Stuck Trying To Decide What To Do About My Retirement And Education Savings Accounts

Aug 15 2008

Posted by NCN as Retirement |

I’ve spent the last few hours trying to decide what to do with our retirement and education savings accounts. As it stands, my wife and I have our Roth IRAs with one brokerage, my daughter’s ESA is with a second brokerage, and my SEP-IRA is with a third. I’d love to move them all to one brokerage, Vanguard perhaps, but I don’t know if it’s worth the hassle - and the fees - associated with moving them.

I’ve also spent some time thinking about our asset allocation. Right now, we’re invested in a hodgepodge of index-based mutual funds and exchange-traded funds (ETFs). I need to reread Nickel’s post about managing asset allocation across multiple brokerages.

I really haven’t decided what I’m going to do, but I wanted to get my thoughts out of my head and onto the screen. I also need to open two more ESAs, one for my son and one for our newborn, but, I’m not going to do that until I have decided whether to consolidate with one brokerage or not.

Decisions, decisions. If you have any suggestions, I’d love to hear from you. Simply leave a comment and let me know what you would do in a similar situation. Would you move all of your accounts to one brokerage? How do you track your investments, especially if they are with different brokerages?

Side Notes - I hope you like the new logo at the top of the site. It was designed by Pete from over at Bible Money Matters and Blog Logos. I think he did an awesome job, and I really dig the bold black and red design. Also, I’ve added a new dedicated search page to the site. Hopefully, it will make the site a bit more user-friendly.

9 Responses

Laura

August 15th, 2008 at 10:09 pm
1

Pete did another great job. He created my logo and I’m happy!
Kevin

August 16th, 2008 at 12:09 am
2

I would consider all the retirement accounts as one big portfolio, develop an overall plan and asset allocation, then buy specific funds in each account according to that master plan. Often when you do that, the smaller accounts can stay simple and only hold a single fund.

The ESAs have very different horizons and risk tolerances, so I would develop a separate plan for each.

If the expense ratios are high at your current brokerages, then that will make up for the transaction costs very quickly. If the ERs are comparable to Vanguard’s then there may not be a significant financial benefit to transferring. However I find it very convenient to keep everything I can there. I only need to keep one company’s funds and policies in my head, and it’s aesthetically clean and simple. If it were me I’d move it all to Vanguard.

I am a “fiddler” and have learned that I’m best served by a dead simple allocation with 3 or 4 funds, and would recommend the same. I’ve received a lot of helpful advice at the Boglehead forum, you might try asking this question there.
EN

August 16th, 2008 at 6:05 am
3

So how much actually would it cost to consolidate?
jim of Blueprint for Financial Prosperity

August 16th, 2008 at 7:54 am
4

I have nearly all of my accounts at Vanguard, the only one I don’t have is my Roth IRA at TDAmeritrade because I trade individual stocks in that account and Vanguard is expensive for that.

It should only cost $50 or so an account (at least for Roth) to transfer it depending on where the accounts… it’s worth it though, makes everything much easier.
Laura

August 16th, 2008 at 9:13 am
5

My husband and I are going to consolidate some of his retirement accounts. We’re looking into rolling over everything into a Vanguard IRA. We also have to choose the funds for his 401(k). We’ll be glad when it’s done as we tend to set it and forget it. (We check 3x a yea.r)
NCN

August 16th, 2008 at 9:47 am
6

It would cost $50 per account for each transfer… so, we’re looking at $150 or so… but, then i have to worry that everything goes smoothly… still not sure what i’m going to do…
Matt

August 16th, 2008 at 12:00 pm
7

You should definitely consolidate your account. Once these accounts grow in value, at say Vanguard, you will eventually hit a limit which increases your clout within the organization.

For example, at Vanguard you can purchase Admiral Shares which have a lower expense ratio. It’s a way of rewarding their high value customers, and I would certainly recommend Vanguard. I even get a direct customer service line to a specific customer service agent I’ve worked with for the past 5 years.

I’ve had my account there since my 20s, but when I rolled my former 401k into my Roth IRA, I paid zero charges and a Vanguard rep walked me through every single possible step.
NCN

August 16th, 2008 at 12:40 pm
8

@Matt… if my wife has a roth and i have a roth and i move them all to vanguard… will they credit me as having more clout, or will we be considered two different customers? does that make sense?
soflest

August 16th, 2008 at 1:18 pm
9

I would transfer all accounts to one broker as I find it alot easier to update online from one source.

I track all our investments on a spreadsheet and update prices daily. The net result is I see all our investments accounts rolled together as one entity and make asset allocation decisions based on the total picture.

I also have all our other assets, liabilites, income and expenses listed on the spreadsheet so I know our net worth on a daily basis.