Author Topic: Retirement Accounts  (Read 2522 times)

GardenBaker

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Retirement Accounts
« on: May 23, 2016, 09:52:15 AM »
Here's my dilemma and a bit about me:



Retirement Savings:

Edward Jones ROTH $26K
I'm $3,500 from maxing this account out this year.
Invested in the following:
AMCAP FUND CL A 
CAPITAL WORLD GROWTH & INCOME FUND CL A
FUNDAMENTAL INVESTORS FUND CL A 
INVESTMENT COMPANY OF AMERICA FUND CL A 
NEW ECONOMY FUND CL A
SMALLCAP WORLD FUND CL A

Edward Jones Taxable Account $9,700.00
Invested in same funds listed above. I invested $5,250 between 2009 - 2010 and it's grown to it's currently value without me adding additional funds.

Edward Jones SIMPLE IRA through work  $1,060.00
Employer matches up to 3%
Invested in same funds listed above.



Cash on Hand $30K



Here's my questions:

I hear EJ charges loads for their American funds; should I open an Vanguard ROTH IRA account and try my hand at investing there?

I'm stuck with the EJ SIMPLE IRA as our employer has no other option; should I contribute just the minimum 3% enough to get my match and open a VANGUARD taxable account for the excess I would normally contribute?

If I keep the EJ account should I be invested in other funds? If so, which ones? My knowledge of investing is minimal, but I'm learning as much as I can from this forum and other financial sites.

Should I put my $30K cash into something like a CD or somewhere where it's a least earning interest or something? Open to suggestions.

My goal is to quite working in corporate America by 40 and just work my side hustle for "spending money" as HH pays most of the bills and is currently saving for retirement too; I'd like to have as much as possible saved in my retirement accounts at that point as a cushion for when I turn 66 and start taking distributions.
« Last Edit: October 03, 2017, 01:45:11 PM by GardenBaker »

nereo

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Re: Retirement Accounts
« Reply #1 on: May 23, 2016, 10:27:07 AM »
Quote

Here's my questions:

I hear EJ charges loads for their American funds; should I open an Vanguard ROTH IRA account and try my hand at investing there?

I'm stuck with the EJ SIMPLE IRA as our employer has no other option; should I contribute just the minimum 3% enough to get my match and open a VANGUARD taxable account for the excess I would normally contribute?

If I keep the EJ account should I be invested in other funds? If so, which ones? My knowledge of investing is minimal, but I'm learning as much as I can from this forum and other financial sites.

Should I put my $30K cash into something like a CD or somewhere where it's a least earning interest or something? Open to suggestions.

I involuntarily shiver every time I hear that someone's invested in Edward Jones.  Their fees are horrific, and there are many stories around where they give sub-par performance and sub-par advice while lining their own pockets.

#1)  Yes - open up an IRA at any of the low cost brokerages. Vanguard is a great choice, but Fidelity and others also offer index funds for ≤0.2%/year.  Over the long term fees matter a LOT

#2) AT the very least invest enough to get the company match.  AFter this it becomes a question about taxes and returns.  Given your situation, I would favor investing as much as you possibly can through your company (yes, even if it is with Edward Jones) right now to lower your taxable burden, and then planning on rolling that money over into your own account (see #1) as soon as you leave your current job.  It sounds like that will be in ~8 years.

#3) what is the fucntion of that $30k?  Is it your emergency fund?  If so, keeping it in a savings account is an ok strategy, even with poor interest rates.  however, I'd consider whether $30k is too much to keep on hand. How many monhts would $30k last you?  Do you have any children?  With no debt and two incomes a EF of 3-6 months is more standard.  Put any excess money into your investments (#1 and #2), or kill that auto debt.

#4) Only you can decide what you should be invested in.  Take the time to make out your own Investor Policy Statement (IPS), and let that be your guide.  It doesn't have to be hard - I invest 80% of my assets into an SP500 fund and 20% into an international emerging markets fund.  That's it. 

g'luck and keep asking questions - plenty of knowledgable people arouind here to help.

forummm

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Re: Retirement Accounts
« Reply #2 on: May 23, 2016, 10:36:30 AM »
Generally, get out of EJ and American Funds. Move everything to Vanguard and Vanguard funds. If you have to use EJ for work, that's fine. Just roll it over when you leave that job.

MDM

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Re: Retirement Accounts
« Reply #3 on: May 23, 2016, 03:21:45 PM »
Good advice already. 

See https://www.irs.gov/pub/irs-tege/rollover_chart.pdf: you can roll your SIMPLE IRA to another custodian (e.g., Fidelity, Schwab, Vanguard) after two years, even if you remain at your job.

Try the following lines in your favorite search engine if you lack reading material. ;)
"edward jones" site:forum.mrmoneymustache.com
"edward jones" site:bogleheads.org

GardenBaker

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Re: Retirement Accounts
« Reply #4 on: May 24, 2016, 07:34:52 AM »
Thank you everyone! I really appreciate the help and advice! I'm looking into a definite change!