoo]

Welcome to the forum. I'd recommend you ask Vanguard for a recommendation. In my experience they won't pressure you to adopt it, they provide suggestions, but they leave it to you act - it's not like a retail broker.

+1

 

[lssugoalie]

will do, thanks.

 

[Midpack]

will do, thanks.

You can see all this without a login:

If you want the ultimate in low maintenance from Vanguard, this is an option https://personal.vanguard.com/us/funds/vanguard/TargetRetirementList.

And here's a simple "quiz" that will give you a basic recommendation https://personal.vanguard.com/us/funds/tools/recommendation?reset=true just to get you started. I did it with some random answers and it came back with three recommended funds (example below). Give it a try with your own input!

 

[LOL!]

Check out the bogleheads forum for all kinds of free personalized investing advice.

May I ask this question-> If you have been stalking this forum for a couple of weeks, have you not already seen the few times that it has been recommended to check out the Bogleheads forum?

 

[lssugoalie]

I have been on Bogleheads a lot as well, thought I'd ask here first. Thanks for the advice, I'll be calling Vanguard soon.

 

[LOL!]

Thanks for the response. Good luck!

 

[Berkshire_Bull]

Depending on what you own through Jones I would be VERY careful about instructing Vanguard to "liquidate & transfer" which means Jons sells what you have and send a check. The safer route would be to have Vanguard (which is an ACAT eligible firm) request a "transfer in-kind" of what you have at Jones and then liquidate at Vanguard and buy whatever fund you want. FYI: Jones will bang you for $85 per account for a "closing fee" no matter what + now that it's a new year they'll probably take $40 for their annual "account maintenance".

As you can probably see, I'm not a big Jones Fan.

 

[lssugoalie]

Depending on what you own through Jones I would be VERY careful about instructing Vanguard to "liquidate & transfer" which means Jons sells what you have and send a check. The safer route would be to have Vanguard (which is an ACAT eligible firm) request a "transfer in-kind" of what you have at Jones and then liquidate at Vanguard and buy whatever fund you want. FYI: Jones will bang you for $85 per account for a "closing fee" no matter what + now that it's a new year they'll probably take $40 for their annual "account maintenance".

As you can probably see, I'm not a big Jones Fan.

Thank you, I will definitely do that, I thought maybe if they sent me a check it would be considered a disbursement, so I was trying to avoid that. I wrote down your instructions so I won't forget. We had a small joint account (7k) we've had a long time ($ we just didn't need at the time) and I cashed that out completely for no fee since the account's still open. plan to move that into vaguard as well to max out this year. Thanks for the heads up on the fees, I'll be waiting for a bill

 

[Midpack]

Thank you, I will definitely do that, I thought maybe if they sent me a check it would be considered a disbursement, so I was trying to avoid that. I wrote down your instructions so I won't forget. We had a small joint account (7k) we've had a long time ($ we just didn't need at the time) and I cashed that out completely for no fee since the account's still open. plan to move that into vaguard as well to max out this year. Thanks for the heads up on the fees, I'll be waiting for a bill

If you've decided to go with Vanguard (great choice IMO), let them handle the transfer on your behalf. They do this all the time, and they will make sure they minimize your expenses (they can't do anything about EJ fees) and explain it to you before proceeding. I've transferred far larger amounts several times to Vanguard from another broker and from retirement accounts, all without penalty or taxes (if there are taxes or penalties they will make it clear to you before they act). Many members here have. Let them show you the best way and the other options, and then you can choose and be assured it will be handled properly. Think about it, you are moving to Vanguard, they aren't going to do anything to jeopardize their relationship as a customer, especially right off the bat. Frankly, no brokerage is going to hurt you coming aboard. And they are better equipped to deal with the "loser" firm, EJ, than any individual.

 

[easysurfer]

When I FIRE'd, my 401K, pension was held by Fidelity at w*rk. I had Vanguard for my IRA and non retirement investments so when I left w*rk, I decided to move everything from Fido to VG. Calling VG and tell my situation was a big help. The person at VG was even willing to do a 3-way call with me and Fido to make sure it got done properly. At that time, my IRA was only in one fund. So, before the move VG opened up other with zero balances as a holding place ahead of time which was nice.

Fido couldn't do a direct transfer of the money. So, instead when I liquidated everything from them, they had to send me 2 checks (one for 401K, one for pension) made out to VG and not to me -- important. Then from there I sent those (made me a little nervous -- everything I worked for on two pieces of paper) into VG . Everything went smoothly.

 

[Midpack]

When I FIRE'd, my 401K, pension was held by Fidelity at w*rk. I had Vanguard for my IRA and non retirement investments so when I left w*rk, I decided to move everything from Fido to VG. Calling VG and tell my situation was a big help. The person at VG was even willing to do a 3-way call with me and Fido to make sure it got done properly. At that time, my IRA was only in one fund. So, before the move VG opened up other with zero balances as a holding place ahead of time which was nice.

