Please,please help with transition to Vanguard brokerage questions

[RetMD21]

Just made the transition.
The worst part was the * mandatory * revealing of your annual income and your 'liquid net worth'. They said regulations require that info. Disappointing.

Blame the SEC. You have to do it with any new brokerage account. You don't have to enter correct numbers, lol

 

[GTFan]

Transferred our remaining IRAs from Vanguard to Fido, so we're now finished with VG. I'll still have substantial positions in VG equity funds but the Fido and Schwab websites and support are much better. I use Fido Full View to see our entire portfolio with cash and everything and it mostly works well. VG has nothing to offer other than bare bones account stuff, and there was no point in keeping assets in all three brokers when I could easily get back down to two. I've never had any issues with VG btw, just feel like they've been left behind.

Pretty sure I'll always have two going forward, I'm not keeping everything in one just in case something really bad happens to one of them (or our accounts there). It actually worked out well because I now have all retirement at Fido and all taxable at Schwab, before it was a mix.

 

[RetMD21]

+1

Longtime Vanguard account holder here, but I would not recommend them over Fidelity to anyone wanting to set up a new brokerage account these days. IMHO, Vanguard's lack of support for 2FA authenticator apps and restricting ACATS transfers is reason enough to look elsewhere.

Apps make sense to me too but I use a security key and it works fine. I'm not sure how ACATS would benefit me

 

[GTFan]

ACATS is used for broker to broker securities transfers, has nothing to do with login security.

https://www.investopedia.com/terms/a/acat.asp

I don't have a prob with hardware keys except that it's just another dongle to keep track of and hopefully not lose. Phone auth apps are WAY easier.

 

[target2019]

I've re-tried the link so that I can e-sign to gain access again to her accounts. Today I have an email from Vanguard telling me I should use the link to e-sign. Same error message.

So I sent a support email telling of the problem. Lol, "Your sent message should appear in your Sent messages in an hour."

I also get an error message on my home page, where it tells me my retirement amount details are now missing, but don't worry, we'll fix that.

We decided yesterday to rollover her IRA to Schwab. We'll get that form and proceed after we open up the receiving account at Schwab. Then we'll visit the local office and speak with them about any concessions they'll offer for the transfers.

No joy from Vanguard. Got a CS response to my question about the expiring link. Their answer is they can't replicate this, and here is a long list of things to do. Try another browser, clear cookies, ya-da ya-da ya-da.

What intrigues me about CS requests is that a clear description of an error can lead to know resolution.

In addition, there are popups to transition accounts, and that is already completed. Last two logins display this mystery:
Immediate action required!

• Our system is temporarily unable to display some of your employer plan account information. We apologize for the inconvenience and appreciate your patience while we fix these issues. Please refresh in a few minutes or go to Retirement Plans.

I don't have a retirment plan, and going to that link results in another error.

I've let CS know it's time to fix these things, and I have a little patience left.

 

[John Galt III]

Vanguard should work on making their website work smoothly for these transitions. In most cases it probably doesn’t matter, but it doesn’t instill consumer confidence.

I recently transitioned one remaining account to a brokerage account. The transition went smoothly and now all my accounts are brokerage. Yet I’m still prompted by Vanguard to transition my accounts. I went through the transition link and after a couple of pages they tell me there are no accounts to transition. But on the home page, I’m still prompted to transition accounts. Why?

Minor stuff, but it feels lazy on Vanguard’s part.

I know. Same thing happened to me. I transitioned, but it still asks me to transition. Not a good look. But, sigh, I expect stuff that like everywhere these days.

 

[RetMD21]

I don't have a prob with hardware keys except that it's just another dongle to keep track of and hopefully not lose. Phone auth apps are WAY easier.

I guess I could use my phone (not authentication app) as 2 factor but I have the dongles. I don't see why I would care about ACATS.

 

[ArmchairMillionaire23]

At tax time, you will get two sets of statements. One is for your account under the old account type up to the transition date, the other for the brokerage account after. Pretty sure the latter one comes later. So don't file your taxes until you get both statements.

That's what happened to us as well the first tax season after we transitioned. Other than that, I don't remember there being many changes. I have an old 401(k) through Vanguard that did not change. We also have a Roth IRA for myself along with a taxable "play money" investment account as well as a traditional IRA for DW. (technically a rollover IRA which was created when she switched jobs after we were married)

The three non-401(k) accounts were transitioned to brokerage accounts and not much changed other than each account now has a "settlement fund" labelled the Vanguard Federal Money Market Fund with a balance of $0. I believe this fund would be used to transfer $ in/out of the accounts but since I'm not taking withdrawals yet and I'm set up for automatic investments into the IRAs each month it seems to show a balance of $0 in the settlement funds when I log on to check anything.

The OP might have a different experience due to taking funds from the accounts.

