Author Topic: Any experience with fees for using TD Ameritrade through a SDBA?  (Read 2923 times)

pigpen

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Any experience with fees for using TD Ameritrade through a SDBA?
« on: November 28, 2014, 08:48:10 AM »
My wife has a 403b option through her job. Of the funds available to her through her provider, the best option is a target retirement date fund with an expense ratio of 1.02%. She also has a self-directed brokerage option through TD Ameritrade. My thought was that we could use this option to purchase Vanguard funds instead with their lower expenses.

Her plan provider charges a yearly fee of $60 for the SDBA, plus any fees that TD Ameritrade charges. From speaking with a TD Ameritrade rep on the phone, it seems that if you plan to buy shares each month through a systematic purchase agreement, they waive their normal transaction fees except for an initial setup charge. The information they emailed me, however, doesn't give any fee detail, nor does their website.

I don't want to set this up just to find out that I'm missing a fee somewhere that would make the whole thing pointless. Has anyone done something similar with TD Ameritrade? Or any other broker? Am I missing something that would make this a stupid idea? Other information if helpful to suggest alternatives: 1. We plan to max out her 403b and Roth as well. 2. combined income puts us in 25% tax bracket.

GGNoob

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Re: Any experience with fees for using TD Ameritrade through a SDBA?
« Reply #1 on: November 28, 2014, 08:59:15 AM »
Use the SDBA to invest in the TD Ameritrade commission free ETFs. This way there will be no additional fees. This is what I do for my 457 and 401k. My provider charges $50 a year for the SDBA option and another 0.06% asset based fee. Still cheaper than my plan options and let's me invest in the same ETFs I invest in with my other accounts.


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pigpen

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Re: Any experience with fees for using TD Ameritrade through a SDBA?
« Reply #2 on: November 28, 2014, 11:46:29 AM »
Thanks. Unfortunately, her plan is a mutual fund only plan, but we'd still be better off doing this with than the 1.02% options in the core plan. They make it kind of a pain, though. You can only transfer over a minimum of $1,000, which obviously is larger than the $750/month required to max out the 403b. I guess we can transfer what's already in her core plan into the TD Ameritrade money market account, set up a systematic monthly purchase of $750, and then move over additional money from the core plan every couple of months.

GGNoob

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Re: Any experience with fees for using TD Ameritrade through a SDBA?
« Reply #3 on: November 28, 2014, 12:12:36 PM »
To max, you would contribute $1,500 a month...so $750 per check only if she gets paid twice a month. Mine also had the $1,000 minimum transfer.


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pigpen

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Re: Any experience with fees for using TD Ameritrade through a SDBA?
« Reply #4 on: November 28, 2014, 02:14:13 PM »
Oh yeah. That's right. Brain freeze there. I should probably improve my arithmetic skills if I'm going to be in charge of the finances.