The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: LisaLou on October 28, 2013, 02:31:37 PM
-
I'm trying to decide between 2 funds for my SIMPLE IRA. One that I found and asked my broker for and one that he's recommending (which I believe he gets commission on).
Vanguard LifeStrategy Growth Fund - I asked for my allocation to go to this fund. The broker later called me and informed me that Wells Fargo (who is the administrator of my SIMPLE IRA) will charge me $50 in fees every time I buy into the fund, so I will have to buy in now and then again at 6 or 12 month intervals as opposed to monthly.
Russell LifePoints Equity Growth - this is the recommendation of the broker, but I know they've recommended this fund to everyone at my company.
I'm uncertain if I should just go with the Russell fund so WF doesn't charge me add'l fees or if the Vanguard fund will be my better option either way.
I have a prospectus for both plans and am happy to provide other info or answer any add'l questions.
-
Why not just do the Simple IRA with Vanguard if you like their funds?
-
<------ Brainfart.
The Simple IRA is through your employer right?
I'd focus on whatever will minimize the fees for you, calculate that and base a decision from there assuming that the funds perform similarly.
-
I dont know if I am a fan of either of those funds but given those two I would prefer the Vanguard fund. Since the fees on the Russell fund are so much hire there is a break even point where. Also it looks like the Russell has the possiblity of a load depending on the class. Do you have to pay a load? If so I wouldnt even consider touching the Russell Fund.
Quick math says that if contribute the max 12K to the SIMPLE this year you would pay less in fees by buying the Vanguard fund less than 2 times.
I assume this a small company since you have a SIMPLE. Anyway you could talk them into changing to better provider? My company uses TD Ameritrade. Not the best but they dont charge the company anything and they about 100 ETFs you can buy commission free. I hold VTI. Its got a .05% expense ration no buying fee and fits nicely with some other funds for a passive portfolio.
-
Ask your employer if they are willing to establish an additional plan at Vanguard. There is no cost whatsoever to the employer. There is no need to close the existing plan.
I successfully did this last year. It is awesome. Buh-bye load funds! I am the only participant in the Vanguard plan, everyone else prefers to pay loads.