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Question regarding my IRA investment fees
Posted on 4/18/16 at 10:36 am
Posted on 4/18/16 at 10:36 am
I'm currently invested in 4 no-load funds with expense ratios that range from .70 to .96 each, and management fees that are roughly 0.80 each. I have about $40k invested between these four funds.
I also have a brokerage account that is invested in BALCX (American Funds). The balance is around $9k. Here are the expenses for this fund:
0.23 Annual mgmg fee
0.15 other
1.00 12b-1
1.38 expense ratio
I'm just wondering, should all of this be acceptable, or should I look at other options?
Following some of the advice on this board, I was planning on jumping into some vanguard funds as well to supplement anything I do.
I also have a brokerage account that is invested in BALCX (American Funds). The balance is around $9k. Here are the expenses for this fund:
0.23 Annual mgmg fee
0.15 other
1.00 12b-1
1.38 expense ratio
I'm just wondering, should all of this be acceptable, or should I look at other options?
Following some of the advice on this board, I was planning on jumping into some vanguard funds as well to supplement anything I do.
3
Posted on 4/18/16 at 10:58 am to meeple
Most will tell you "No, it's not acceptable."
There is a thread on the first page about a guy needing Roth advice. He's with Edwards Jones and pays high fees.
Go with a low expense ratio and NO other fees. You can find this at Vanguard and probably at Fidelity too (I can't vouch for them).
My highest Vanguard expense ratio is .16
There are NO management fees. You need a little bit of knowledge to manage your own money, but not much...stick it in an index or target retirement fund and let the market do the work.
So yes, jump into some Vanguard funds and transfer all the other ones. Be happy you did it at 40k rather than 400k or 4 million.
There is a thread on the first page about a guy needing Roth advice. He's with Edwards Jones and pays high fees.
Go with a low expense ratio and NO other fees. You can find this at Vanguard and probably at Fidelity too (I can't vouch for them).
My highest Vanguard expense ratio is .16
There are NO management fees. You need a little bit of knowledge to manage your own money, but not much...stick it in an index or target retirement fund and let the market do the work.
So yes, jump into some Vanguard funds and transfer all the other ones. Be happy you did it at 40k rather than 400k or 4 million.
This post was edited on 4/18/16 at 10:59 am
Posted on 4/18/16 at 12:40 pm to bayoubengals88
quote:
Go with a low expense ratio and NO other fees. You can find this at Vanguard and probably at Fidelity too (I can't vouch for them).
Or if you really want to do nothing you can go with a roboadvisor like Betterment or Wealthfront till you understand it all a little better. Your fees there or going straight to Vanguard or Fidelity will be a fraction of what you are doing now.
Posted on 4/20/16 at 3:52 am to LSUDbrous90
Would it be wise to transfer everything over to a vanguard target date fund or other?
Is there something that does explain the impact of fees?
Is there something that does explain the impact of fees?
Posted on 4/20/16 at 8:04 am to meeple
quote:
transfer everything over to a vanguard target date fund
There's nothing wrong with having a target date fund, I have one as well but there's more to investing than this one size fits all approach... so much more
Posted on 4/20/16 at 9:09 am to meeple
quote:
1.00 12b-1
Run. Fast.
Posted on 4/20/16 at 9:21 am to Joshjrn
High fees but that isn't always the end of the story. Performance is net of fees so if you have the option of a cheap fund with ok performance or an expensive fund with top tier performance the expensive one could still be the better option.
For those less inclined to doing their own research I would echo the advice of others, buy a cheap index fund and let it ride all the way to retirement.
I disagree on the target date fund recommendation. I think they are built on broken glide paths based on the falling rate environment of the last 30 years. I don't think most retirement investors can afford to have substantial portions of their assets invested in bonds earning 2% for a 10 to 15 year span.
For those less inclined to doing their own research I would echo the advice of others, buy a cheap index fund and let it ride all the way to retirement.
I disagree on the target date fund recommendation. I think they are built on broken glide paths based on the falling rate environment of the last 30 years. I don't think most retirement investors can afford to have substantial portions of their assets invested in bonds earning 2% for a 10 to 15 year span.
Posted on 4/20/16 at 11:21 am to meeple
those are all relatively high fees.
If you're looking for comparative Vanguard funds, you can search here. LINK
quote:You also have an 82% turnover which will increase capital gains and your taxes in this brokerage account
I also have a brokerage account that is invested in BALCX (American Funds). The balance is around $9k. Here are the expenses for this fund:
0.23 Annual mgmg fee
0.15 other
1.00 12b-1
1.38 expense ratio
If you're looking for comparative Vanguard funds, you can search here. LINK
Posted on 4/20/16 at 11:39 am to meeple
quote:Good starting point LINK
Is there something that does explain the impact of fees?
taking the average of your 4 IRA funds (.83% exp. ratio) vs Vanguard Total Stock Mkt Index Admiral shares (.05%)+ Vanguard Total Bond Mkt Index Admiral (.07%) avg. expense ratio of .06 over 30 years and a 10% annual return
Posted on 4/20/16 at 1:17 pm to meeple
Definitely. What you are paying now is not worth it. As the poster above said switch it over to Vanguard or Fidelity with much lower fees. Or as I suggested as well be completely hands off with a roboadvisor.
I know that FeeX will give you some information on fees. You can also link your accounts up to Personal Capital which is great if you want to link essentially all of your assets. They have a great 401k/Investment fee graphic. But going with a low expense ratio on the index fund will help you a lot.
I know that FeeX will give you some information on fees. You can also link your accounts up to Personal Capital which is great if you want to link essentially all of your assets. They have a great 401k/Investment fee graphic. But going with a low expense ratio on the index fund will help you a lot.
This post was edited on 4/20/16 at 1:19 pm
Posted on 4/20/16 at 1:55 pm to Maderan
I don't care how good past performance is, if someone is charging you 1% as an advertising fee, fricking run. Run fast. Run far.
Posted on 4/20/16 at 3:12 pm to LSUDbrous90
(no message)
This post was edited on 4/20/16 at 11:16 pm
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