I’m trying to get myself out of some terrible Ameriprise accounts I set up – and I need some advice.
A few years ago, I stupidly rolled over my 401(k) account to Ameriprise when I changed jobs. My spouse had a few accounts there (several stocks purchased years ago, as well as Roth IRA contributions for several years), and I liked the idea of consolidating our money into one place. Once there, I was really underwhelmed by the service and knowledge of the people I spoke with. It all seemed rather … scammy to me. But I didn’t listen to that little voice in my head, and I not only rolled over my 401(k) … I also purchased life insurance and disability insurance through RiverSource, which is their proprietary insurance company. (I know, I know.)
When I started educating myself here and elsewhere about the exorbitant fees, I was, frankly, embarrassed that I’d let myself get suckered into this. (Believe me, you can’t facepunch me harder than I’ve facepunched myself.) For a few months, my shame has caused me to look the other way on this whole mess. But now, I’m determined to tackle this problem head-on and unwind my investments in Ameriprise. I’ve read the boards here, I have a copy of JL Collins’s book, and now I’m ready to take the leap. I have a plan, but now I’m getting nervous about making another costly mistake. Has anyone else out there been through this? Does my plan of action seem right?
1) I have a Vanguard account in place – currently a Roth IRA (mine) and a brokerage account (ours jointly -- invested in VTHRX).
2) I will open a traditional IRA via Vanguard to accept the rollover.
3) I will then call Ameriprise and ask them to issue a check for the amount in my 401(k) rollover IRA, payable to “VFTC fbo My Name” – which I will then send to Vanguard. I spoke with a Vanguard rep on the phone, and they said that this will ensure that it’s a true rollover (not a payout, so no unexpected tax implications).
4) Once I get my traditional IRA out of Ameriprise, I’ll work on extricating my spouse’s accounts: A) a Roth IRA, B) a traditional IRA, C) some stocks he’s had forever (bought with his dad, which is why we had this account in the first place). All these accounts are quite a bit smaller than that first account, so they are no less important, but feel less urgent.
5) I also plan to discontinue my disability insurance – the premium is due in October, so I’ll cancel that then. I will also discontinue my life insurance, since I have sufficient coverage (for free!) via my job. I may keep my spouse’s life insurance policy, since he does not have similar coverage via his job, and the policy seems to be pretty cheap (less than $300 annually for a $250K death benefit).
Has anyone else been through this – are there any red flags you’re seeing here?