Author Topic: Schwab PCRA Fees  (Read 2614 times)

HPLustcraft

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Schwab PCRA Fees
« on: June 10, 2018, 05:16:19 PM »
Hello!

I just took hold of the reins of my 401K.

My 401K is in Wells Fargo, but I put everything into the Schwab PCRA so I could have more control (and get out of the High ER funds they had as the only choice)

Soon all of it will be in several Vanguard funds...But my question is about future contributions.

Including the company match, I have a bit more than $1,000 a month (so far, still getting my Mustachian way of life together) going into this 401K.

The problem is that Schwab charges $50 per purchase order for the Vanguard funds. Too many of those and the savings because of the low ER is kind of wiped out.

But if I let the money just build up and sit there, it's not invested and it's not making any gains, also something I want to avoid.

Is there anything I can do other than eating the $50 per transaction or letting the money lay fallow?

Thanks!

L-

MrUpwardlyMobile

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Re: Schwab PCRA Fees
« Reply #1 on: June 10, 2018, 05:26:56 PM »
Hello!

I just took hold of the reins of my 401K.

My 401K is in Wells Fargo, but I put everything into the Schwab PCRA so I could have more control (and get out of the High ER funds they had as the only choice)

Soon all of it will be in several Vanguard funds...But my question is about future contributions.

Including the company match, I have a bit more than $1,000 a month (so far, still getting my Mustachian way of life together) going into this 401K.

The problem is that Schwab charges $50 per purchase order for the Vanguard funds. Too many of those and the savings because of the low ER is kind of wiped out.

But if I let the money just build up and sit there, it's not invested and it's not making any gains, also something I want to avoid.

Is there anything I can do other than eating the $50 per transaction or letting the money lay fallow?

Thanks!

L-

Schwab offers funds that are more or less comparable to Vanguard funds and, in many cases, schwab funds will be lower ER and schwab won’t charge transaction fees for its funds.

HPLustcraft

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Re: Schwab PCRA Fees
« Reply #2 on: June 10, 2018, 06:18:23 PM »
Hello!

I just took hold of the reins of my 401K.

My 401K is in Wells Fargo, but I put everything into the Schwab PCRA so I could have more control (and get out of the High ER funds they had as the only choice)

Soon all of it will be in several Vanguard funds...But my question is about future contributions.

Including the company match, I have a bit more than $1,000 a month (so far, still getting my Mustachian way of life together) going into this 401K.

The problem is that Schwab charges $50 per purchase order for the Vanguard funds. Too many of those and the savings because of the low ER is kind of wiped out.

But if I let the money just build up and sit there, it's not invested and it's not making any gains, also something I want to avoid.

Is there anything I can do other than eating the $50 per transaction or letting the money lay fallow?

Thanks!

L-

Schwab offers funds that are more or less comparable to Vanguard funds and, in many cases, schwab funds will be lower ER and schwab won’t charge transaction fees for its funds.

Doh! I wish I would have known that before buying the Vanguard funds!

So do I just leave those alone and start putting the money into Schwab funds instead?

L-

jacoavluha

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Re: Schwab PCRA Fees
« Reply #3 on: June 10, 2018, 08:48:54 PM »
I would never pay a $50 transaction fee for a $1,000 investment. Find out what you can trade for free. You can’t control returns but you can control costs and taxes.

Radagast

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Re: Schwab PCRA Fees
« Reply #4 on: June 10, 2018, 10:03:47 PM »
I would never pay a $50 transaction fee for a $1,000 investment. Find out what you can trade for free. You can’t control returns but you can control costs and taxes.
Definitely. Schwab has many good funds that carry no load, no fee, and low expense ratios. Even more so if you can buy ETFs.

MustacheAndaHalf

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Re: Schwab PCRA Fees
« Reply #5 on: June 11, 2018, 08:42:27 AM »
Vanguard refuses to provide what are essentially kickbacks, and that results in the higher cost for certain Vanguard mutual funds.  But Vanguard ETFs are available for purchase as stocks - can you buy Vanguard ETFs, instead?  Look for VTI, VXUS, or BND and see if you can buy those.

But Schwab offers some competitive funds of it's own, like SCHB for the Broad US Market with a low expense ratio (0.03%).  You could buy SCHB with future contributions.

Next time you're faced with fees, change them into a percentage.  How long would it take to overcome an additional 5.00% expense?  ($50 / $1,000)  If you switch plans 5 years from now, even over 5 years that's expensive.

HPLustcraft

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Re: Schwab PCRA Fees
« Reply #6 on: June 12, 2018, 08:45:11 AM »
Vanguard refuses to provide what are essentially kickbacks, and that results in the higher cost for certain Vanguard mutual funds.  But Vanguard ETFs are available for purchase as stocks - can you buy Vanguard ETFs, instead?  Look for VTI, VXUS, or BND and see if you can buy those.

But Schwab offers some competitive funds of it's own, like SCHB for the Broad US Market with a low expense ratio (0.03%).  You could buy SCHB with future contributions.

Next time you're faced with fees, change them into a percentage.  How long would it take to overcome an additional 5.00% expense?  ($50 / $1,000)  If you switch plans 5 years from now, even over 5 years that's expensive.

I checked, and it looks like I CAN buy Vanguard ETFs...All of the ones you mentioned are available to me.

I can also purchase all of the comparable Schwab funds with the low ER.

Since it costs nothing to sell, and also nothing to buy the Schwab funds on the Schwab site, would it be better to just liquidate my Vanguard funds and go with all Schwab equivalents in my situation?

I believe I can set the Schwab funds to Auto-Invest, but I am totally willing to pay attention each paycheck and buy if something has gone lower.

L-

PS - I should have looked at that fee to start with. Math Fail! :-(