27 Year Old Needs Roth IRA Advice

[Shaw5_28]

Hello,

As I mentioned I just turned 27 and currently have a Roth IRA with Edward Jones and American Funds. I am frustrated with their fees and lack of returns and am considering moving to Vanguard index funds. Is this a smart move? Should I move the 17k I currently have or start with a fresh account? I also have a standard 401k with T.Rowe and am trying to diversify my account types with the Roth.

Your comments are appreciated.

 

[travelover]

I'd move from EJ not for the returns but to dodge the high fees. Just invest in a total stock market or total world index fund at Vanguard and forget it.

 

[MasterBlaster]

The no Brainer

Hello,

As I mentioned I just turned 27 and currently have a Roth IRA with Edward Jones and American Funds. I am frustrated with their fees and lack of returns and am considering moving to Vanguard index funds. Is this a smart move? Should I move the 17k I currently have or start with a fresh account? I also have a standard 401k with T.Rowe and am trying to diversify my account types with the Roth.

Your comments are appreciated.

well lets see...

If Edward Jones fees are 1% greater than Vanguards are (for example). Then over the next 30 or 40 years until you retire you'll have (repectively) 35% (30 years) or 49%(40 years) less money at Edward Jones than you could have at Vanguard.

This seems like a no-brainer to me.

Costs really matter over the long term even though they seem small over a given year.

 

[Animorph]

Talk to Vanguard. They will transfer your account from EJ.

Look at your funds' expense ratios compared to comparable Vanguard funds. I believe American Funds are usually pretty decent performance wise, but they charge a front-end load. You've already paid the load fee, so if you like the funds you could stay in them if EJ isn't charging you any other fees. Wanna guess why EJ steered you into funds with a front-end load? I wouldn't trust them.

 

[Shaw5_28]

Thanks

Thanks for the advice. I am currently buying class A shares
that have a 5.77% front end load. I am going to
go ahead and move the whole account to Vangaurd index funds.

 

[MichaelB]

Thanks for the advice. I am currently buying class A shares
that have a 5.77% front end load. I am going to
go ahead and move the whole account to Vangaurd index funds.

Smart move.

 

[pb4uski]

Smart move.

+1 IMO you have just significantly increased your probability of FIRE.