Author Topic: My ROTH IRA? Fees, expense ratios, stress, etc?  (Read 17824 times)

uwbadgers19

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My ROTH IRA? Fees, expense ratios, stress, etc?
« on: April 29, 2013, 03:35:39 PM »
Hello!

Thanks in advance for any help that can be given.  I'll start by saying all this investing stuff stresses me out because I don't understand it.  I've tried to read up as much as I can but I don't seem to grasp it to well.  Here's some basic info on us!

Me 28, Wife 29

Wife
401k---28k
Roth---37k
Brokerage---11k

Me
Roth---11k

Not specifically working on earlier FI or anything like that.  I mean, don't get my wrong, it's something we'd like, but for now I'm starting with just trying to get some understanding!

My main questions are about my Roth.  To keep story short, my wife is a mortgage originator at US Bank and that is who I have my Roth through.  My wife doesn't pay any fees since she is an employee so this question relates to me.

My roth is 100% in Franklin Templeton 2045 Target Fund, FTTAX.

Gross Expense Ratio   2.06%
Net Expense Ratio   1.21%
Max Initial Sales Charge   5.75%
CDSC   0.00%
12b-1 Fee   0.30%

That is straight from their website.  I have had this money through US Bank since Oct 2011.  If I am understanding correctly, each month I pay fees to purchase FTTAX, correct?  I have read about 12b-1 fees and they are basically ad fees and the worst type of fees to have.

For example, if I look at my statement, I autopay $458 ($5500/year) each month.  In April FTTAX shares were at 11.58.  My statement shows I purchased 37.29 shares at 12.29.

12.29 - 11.58 = 0.71 difference

So, am I getting totally screwed here each month and throwing money away?  Seems to me I am.  Of course, this is the case for each month, not just April.

Now, I will say, I have met with my guy, who is a great dude and works 2 doors down from my wife, and I've actually discussed some of my questions with him a few months ago.  I think it hasn't fully sunk in/I just plain don't really understand this stuff!

Over the last 5-6 months, I've done lots of reading on this site and other finance sites.  From what I can tell, fees are bad and I should do this myself.

I guess to sum up my questions:

1.  Is my Roth screwing me and sucking my money away?

2.  Would I be better transferring my Roth to something I manage?

3.  Related to 2, if I should, I am very unsure about what to do.  I know Vanguard seems to be highly liked around here and elsewhere.

4.  Anything else I'm missing?

Ideally I want something I can set and forget.  Not be totally oblivious, but not pay fees for nothing and feel like I'm throwing money away each month.

Thanks for helping a noob out :)


Quick Edit:

http://apps.finra.org/fundanalyzer/1/fa.aspx

I went there and ran a quick check.  I did FTTAX against VFINX

I did 10k invest, 20 years, and 5%.

It showed my investment would be 6k more money made with VFINX and also pay ~3500 LESS in fees?  Is this for real? 

Am I running this correctly?
« Last Edit: April 29, 2013, 03:48:31 PM by uwbadgers19 »

savingtofreedom

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #1 on: April 29, 2013, 03:46:38 PM »
I am still figuring this out myself but unfortunately I think you are getting screwed.  Look into moving to Vanguard.  I just did this with one of my 401ks.  It was not that difficult.  You may want to look into the Boglehead's approach to investing. 

You can look into one of their Life Strategy funds which I think may be what you are looking for. The expense ratio for the growth funds is .17%.

GreenGuava

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #2 on: April 29, 2013, 07:23:33 PM »
Yes, you're getting hosed on fees.  You can move your Roth IRA in kind to Vanguard (do not cash it out and then try to put the money in at Vanguard.  Call them and have them transfer it themselves) and use their target date fund.  This is a low-stress, low-fee, low-expense ratio way to do things.  Make it no-fee by signing up for electronic delivery of statements.

This completely ignores things like taxable investments or treating all of your retirement funds as one large portfolio.  Reasonable people differ on whether to consider taxable investments and tax-advantaged investments, even aimed at the same goal (e.g., retirement) as one.  If you have a 401(k) and want to treat both of your tax-advantaged accounts as one, we can discuss that, although it looks like you don't have one.  If you have a preferred asset allocation, we can discuss that too.  And when your Roth IRA gets to about $20k, consider deciding on your own asset allocation and moving it to the underlying funds to save even more -- but if you don't, you're still far ahead of the game using Vanguard's target date funds than Franklin Templeton's.

