Jumping Ship: Moving Roth IRA to Vanguard

Last week I decide to pull the trigger on moving my Roth IRA from Edward Jones to Vanguard. I have been contemplating doing this for a while, but just did not have the time to do it. One of the main reasons for switching the account over is so that I could have more control. I also wanted to make sure that I do my research and find out which investments are right for me. 

I opened my Roth IRA in 2005 with Edward Jones with a tax return I had received. One of the first things I learned by opening this account was that the adviser was selling me on buying a fund with a front load of over 5%. I spoke with my father and we decided to go with a 1.45% load upfront with no yearly charge. Recently Edward Jones was getting rid of the fund I was investing in and I had to choose another one. Again I was was sold on changing over to a Fund which has a 5.75% load charge. With seeing how Vanguard's low investment cost are was the main factor that lead me away from Edward Jones and to take control of all my investment's myself.

One other thing that I learned as well with switching over is that the funds I have, have a fee if I moved money out of the fund before 7 years. It comes out to about between $140-160, which I don't want to lose, but in the long run I think it will be the best choice, especially since this year one of my goals is to max out my Roth. With keeping an Edward Jones account I have a yearly fee for them managing my account for around $40. I think I can make it up in the long run and no need to pay the extra fee when I could be investing that money.

It would not be fair to Edward Jones if I did not admit that I had a good experience using them. My adviser called me every quarter to check on me and told me some investments he liked. He was never pushy and he told me to reach out to him if I had any questions or investments I wanted him to check into. I believe Edward Jones is a great company for someone who isn't interested in doing all the work and don't mind someone else managing their money. Just with starting to look more closely to all my investments I feel this is the best decision for me and that it can save me some money in the long run.

Making the change over to Vanguard so far has been very nice experience, their customer service helped me with transferring everything over. They stayed on the phone with me and walked me step by step through the process. I have heard many bloggers speak highly of Vanguard and I am looking forward to my Roth being with Vanguard. If it is as good as I hope it is, I will be transferring my old 401k to a Vanguard IRA as well where I can mange most of my investments in one place instead of all over the place as of right now.

Did I make the right decisions? Let me know, also I have about 19 days before the money is completely transfered, I am researching different funds to purchase once the money is there. If you have any that you like leave me a comment and I will research it!

401k vs Roth IRA - Round 2

So today I finally looked into what my best option was for either putting money into my company 401k or Roth IRA. I went and did some research on my companies HR site and found out that they are only matching up to 5% and not monthly but at the end of the year.

I'm not sure they will match until later but dont want to miss out if they decide to this year. I am currently putting in 8%, so this knock-down drag out fight still looks to be a draw. I dropped my contributions back to 5% and hopefully the company will match at the end of the year. In the meantime I will put the extra 3% in with my monthly contributions to my Roth. At the end of the day I still think this is the best decision and hopefully this will get me closer to my 2009 goal of maxing out my Roth. I also have my fingers crossed that the economy will turn around and will get my 5% matched come years end.

Does my adviser have my best interest in mind?

So my adviser calls me the other day and tells me that with my Roth IRA they are getting rid of the Capital World Growth & Income CI B Fund that I am currently contributing to. He then proceeds to ask me if I would like to replace it with the A Fund which is a front load of 5.57% or if I would like the C fund that has no upfront cost but a yearly fee of 0.75%. I asked him which he recommended. He advised me if I was going to keep in it long term to go with the front load, so I should put it in the A Fund...I took him at his word.

I started to think if it was the right decision and did some calculations. I am currently putting in 100.00 a month(setting aside another hundred/per month for investments) and with the front load of 5.75%, about $94.25 goes into the fund? I thought IM PAYING ALMOST 6% UP FRONT? The fund would have to make 6%+ for me to break even? To me that doesn’t make much sense? Especially now that I am losing 10-20% month. I will be checking these funds and I am not planning to keep for the long haul so the upfront load would be a bad investment.

I am currently looking into opening another Roth IRA with a no-load fund and no fee where I can invest and build a portfolio of low cost, diversified funds. I mean in the end I can do all this investing myself with a little research without the yearly fee to the advisor?

The showdown 401k vs Roth IRA?

Recently my company cut back on matching my 401k while the economy is upside down. I feel like I am at a bout (temporarily) with investing in my retirement…which one of these is the strongest investment at this current time.

Currently I am putting around 8% of my pay check into my 401k which is actually not losing money at the moment. It will come out to about $6160.08 at the end of the year. This money is also pre-taxed and by making pre-tax contributions, I am lowering my current taxable income.

With my Roth IRA which is after tax contributions, I am currently putting away $200.00/month = $2400.00/year with the limit on the Roth capped at $5000.00.

I am trying to figure out which should win this round? Maybe cut back 2% on my 401k which would put an additional $1540.00 in my Roth for a total of $3940.00/year and making my 401k total to $4620.00/year.

I know once my company starts matching again that I will bump it back up. During the meantime do I add more to my Roth or keep everything where it's at? I will keep you posted I need to do some more research. Please leave feedback!