I have an eight year old SIMPLE IRA with Vanguard and just noticed that I can do much better. Maybe this will benefit someone else as well.
My SIMPLE IRA is restricted to "Investor Shares" instead of "Admiral Shares". For the same S&P 500 index fund, this is the difference between a 0.16% and 0.05% expense ratio. Otherwise, the underlying funds are the same.
Since my SIMPLE IRA is over 2 years old, I can rollover the entire amount to a Traditional IRA at any time without any tax implications. The Traditional IRA will allow me to invest at lower cost. Additionally, the Traditional IRA can be upgraded to a Brokerage Account to allow me to buy ETFs or stocks.
Even the 0.11% difference in the S&P 500 index fund cost erodes 1% of your total return every 10 years.
If you have under $50,000 at Vanguard, be aware that you need paperless statements to avoid other costs when pursuing this strategy.
