Author Topic: 401(k) and IRAs with Vanguard  (Read 2282 times)

Eric9064

  • 5 O'Clock Shadow
  • *
  • Posts: 42
401(k) and IRAs with Vanguard
« on: April 06, 2016, 02:40:33 PM »
I currently have both my 401(k) and IRA with Vanguard, with both being invested in the Target Retirement 2050 Fund. I am going to open an IRA for my wife soon, and was intending to invest in the same fund. Should I be concerned that all our retirement accounts will be held in the same fund?

Thanks in advance for any advice.


johnny847

  • Magnum Stache
  • ******
  • Posts: 3192
    • My Blog
Re: 401(k) and IRAs with Vanguard
« Reply #1 on: April 06, 2016, 03:19:35 PM »
What concerns you about this?

forummm

  • Walrus Stache
  • *******
  • Posts: 7389
  • Senior Mustachian
Re: 401(k) and IRAs with Vanguard
« Reply #2 on: April 06, 2016, 04:41:42 PM »
You own about 10000 different stocks, globally diversified, and a globally diversified set of bonds. You essentially own the world's equities and bonds. What more could you be invested in without buying a part of a private equity firm or a small business?

NoStacheOhio

  • Handlebar Stache
  • *****
  • Posts: 2140
  • Location: Cleveland
Re: 401(k) and IRAs with Vanguard
« Reply #3 on: April 07, 2016, 06:04:24 AM »
In the case where Vanguard goes under, the underlying assets in the fund still exist, and belong to fund shareholders.

GrowingTheGreen

  • Bristles
  • ***
  • Posts: 356
    • Growing The Green
Re: 401(k) and IRAs with Vanguard
« Reply #4 on: April 07, 2016, 08:58:33 AM »
In the case where Vanguard goes under, the underlying assets in the fund still exist, and belong to fund shareholders.

I think this is what OP is wondering. Good answer. Do you have any sources for this?

nereo

  • Senior Mustachian
  • ********
  • Posts: 11455
  • Location: Just south of Canada
    • Here's how you can support science today:
Re: 401(k) and IRAs with Vanguard
« Reply #5 on: April 07, 2016, 09:08:37 AM »
In the case where Vanguard goes under, the underlying assets in the fund still exist, and belong to fund shareholders.

I think this is what OP is wondering. Good answer. Do you have any sources for this?

Well JL Collins covered it pretty well in his stock series.
http://jlcollinsnh.com/2012/09/07/stocks-part-x-what-if-vanguard-gets-nuked/

NoStacheOhio

  • Handlebar Stache
  • *****
  • Posts: 2140
  • Location: Cleveland
Re: 401(k) and IRAs with Vanguard
« Reply #6 on: April 07, 2016, 09:40:52 AM »
In the case where Vanguard goes under, the underlying assets in the fund still exist, and belong to fund shareholders.

I think this is what OP is wondering. Good answer. Do you have any sources for this?

This sort of explains a fund liquidation: http://www.investopedia.com/articles/mutualfund/09/mutual-fund-liquidation.asp

It doesn't really address an investment firm going under, which is a different scenario, and could possibly involve SIPC insurance in addition to liquidation.

Jack

  • Magnum Stache
  • ******
  • Posts: 4734
  • Location: Atlanta, GA
Re: 401(k) and IRAs with Vanguard
« Reply #7 on: April 07, 2016, 09:58:38 AM »
(Since others are addressing the issue of holding all your assets at the same brokerage, I'm going to assume that the OP actually did mean "fund:")

Should I be concerned that all our retirement accounts will be held in the same fund?

Because it is a target-date fund, no, you need not be concerned: that's exactly what target-date funds are for.

If instead your single fund were something less likely to be an appropriate asset allocation by itself, such as a sector fund (or, $DIETY forbid, an individual stock!), then you would want to be concerned.

If you had said you were 100% VTSAX (i.e., total US stock market), that's borderline: less diversified than your target-date fund, but quite possibly diversified "enough." Opinion would be divided about whether you needed to add bonds and/or international stocks or not.