Also, I was able to have Vanguard bypass the 2FA for me since we're not mobile phone people and we still use our landline (mostly '50s - early '80s rotary) phones in the house. They had originally set it up for an automated phone call with a code to enter but since my JH retirement plan page has an aggregation page (which Vanguard does as well, and I like being able to see all my accounts on a single page) we started getting phone calls at all hours whenever the other service tried to update all the accounts. And it never failed to not recognize my device whenever my computer performed a "Windows Update". I don't miss those days.

 

[FinancialDave]

I got an email saying I need to transition to brokerage or I will incur fees. I have a mutual fund and a small inherited ira. I called them and I am more confused than ever, even after being transffered to an account specialist.

My questions after I transition are:
1. Will there be any fees going forward yearly or otherwise
2. Will there be a charge to take money out(I live on this money)
3. Will there be a charge for receiving my quarterly dividends(I live on this money)
4. Any charges on the inherited ira
5. Are there any charges period within the brokeage account.
6. Are there any tax implications when I transition to this brokage account
7. Can I keep my mutual fund

What else should I be aware of.

1. If you sign up for electronic delivery of statements and paperwork there will generally be no fees.

If you had to fees before to receive your dividends or IRA money that should not change.

No tax implications to make the transition however hopefully you realize there are tax implications in taking your annual RMD out of the IRA and receiving dividends from the mutual fund. Mutual fund dividends could have no tax implications if you income is low enough, but inherited ira withdrawals are taxed as ordinary income which you must know already, unless you just inherited it.

 

[foxfirev5]

Well it took two long wait times and several days but it looks like I've finally made the transition to brokerage for my 92 yo DM. Tonight I found out that the transition / upgrade link could not be found on her login due to her auto invest RMD plan (which we got an email today that it is being discontinued in October). After a 45 minute hold the phone rep cancelled the RMD function and just like that the transition link appeared.

It would have been nice if the first rep could have handled it. But instead told us we would have to get a mail in form to complete the process. It didn't smell right so we tried again today. While it worked out ( I think) it doesn't really give me much confidence in Vanguard. DM was ready to move on but her big cap gains in Wellesley would be costly at tax time. However I am opening a Roth IRA at Fido for my own conversions. No new money is going to go to the Walmart brokerage,

 

[Digger1000]

I am the OP. So with brokerage the only choice if you dont reinvest dividends and cg's you have to have it put in a money market settlement account. I just want to make sure, if they put the money in a market settlement account, I wont get taxed a 2nd time when I take the money out of there will I? I've never had a money market account. I live on the dividends.

 

[target2019]

I am the OP. So with brokerage the only choice if you dont reinvest dividends and cg's you have to have it put in a money market settlement account. I just want to make sure, if they put the money in a market settlement account, I wont get taxed a 2nd time when I take the money out of there will I? I've never had a money market account. I live on the dividends.

In a taxable brokerage, everything is taxed in the year it is realized. This includes gains, interest, dividends.

In a tax-deferred brokerage, everything that is withdrawn (RMDs or otherwise) is taxed.

 

[Digger1000]

In a taxable brokerage, everything is taxed in the year it is realized. This includes gains, interest, dividends.

In a tax-deferred brokerage, everything that is withdrawn (RMDs or otherwise) is taxed.

So I get taxed when they put the dividends in the money market account and then I get taxed a 2nd time when I take the money out of the money market account?

 

[ERD50]

So I get taxed when they put the dividends in the money market account and then I get taxed a 2nd time when I take the money out of the money market account?

No 2nd time. The Money Market does not have any taxable gain when you sell. They stay (normally) @ $1/share. So a dividend reinvest goes in @ $1/share, and comes out @ $1/share - zero gain, zero taxable gain.

And your wording is also off on the 1st time - dividends are not taxed 'when they are put in', they are taxed when you receive them (which could be the same day if they are auto-invested).

-ERD50

 

[VanWinkle]

I am the OP. So with brokerage the only choice if you dont reinvest dividends and cg's you have to have it put in a money market settlement account. I just want to make sure, if they put the money in a market settlement account, I wont get taxed a 2nd time when I take the money out of there will I? I've never had a money market account. I live on the dividends.

You can have the dividends and cap gains sent directly to your bank with a brokerage account. I do it every month.

VW

 

[Digger1000]

When I start filling out the switch over to brokerage from the mutual fund site it only gives me 2 options, reinvest or put it in a money market fund(I dont have a money market account btw).

 

[Gumby]

When I start filling out the switch over to brokerage from the mutual fund site it only gives me 2 options, reinvest or put it in a money market fund(I dont have a money market account btw).

Your settlement account will be held in a money market fund. At Vanguard that is VMFXX (Vanguard Money Market Reserves). You can set up withdrawals from that settlement account.

 

[VanWinkle]

When I start filling out the switch over to brokerage from the mutual fund site it only gives me 2 options, reinvest or put it in a money market fund(I dont have a money market account btw).

You will have to link your bank account to the new brokerage account. It is easy to do, and then you will have the option of sending your dividends and cap gains to your bank account directly.

VW

 

[target2019]

So I get taxed when they put the dividends in the money market account and then I get taxed a 2nd time when I take the money out of the money market account?