Fido couldn't do a direct transfer of the money. So, instead when I liquidated everything from them, they had to send me 2 checks (one for 401K, one for pension) made out to VG and not to me -- important. Then from there I sent those (made me a little nervous -- everything I worked for on two pieces of paper) into VG . Everything went smoothly.

I don't doubt you at all, but there may have been something special in your circumstances. I transferred my entire taxable account and 4 IRA's from Fidelity to Vanguard without ever seeing a check about 10 years ago. Assets that could be transferred in kind were, others were sold and reinvested with Vanguard.

About 6 months ago, my 401k money went from Schwab directly to my Vanguard Rollover IRA. And a small lump sum from a previous employer was transferred (coincidentally) from Fidelity to my Vanguard Rollover IRA, also in July.

I never handled a single check, didn't want to. No penalties, no taxes.

Bottom line: Talk to Vanguard, they will know what your options are far better than anyone here (especially me). You may not have to do anything...

 

[easysurfer]

I don't doubt you at all, but there may have been something special in your circumstances. I transferred my entire taxable account and 4 IRA's from Fidelity to Vanguard without ever seeing a check about 10 years ago. Assets that could be transferred in kind were, others were sold and reinvested with Vanguard.

About 6 months ago, my 401k money went from Schwab directly to my Vanguard Rollover IRA. And a small lump sum from a previous employer was transferred (coincidentally) from Fidelity to my Vanguard Rollover IRA, also in July.

I never handled a single check, didn't want to. No penalties, no taxes.

Bottom line: Talk to Vanguard, they will know what your options are far better than anyone here (especially me). You may not have to do anything...

Was your Fido money from work, or your own investments outside of work? I did the move in 2008, and remember the Fido saying, in the process, it's not like the money goes directly from instituation to institution.

 

[Midpack]

Was your Fido money from work, or your own investments outside of work? I did the move in 2008, and remember the Fido saying, in the process, it's not like the money goes directly from instituation to institution.

Not sure how you mean. The taxable account and TIRA's were/are all personal investments. The 401k and Rollover IRA's were our contributions and company matching funds. And the lump sum was a company pension (frozen in 1994).

I did have to handle checks on earlier 401k rollovers to Fido before 1994, but never again with any transaction to Vanguard.

 

[easysurfer]

Not sure how you mean. The taxable account and TIRA's were/are all personal investments. The 401k and Rollover IRA's were our contributions and company matching funds. And the lump sum was a company pension (frozen in 1994).

I did have to handle checks on earlier 401k rollovers to Fido before 1994, but never again with any transaction to Vanguard.

In my case, it may have been because Fido wasn't to original company that handled the 401K and pension. They took over only a few years before I FIRE'd.

 

[Sirka]

Fidelity IRA

In my case, it may have been because Fido wasn't to original company that handled the 401K and pension. They took over only a few years before I FIRE'd.

+1
Fido was holding 401k from work and they would not direct transfer to TD-Ameritrade. So I 1st rolled it into Fidelity IRA (there were 401k fees) and then it was all handled by TD broker.

 

[Koolau]

Not a qualified plan but simply stock: I transferred in kind from ML to Vanguard - very little drama involved. YMMV

 

[lssugoalie]

Thanks everyone for the advice. We closed down our joint account and once that's settled, I plan to move the rest. I will have Vanguard handle everything.

 

[virginia]

Transfer

Depending on what you own through Jones I would be VERY careful about instructing Vanguard to "liquidate & transfer" which means Jons sells what you have and send a check. The safer route would be to have Vanguard (which is an ACAT eligible firm) request a "transfer in-kind" of what you have at Jones and then liquidate at Vanguard and buy whatever fund you want. FYI: Jones will bang you for $85 per account for a "closing fee" no matter what + now that it's a new year they'll probably take $40 for their annual "account maintenance".

As you can probably see, I'm not a big Jones Fan.

I agree. I just recently did this, transferring assets from Ameriprise. It was really very easy. Only a couple of assets did not transfer, so I hold them now myself. All I had to do was list the accounts, and Vanguard did all the work. It's probably the single greatest cost saving measure I took all year.

 

[kz]

I just rolled some IRAs and Roth IRAs to Vanguard this morning. DH and I had too many accts at too many places and I wanted to consolidate everything to two places. (Vanguard and our local credit union) I cannot believe how easy it was. Now if something happens to me DH has just two calls to make to check on our finances. I put this off for TOO long but thanks to you guys (and everything I read here ref. Vanguard) I finally made this happen. I'm psyched!!

 

[braumeister]

You're very welcome.
Now please make out a check for 1.5% of your assets and mail it to the website administrators. Repeat annually.

 

[lssugoalie]

Update- I talked to a Vanguard rep. last week and everything went very smooth. I was on the phone for over an hour and he was so nice answering everything and giving investment recommendations. I've printed and mailed everything and now I'm just waiting for the money to arrive (and probably a phone call from our Ed. Jones guy). I'll have the hubby talk to him Thanks again to all of your advice, it was very easy.

 

[easysurfer]

Thanks for the update. Looks like another success story with Vanguard .