Author Topic: Help with Fidelity options with transferring IRA from T-Rowe Price  (Read 2775 times)

starterstache

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Hi Investment Experts -

I recently rolled over a T-Rowe Price IRA into Fidelity.  When the transfer happened, Fidelity keep the IRA with T-Rowe Price's funds - which have a very high expense ratio of .72%.

I'm looking to move the funds into a better IRA w/Fidelity.  Do you all have any recommendations? 

Would a better option be to purchase ETF's given their lower expense ratios?  I wouldn't know where to start with ETF's personally, so advice in this area would be appreciated.

Thanks in advance :)

-SS

Full Beard

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Re: Help with Fidelity options with transferring IRA from T-Rowe Price
« Reply #1 on: January 30, 2015, 04:52:51 PM »
I'm definitely not an expert, so I'm going to sit around and wait for the experts to chime in.  I also don't want to take away from the OP, so if anybody has any insight after answering the original question, I'd love to hear it.

I also have some IRAs with T. Rowe Price in the Retirement 2040 fund with an expense ratio of .76%.  I have been wanting to know if it would make sense to switch to a similar Vanguard lifecycle fund with an expense ratio of .18%.  I'm just worried about being out of the market in the time that it takes to transfer the funds to Vanguard.  Would it be a good thing to make this switch?  I'm 31 and it's about 68K that I would be transferring.


MDM

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Re: Help with Fidelity options with transferring IRA from T-Rowe Price
« Reply #2 on: January 30, 2015, 06:30:13 PM »
I'm looking to move the funds into a better IRA w/Fidelity.  Do you all have any recommendations? 

Here is one option: http://www.bogleheads.org/wiki/Three-fund_portfolio#Other_than_Vanguard.2C_Boglehead-style
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With Fidelity, for example, you could construct a three-fund portfolio using:
Fidelity Spartan Total Market Index Fund (FSTMX)
Fidelity Spartan Global ex U.S. Index Fund (FSGDX)
Fidelity Spartan U. S. Bond Index Fund (FBIDX)

starterstache

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Re: Help with Fidelity options with transferring IRA from T-Rowe Price
« Reply #3 on: January 30, 2015, 07:21:07 PM »
Thank you all for the responses.  I ended up putting the funds (which are less than 10K at the moment) into a Spartan Total Market Index Fund.  These are investor class, so the minimum required trade is 2.5K (versus 10K for the majority of the Spartan funds).  I believe the expense ratio was only .1% for this particular fund, a dramatic improvement over the .76% I would have been paying for the T-Rowe mutual target fund.  Most likely I'll move these dollars into one of the Spartan Small Cap funds once they've exceeded the 10k mark in the next 6 months.

Full Beard - I wouldn't stress too much about being out of the market for a day or two.  It won't be the end of the world, and long term you'll probably make up any difference on the savings from a lower expense ratio.  As is, assuming my math is correct, you're paying over $500 dollars/yr in management fees - which seems insane to me :)

Good luck!