Is this a taxable or tax-deferred or tax-free account?

For taxable account you will get a 1099 for realized dividends.

For tax-deferred account you will not get a 1099 for realized dividends. But you will get a 1099 for what you remove from the account.

For tax-free account you will see statements and such, but nothing is taxed (unless early withdrawal).

 

[Digger1000]

Is this a taxable or tax-deferred or tax-free account?

For taxable account you will get a 1099 for realized dividends.

For tax-deferred account you will not get a 1099 for realized dividends. But you will get a 1099 for what you remove from the account.

For tax-free account you will see statements and such, but nothing is taxed (unless early withdrawal).

This is a taxable account. Its not about 1099. the question is now the form for switching to brokerage says the only way to not reinvest dividends is to send them to a money market account. Its not that way on the mutual fund platform, they just put the dividends in my bank account.

 

[target2019]

This is a taxable account. Its not about 1099. the question is now the form for switching to brokerage says the only way to not reinvest dividends is to send them to a money market account. Its not that way on the mutual fund platform, they just put the dividends in my bank account.

Reinvesting dividends is a feature you choose, right?
Not reinvesting dividends is the opposite choice, and I do not recall which is the default. My guess is to reinvest dividends is the default.

The transition means you will have a money market fund that acts as the sweep account.

Your question is, "Can I automatically push what's in my money market sweep to my bank?" Answer: I don't know. Vanguard sets that rule.
You may have to re-establish the link from your Bank to Vanguard anyways. Then you can push or pull settled money in either direction. Can you make it automatic? What you can do in transfers is determined by the cleverness of programmers at Vanguard and at your Bank.

Note that YMMV. I am just a guy on the internet who uses Vanguard and Schwab in simple ways, for the most part.

 

[statsman]

In layman's terms, what happens when the request is submitted to convert to a Vanguard brokerage account if what's currently held are a couple of Vanguard mutual bond index funds along with some cash in their money market?

 

[jollystomper]

This is a taxable account. Its not about 1099. the question is now the form for switching to brokerage says the only way to not reinvest dividends is to send them to a money market account. Its not that way on the mutual fund platform, they just put the dividends in my bank account.

Reinvesting dividends is a feature you choose, right?
Not reinvesting dividends is the opposite choice, and I do not recall which is the default. My guess is to reinvest dividends is the default.

The transition means you will have a money market fund that acts as the sweep account.

Your question is, "Can I automatically push what's in my money market sweep to my bank?" Answer: I don't know. Vanguard sets that rule.
You may have to re-establish the link from your Bank to Vanguard anyways. Then you can push or pull settled money in either direction. Can you make it automatic? What you can do in transfers is determined by the cleverness of programmers at Vanguard and at your Bank.

Note that YMMV. I am just a guy on the internet who uses Vanguard and Schwab in simple ways, for the most part.

In Vanguard, under the "buy & sell' option, you have the option to "set up automatic transfers" between Vanguard accounts and your bank linked accounts.

 

[sajohnson]

Vanguard PDF says BOTH mutual fund and brokerage accounts have $20 annual fees!:

See page 4: https://www.vanguard.com/pdf/vbafqm.pdf

Account service fee

$20 annual fee for each mutual fund
account. Refer to the applicable
Vanguard fund prospectus or
visit vanguard.com to learn about
exclusions that may apply.

$20 annual fee for each brokerage account. Refer to the
Vanguard Brokerage commission and fee schedules at
vanguard.com/commissions to learn about exclusions that
may apply.

~

The impression I have from Vanguard's recent emails that threaten to charge $20 per account is that if we are good boys and girls and transition to a brokerage account(s) there will be no fees.

Does anyone know what the truth is?

 

[jollystomper]

Vanguard PDF says BOTH mutual fund and brokerage accounts have $20 annual fees!:

See page 4: https://www.vanguard.com/pdf/vbafqm.pdf

Account service fee

$20 annual fee for each mutual fund
account. Refer to the applicable
Vanguard fund prospectus or
visit vanguard.com to learn about
exclusions that may apply.

$20 annual fee for each brokerage account. Refer to the
Vanguard Brokerage commission and fee schedules at
vanguard.com/commissions to learn about exclusions that
may apply.

~

The impression I have from Vanguard's recent emails that threaten to charge $20 per account is that if we are good boys and girls and transition to a brokerage account(s) there will be no fees.

Does anyone know what the truth is?

This link will provide some additional and (hopefully) useful detail:


https://investor.vanguard.com/client-benefits/account-fees

If you’re the primary account owner, you can eliminate the fee on brokerage accounts by signing up for e-delivery of statements and the annual privacy policy notice; confirmations; reports, prospectuses, and proxy materials; and notices, amendments, and other important account updates. In addition, Vanguard Brokerage Services does not charge the fee to clients who have an organization or a trust account registered under an employee identification number (EIN) or brokerage accounts enrolled in an advisory program serviced by an affiliate of Vanguard.