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Decision Made – I Am Moving All Of Our Accounts To Vanguard

August 16th, 2008

NCN

Yesterday, I mentioned that I was thinking about moving all of our retirement and education savings accounts to one brokerage, Vanguard. Spurred on by this comment from reader Matt, I did a little more research, and I have decided to make the move.

Vanguard offers enhanced services for customers who qualify. Qualification for these services is based on total household assets held with Vanguard. For complete details, check this page from the Vanguard website.

To qualify for Vanguard Voyager Services, a minimum of $100,000 is required.

To qualify for Vanguard Voyager Select Services, a minimum of $500,000 is required.

To qualify for Vanguard Flagship Services, a minimum of $1,000,000 is required.

From the Vanguard website:

We determine membership by aggregating assets of all eligible accounts held by the investor and his or her immediate family members who reside at the same address, including investments in Vanguard mutual funds, Vanguard ETFs, annuities through Vanguard, The Vanguard 529 Plan, certain small-business accounts, and employer-sponsored retirement plans for which Vanguard provides record keeping services.

As an added bonus, once I’ve accumulated $100,000 in a single fund, in a single account, I’ll qualify for Vanguard Admiral Shares, which have lower expense ratios than do standard shares.

As soon as I publish this post, I’m going to begin the transfer process. Wish me luck!

Posted in Retirement

Tags: Investing, Resources, Retirement

15 Comments »

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

August 15th, 2008

NCN

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.

Posted in Retirement

9 Comments »

Setting Up Automatic Contributions To Retirement And Education Savings Accounts

August 11th, 2008

NCN

I’ve just spent a few minutes setting up automatic contributions to my Roth IRA, my wife’s Roth IRA, and three Education Savings Accounts (one for each of our children).

Contributions to these types account can be made any time between January 1st of one year and April 15th of the next year. So, I have until April 15th, 2009 to fully-fund both Roth IRAs and the three ESAs.

There is a four month period of time – between January and April of each year – when contributions can be made for the prior year or the present year. When making a contribution, always make a notation of the year with which the contribution should be associated. You don’t want to send in a contribution for 2008 and have it count towards 2009’s contribution limit, or vice versa.

Personally, I’m going to push myself and try to get all of my contributions in before December 31st. That way, I can hit the ground running in 2009 and I won’t have to deal with the period of overlap. But, if I can’t scrape together all of the money that I need between now and then, it’s good to know that I have the four month cushion. Of course, if I bleed over into 2009 with my 2008 contributions, my 2009 contribution schedule will be affected.

For our family, our Roth IRA limits are $5000 for me and $5000 for my wife, and $2000 for each of our three kids. (I’ve already fully-funded my Roth IRA for 2008. Between now and December, I’ll be working hard to fully-fund my wife’s Roth IRA and the three ESAs)

Here’s the current contribution breakdown (with my own December 2008 deadline) -

2008	Wife’s Roth	ESA 1	ESA 2	ESA 3
August	1000	400	400	400
September	1000	400	400	400
October	1000	400	400	400
November	1000	400	400	400
December	1000	400	400	400
Totals	5000	2000	2000	2000

Here’s the backup contribution breakdown (with the actual April 2009 deadline) -

2008	Wife’s Roth	ESA 1	ESA 2	ESA 3
August	555.56	222.22	222.22	222.22
September	555.56	222.22	222.22	222.22
October	555.56	222.22	222.22	222.22
November	555.56	222.22	222.22	222.22
December	555.56	222.22	222.22	222.22
2009
Jan	555.56	222.22	222.22	222.22
Feb	555.56	222.22	222.22	222.22
Mar	555.56	222.22	222.22	222.22
Apr	555.56	222.22	222.22	222.22
Totals	5000	2000	2000	2000

The automatic contributions will be made from my primary checking account and have been scheduled to be withdrawn on the day after I deposit my monthly paycheck.

Posted in College, Retirement

5 Comments »

Midyear Retirement Funding Checkup (One Month Late): Taking A Look At My 2008 Contribution Goals

August 2nd, 2008

NCN

Back in December, I posted my financial goals for 2008. I thought it my be interesting to see how I’ve done, seven months into the year. The chart below details my retirement and education savings contribution goals.

Account	Amount	Progress
My 403b	$15,500	$9,041
My Wife’s Pension	$2,000	$1,166
Daughter’s ESA	$2,000	$0
Son’s ESA (‘07,’08)	$4,000	$0
My Roth	$5,000	$5000
My Wifes’ Roth	$5,000	$0
Total	$33,500	$15,208

The pretax contributions highlighted in yellow are automatically withdrawn from our paychecks. Those in green are contributions to Education Savings Accounts for our kids. As you can see, I haven’t contributed to their ESAs yet, and I actually missed the opportunity to fund my son’s ESA for 2007. The contributions highlighted in pink are after-tax contributions to our Roth IRAs. We fully-funded my Roth IRA back in January and we hope to fully-fund my wife’s Roth IRA in December.

By the way, my goals for my retirement contributions are based on the maximum allowable contributions for 2008. Click here for information about 403b and Roth IRA contribution limits for 2008.

Posted in 2008 Goals, Retirement

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A Fully-Funded Roth IRA At Age 18 Could Net You 3.5 Million Dollars

June 16th, 2008

NCN

This post is part of the Money Blog Network monthly project – Finances at Graduation

Dear High School Graduate:

I’ll keep this short and sweet. One day, you’ll probably want to retire. But, in order to do so, you are going to need money – and lots of it. Do yourself a huge favor. Open up a Roth IRA and do your very best to fully-fund it. Need some motivation?

Here’s a chart depicting what could happen if you invested just $5000 at the age of 18 – left it alone – and withdrew it at the age of 72.

As you can see, rate of return is a big deal. I encourage you to read one of my favorite books – The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Book Big Profits) – It will help you understand the stock market and rates of return.

Please note, the calculations above are based on a single $5000 contribution, made at the age of 18.

Imagine if you made $5000 contributions, each year, until the age 72 -

Wow. Even at a conservative return of 9%, your ending balance would be over 6 million dollars. Pretty cool. And, if you get ‘lucky’ – you’ll have more than 31 million dollars with which to play!

There are several ways to open a Roth IRA. Visit your local bank and ask them about opening a Roth IRA – or do it yourself, online, at sites like TradeKing or Vanguard.

I realize $5000 is a lot of money – especially when you are 18. But, look at the potential rewards!

One final note – Money inside of a Roth IRA grows tax free! That’s right. Pay taxes now, while your tax rate is relatively low, and watch your contributions grow and grow and grow. Then, when you are ready to retire, you can withdraw money from your Roth IRA – and you will not have to pay taxes on those withdrawals.

Your debt free friend,

NCN

This article is part of the MBN Group Writing Project on finances at graduation. Be sure to check out the other contributions to this project:

Consumerism Commentary – Financial Tips for College Graduates
Free Money Finance – Money Advice for Graduates
Get Rich Slowly – Personal Finance Made Easy
Mighty Bargain Hunter – Graduates, You Might be Shocked
No Credit Needed – A Fully Funded Roth at Age 18
Wise Bread – My Best Advice for New Graduates
Five Cent Nickel – Four Tips For Recent Graduates