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Started By
Message
Roth IRA Question
Posted on 1/13/14 at 7:39 pm
Posted on 1/13/14 at 7:39 pm
I have my life insurance policies with Northwestern Mutual. They are telling me I should open the IRA with them for lower costs. However, I'm more towards opening a Vanguard IRA. Question is would you open a Roth with northwestern or Vanguard?
Has anyone opened a Roth with Northwestern?
Has anyone opened a Roth with Northwestern?
This post was edited on 1/13/14 at 7:52 pm
2
Posted on 1/13/14 at 7:45 pm to AUtigerNOLA
What funds are you interested in purchasing?
If Vanguard, they are cheaper through them. I'm sure the reverse is also true.
If Vanguard, they are cheaper through them. I'm sure the reverse is also true.
Posted on 1/13/14 at 7:49 pm to LSUtigerME
Vanguard. Majority of my portfolio of my 401k is with Vanguard.
The funds NW manages is Russell Investments. These would obviously be low cost with northwestern if I went with these funds.
The funds NW manages is Russell Investments. These would obviously be low cost with northwestern if I went with these funds.
Posted on 1/14/14 at 4:09 am to AUtigerNOLA
I just recently opened a Roth IRA through NWM. It is with American Fund though, not Russell. I would imagine opening a Vanguard though Vanguard would be the cheaper route, but maybe it costs the same and then you can have everything through NWM.
Eta: there was a 5.76% front load on this fund. What is the fee you're looking at?
Eta: there was a 5.76% front load on this fund. What is the fee you're looking at?
This post was edited on 1/14/14 at 4:11 am
Posted on 1/14/14 at 9:40 am to Sho Nuff
I cant tell if there is a front load on this fund or not. The expense ratio is .18%. No annual fee or anything if you sign on for electronic statements too.
Posted on 1/14/14 at 9:42 am to AUtigerNOLA
quote:
I cant tell if there is a front load on this fund or not. The expense ratio is .18%. No annual fee or anything if you sign on for electronic statements too.
Is that the Vanguard fund?
The fund would be required to state if it had a front load. If it's the Vanguard fund, it probably doesn't have a front load.
Posted on 1/14/14 at 9:42 am to Sho Nuff
quote:
Eta: there was a 5.76% front load on this fund. What is the fee you're looking at?
I'd like to see the board opinion on this.
This post was edited on 1/14/14 at 9:51 am
Posted on 1/14/14 at 9:43 am to Oenophile Brah
Yes this is a Vanguard Fund: VTTSX.
Yeah I dont see if stated anywhere. Thanks
Yeah I dont see if stated anywhere. Thanks
Posted on 1/14/14 at 9:47 am to Teddy Ruxpin
quote:
I'd like to the board opinion on this.
I thought there was a legal limit, and that is over the limit?
I believe 5.75 is the max. I would shop elsewhere.
Posted on 1/14/14 at 12:07 pm to AUtigerNOLA
Unless I'm mistaken, Vanguard as a company doesn't do loaded funds.
It goes against the whole mantra of going for cheap funds.
It goes against the whole mantra of going for cheap funds.
Posted on 1/14/14 at 12:26 pm to Volvagia
quote:
Unless I'm mistaken, Vanguard as a company doesn't do loaded funds.
This is correct.
So to the OP, I don't know if you will necessarily go wrong either way. If you want to manage your IRA go for it, but having some people do it for you can be a benefit. I know everyone always looks at expense ratios for mutual funds, but why would a mutual fund have a higher expense ratio? Because it is being actively managed. Always going with the lowest expense isn't necessarily the best choice (within reason of course).
just my $.02
This post was edited on 1/14/14 at 12:38 pm
Posted on 1/14/14 at 12:52 pm to GoCrazyAuburn
FWIW, Vanguard routinely puts up studies about that.
They believe THE retirement keys are time in market, low cost, and asset class diversification.
Not nesscessarily what exactly you invest in.
They show studies of how well actively managed funds compared to their benchmarks over multiple years, and suddenly that half percent more of the account you are spending seems wasted.
frick all loaded funds, and I get antsy if the expense is more than .8
They believe THE retirement keys are time in market, low cost, and asset class diversification.
Not nesscessarily what exactly you invest in.
They show studies of how well actively managed funds compared to their benchmarks over multiple years, and suddenly that half percent more of the account you are spending seems wasted.
frick all loaded funds, and I get antsy if the expense is more than .8
This post was edited on 1/14/14 at 12:55 pm
Posted on 1/14/14 at 1:23 pm to Volvagia
I'm not necessarily disagreeing with that. However, I can make a study look however I want it to look. There are advantages of investing in actively managed mutual funds. Now, there is definitely an argument against it, don't get me wrong, but there is a reason Vanguard is working to try and get people away from investing in those actively managed funds.