Reepekg

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #3 on: April 29, 2013, 07:46:36 PM »
1. Yes, big time.
2. Yes.
3. Vanguard exists precisely because the dissatisfaction over #1. People here like Vanguard because fees are minimized.
4. Make the change right now! Also, you sound way more knowledgeable than you are letting on. You clearly care a lot more about your money than the great dude 2 doors down, and literally can't do worse than him. Have some confidence in yourself. You will make some mistakes and lose money (briefly) on paper, but the nice thing is that you'll learn and the odds are seriously stacked in your favor that you'll make that money back and more in the long term. Finally, you're young enough that losing a couple thousand in a bad investment seems like a big deal but really isn't compared with losing tens of thousands in your 40s or 50s. Now is the time to get a handle on investing with the training wheels on.
« Last Edit: April 29, 2013, 07:51:12 PM by Reepekg »

Honest Abe

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #4 on: April 29, 2013, 07:48:42 PM »
The fees are too damn high

uwbadgers19

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #5 on: April 30, 2013, 05:57:04 PM »
Thanks for the advice everyone.

Today I stopped my autopay each month to re-assess things.  Will look into Vanguard more and try to keep understanding things a bit more!  Right now I think I'll look into the 2045 vanguard fund.

I looked at it compared to the one I'm in and the Vanguard was higher returns in all factors---1 month, 6 month, 1 year, 3 year.  So better return and less fee?  Sounds good to me!

Feel free to chime in with any other thoughts/opinions on my situation.  Thanks

GreenGuava

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #6 on: May 01, 2013, 12:50:38 AM »
I looked at it compared to the one I'm in and the Vanguard was higher returns in all factors---1 month, 6 month, 1 year, 3 year.  So better return and less fee?  Sounds good to me!

While I agree it's a far better fund - no load, lower expenses, operated at-cost, and so on - don't go looking at past returns as an indicator of what fund(s) to choose.  That's performance chasing and it leads to bad results in general.  Not only are past results a poor predictor of future performance, using them to attempt to predict that is such a bad idea that mutual fund operators are legally required to tell you that when showing past performance.

By the way, the best predictor within an asset class of future mutual fund performance is the expense ratio - the lower, the more likely it will do better, compared to peers with higher expense ratios.  It's rare to find an expense ratio within an asset class lower than an appropriate Vanguard fund.   I can only think (offhand, I didn't do a search) of one of their funds that has a higher expense ratio than the one you're in right now, and it's not one you'll need to concern yourself with any time soon (if ever).

uwbadgers19

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #7 on: May 01, 2013, 01:28:51 PM »
Thanks Guava, that makes sense.

So, the main reason I'd leave my current fund and go to the Vanguard 2045 is expenses, correct?  The 2045 Vanguard also has performed better over the long term, so it's a win win?

I do see that Franklin Templeton is 80 stock/10 cash/10 bond and Vanguard is 90 stock/10 bond.  But that doesn't mean a whole lot to me in terms of understanding..... I mean, both funds as they approach 2045 would adjust to more bonds which are safer and less volatile?  Which would be the goal as you get closer to retirement, less chance of big drops?  Correct?

Thanks!

GreenGuava

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #8 on: May 01, 2013, 10:33:00 PM »
So, the main reason I'd leave my current fund and go to the Vanguard 2045 is expenses, correct?

Yes. 

  The 2045 Vanguard also has performed better over the long term, so it's a win win?

If it performs better in the future, which I believe it will, then it's a win-win.  That it did better in the past is only nice if you can go invest in it in the past. 

On a related note, are you familiar with the literature (academic and otherwise) about indexing vs non-indexing?  The short story is that indexing wins out almost every time within an asset class, especially as the years grow.  Very few active investors (whether individuals or managing a mutual fund) can beat an index over many years.  And within index funds, the only place to compete is on price... where Vanguard almost always wins hands-down.  Part of that is because of their corporate structure (they're not operated for profit).

I do see that Franklin Templeton is 80 stock/10 cash/10 bond and Vanguard is 90 stock/10 bond.  But that doesn't mean a whole lot to me in terms of understanding..... I mean, both funds as they approach 2045 would adjust to more bonds which are safer and less volatile?  Which would be the goal as you get closer to retirement, less chance of big drops?  Correct?

Thanks!

The general idea is that, as you approach retirement (let's imagine a person who intends to retire at or after 60 years old and is saving strictly in 401(k)/IRA type accounts), your asset allocation should become more conservative;  after all, while stocks tend to go up long-term, that isn't helpful if you need to sell some to eat when you're 70.  Bonds are far less volatile, and provide much stability.  They also aren't correlated with stocks, which helps somewhat. 

But the main goal in asset allocation - in deciding how much you want in stocks versus bonds - is risk control... knowing stocks tend to go up long term doesn't help if you see a drop of, say, 25% in your portfolio and sell everything to keep the nominal value safe.  I know plenty of people who, in 2007, had 100% stocks for their investments (you'll still see people with this plan).  They were young, they knew that stocks go up long term, so why bother with bonds before 50, they reasoned?  Most of them sold out of the market after October 2008 or so and aren't in (and thus missed the subsequent recovery).  And if they had stayed in, their bonds being relatively safe (total bond market returned something like 5% in the year 2008 when total stocks dropped over 40%) would have provided a place to buy more stocks "on sale" from.

