Author Topic: Greenhorn investor - need help analyzing SIMPLE IRA  (Read 2090 times)

Ashcons

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Greenhorn investor - need help analyzing SIMPLE IRA
« on: February 20, 2014, 10:19:56 AM »
Hello everyone,

I need a little help analyzing my current investment before I go talk to my account manager and make changes. Here's a little summary of my situation. My wife and I are shoveling ourselves out of debt we incurred over 10+ years before I found MMM and he facepunched a lightbulb on in my head in regards to focusing on our finances. My employer offers 2% matching in a SIMPLE IRA, which I contribute to at the 2% to get the match. Wells Fargo manages the IRA and charges my account $40/yr in management fees.

The WF investment manager visits our office every couple years to talk to people about their investment goals and answer questions. When he and I talked, I wasn't up to date on understanding funds and their fees, so I went with his recommendation of THORNBURG INV INC BLDR C (TIBCX).

It's time to revisit my current portfolio and determine how to maximize my meager investments. The fund has the following fee characteristics:
Deferred load of 1%
Prospectus net fee ratio of 2.13%

If I understand correctly, 1) after my 1-year anniversary for purchases, the 1% load is waived; 2) I should expect a 2.13% fee on my market value annually; 3) that's high and really hinders my growth.

I am not entirely sure what my options are in regards to different funds. I like the looks of VISGX and VMGIX and can meet those 3k minimum investment requirements.

Does it seem reasonable to bail early and lose the 1% load fee to avoid any other expenses and move into the Vanguard funds if that's possible? I need to get in contact with my advisor because the only fee I've seen taken from my account is the WF management fee. If I can pay 1% to avoid a 2% fee, it seems like a no brainer to cash out of this fund and investigate other options. Anyone have any thoughts or corrections to point out?
« Last Edit: February 20, 2014, 12:32:20 PM by KeepCalmAndRepayDebt »

matchewed

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Re: Greenhorn investor - need help analyzing SIMPLE IRA
« Reply #1 on: February 20, 2014, 03:45:04 PM »
It all depends on how much you have invested now and how long you're going to stay with your employer. I'm of the opinion that you jump out of that craptastic fund now and find a better choice regardless of the factors I've listed. Unless you are achieving some goal for your Asset Allocation an expense fee of greater than .6% is ludicrous IMO. I'd treat any fees for getting out of that fund as lost money already, no need to lose more because you're unwilling to jump.

Another Reader

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Re: Greenhorn investor - need help analyzing SIMPLE IRA
« Reply #2 on: February 20, 2014, 04:10:37 PM »
What are the offerings in your Simple IRA plan?

Ashcons

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Re: Greenhorn investor - need help analyzing SIMPLE IRA
« Reply #3 on: February 20, 2014, 09:09:15 PM »
Left a message for our account manager to give me a call. It was near the end of the day, so I probably won't hear from him tomorrow. I'm going to figure out what funds I have access to and look for something that meets my investing goals at a lower expense ratio, I hope. Won't know till tomorrow, though.

soccerluvof4

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Re: Greenhorn investor - need help analyzing SIMPLE IRA
« Reply #4 on: February 21, 2014, 08:10:37 AM »
I agree. Sooner you get out the better. Take your hit now.

Ashcons

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Re: Greenhorn investor - need help analyzing SIMPLE IRA
« Reply #5 on: February 21, 2014, 11:27:42 AM »
Thank you all for confirming the need to move my money into a better fund. Hopefully I have that option!