And if you know what you are doing with your investments, I can agree with this to a large degree. I generally go with lower expense funds as well, but I don't disregard a fund just because its expense is higher. If it is justified, I have no problem using it. However if you are someone who is financially illiterate (which is honestly most people), it isn't necessarily a bad thing.
quote:
frick all loaded funds, and I get antsy if the expense is more than .8
And if you know what you are doing with your investments, I can agree with this to a large degree. I generally go with lower expense funds as well, but I don't disregard a fund just because its expense is higher. If it is justified, I have no problem using it. However if you are someone who is financially illiterate (which is honestly most people), it isn't necessarily a bad thing.
This post was edited on 1/14/14 at 1:24 pm
Posted on 1/14/14 at 1:47 pm to GoCrazyAuburn
quote:
However if you are someone who is financially illiterate (which is honestly most people), it isn't necessarily a bad thing.
Agreed. Some of my friends have no idea how to manage their money. Its amazing how many people are financially illiterate.
I like to manage my IRA myself. I just wanted someone's take on having it with Northwestern, if there are any perks vs doing it yourself with Vanguard. I guess it just depends on the person.
This post was edited on 1/14/14 at 1:48 pm
Posted on 1/14/14 at 2:03 pm to AUtigerNOLA
Well, the obvious perk would be having an adviser that can help you. You would have access to Russel Funds like the LifePoints fund. If that is a value to you, then going with them might make sense. As you said though, like everything in finance,
ETA: I can't remember if Vanguard does break points, but that could be something to think about too.
quote:
it just depends on the person.
ETA: I can't remember if Vanguard does break points, but that could be something to think about too.
This post was edited on 1/14/14 at 2:41 pm
Posted on 1/14/14 at 5:35 pm to Volvagia
quote:
Unless I'm mistaken, Vanguard as a company doesn't do loaded funds.
They don't under the Vanguard family of funds, but one can choose from a huge menu of external fund families through a Vanguard brokerage account. Many insitutional class funds with lower ERs are available for $25k initial purchase compared to $100k or $1M minimums at other firms. I own a international value fund through a VBS account which has a ER well above Vanguard's international value which has smoked the Vanguard fund returns, especially in down years, but in general I agree with low costs as a long term objective.
Posted on 1/14/14 at 6:11 pm to GoCrazyAuburn
Thanks for the link. I just went back and checked and it is 5.76% on the statement I got from NWM.
I actually called my adviser a few days ago when I got the statement and asked about the front load saying I didn't realize an IRA had such a high fee. He said "these are A shares and you're going to pay the fee one way or the other". I mentioned having opened an IRA years ago at my local FCU and didn't remember any up front costs like that where my balance actually started lower than I put into it. He said "you will pay an annual % on those and after about 5 years the A shares route is more cost effective".
Anyway, now I'm annoyed about this. It's only .01% but WTF? Could it be a typo?
I actually called my adviser a few days ago when I got the statement and asked about the front load saying I didn't realize an IRA had such a high fee. He said "these are A shares and you're going to pay the fee one way or the other". I mentioned having opened an IRA years ago at my local FCU and didn't remember any up front costs like that where my balance actually started lower than I put into it. He said "you will pay an annual % on those and after about 5 years the A shares route is more cost effective".
Anyway, now I'm annoyed about this. It's only .01% but WTF? Could it be a typo?
This post was edited on 1/14/14 at 6:14 pm
Posted on 1/14/14 at 6:25 pm to GoCrazyAuburn
quote:
I generally go with lower expense funds as well, but I don't disregard a fund just because its expense is higher. If it is justified, I have no problem using it.
I have a Fidelity account and have funds I manage on my own there. They have like 2k funds without transaction fees and low expense ratios (.8).
But since I was doing an annuity through NWM, I figured I would also open an IRA and have it managed by them. I was completely surprised to see the front load as he didn't say anything about it beforehand. I am definitely not a savvy financial investor yet, but I am not completely illiterate so not sure what to say right now about this 5.76% stuff. I admit to not knowing enough at all about the different IRA's and figured it would be similar to what I did on my own before.
Guess I need to send him an email..
Posted on 1/14/14 at 6:27 pm to Sho Nuff
Yea, a shares are front end loaded. There are back end as well, and of course an annual fee on some funds as well. There are always fees with these type of mutual funds where an adviser is the only one who can sell them.
I don't know what is up with the 5.76. That is quite strange.
I don't know what is up with the 5.76. That is quite strange.
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