(Even more sad:  there's not much benefit, if any, to being 100% stocks over 90% or 80% stocks and the rest bonds.  So they didn't need to take that risk, and now they're taking an even bigger risk by being out of the market)

So, you decide what you want your asset allocation to be:  if you're fine with 10% bonds, 90% stocks, then this fund is fine.  If you'd prefer something a little more conservative, look into a different target date or lifestyle fund.  Just because you can't access your returns before 60 doesn't mean you have to pick the year you'll turn 60 as the target date - that's just a default for people who don't want to think about it, and to guide you towards one that might be right for you as a starting point if you do want to think about it.

These funds pick a reasonable asset allocation for people with these expected retirement dates and change the allocation as time goes on.  They do the re-balancing for you.  If you manage your accounts yourself - as I do - you need to pick a time to re-balance (whether by selling and buying, or by shifting new allocations during your accumulation phase). 

There's a great expression to explain asset allocation:  stocks help you eat, bonds help you sleep.  The growth from stocks will help you pay your bills - such as at the grocery store - when you're in retirement.  The bonds will keep your total nest egg much more stable than 100% stocks would be. 

I hope this helps.  Let me know if I missed something or if you have more questions that I can answer.

uwbadgers19

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #9 on: May 02, 2013, 06:15:50 PM »
Thanks a ton!  You break down the wording so it's easy to understand :)

I'll look into a few other Vanguard funds as well, but I think I'm mainly just trying to find a "set and forget" fund for right now that is low in fees.  We have a lot of other stuff going on right now, renting condo, building house, etc that will be taken care of in the next 6 weeks that are taking my time priority right now.

I'd say I'm comfortable now with some variability in the 2045 fund, but I'll look into the 2035/2040 funds as well.  Once things in life settle down, we will soon have my car paid off (~1 year) and be debt free minus our house.  I plan to then save even more and at that point I will need to look into opening other accounts.  Currently, I'm just maxing the Roth to 5,500

At 28 for me, 29 for my wife, we have ~90k in retirement already so I feel like we are doing well, but I also want to make sure we aren't making any mistakes.  If you think I don't know much, my wife knows LESS, ha! 

Thanks!

Reepekg

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #10 on: May 03, 2013, 10:54:49 AM »
I'll look into a few other Vanguard funds as well, but I think I'm mainly just trying to find a "set and forget" fund.  We have a lot of other stuff going on right now

If this is your investment philosophy, the Vanguard target date fund approach is very appropriate.

uwbadgers19

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #11 on: May 22, 2013, 03:23:00 PM »
Just a quick update, I have had US Bank transfer/liquidate, not sure proper terminology, my roth IRA and initiate the transfer over to Vanguard, which I've already setup autowithdrawals to hit my 5500/year and go into the VTIVX fund (2045 target date).

I had to verbally confirm the transfer with them, which was a little weird, ha.  He tried to tell me that even though with fees the FTTAX 2045 fund had been outperforming VTIVX up until a year ago.  I basically just said I want to take charge of my money a bit more so switching is the best way to go, so it's done.

But now I had to look up what he said.\

https://www.google.com/finance?q=MUTF:VTIVX
https://www.google.com/finance?q=MUTF:FTTAX

When I pull them both up and look at any type of returns, 3 month, 1 year, 3 year, etc. in each one, VTIVX has had better returns.  Am I missing something here?  It looks like FTTAX performed worse and I had more fees, right?

The main reason I'm switching is to lower my fees since my Roth is probably just going to sit in this fund for a long time.

Anyways, glad to be learning more and taking more control.  Once our house is finished (3 weeks!) savings will be able to increase and I'll be able to look into opening a taxable account in addition to maxing my Roth.

GreenGuava

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #12 on: May 24, 2013, 12:10:43 AM »
I had to verbally confirm the transfer with them, which was a little weird, ha.  He tried to tell me that even though with fees the FTTAX 2045 fund had been outperforming VTIVX up until a year ago.  I basically just said I want to take charge of my money a bit more so switching is the best way to go, so it's done.

Even if it had been doing better up until then, past performance isn't a very good indicator of future returns.  In fact, within any given asset class, lower expense ratio is a far more reliable predictor of future returns.

But now I had to look up what he said.\

https://www.google.com/finance?q=MUTF:VTIVX
https://www.google.com/finance?q=MUTF:FTTAX

When I pull them both up and look at any type of returns, 3 month, 1 year, 3 year, etc. in each one, VTIVX has had better returns.  Am I missing something here?  It looks like FTTAX performed worse and I had more fees, right?

Yes, although those fees may have been part of the worse returns. 

Anyways, glad to be learning more and taking more control.  Once our house is finished (3 weeks!) savings will be able to increase and I'll be able to look into opening a taxable account in addition to maxing my Roth.

Cool.  Let me know if you have any more questions on that.

GreenGuava

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #13 on: May 24, 2013, 08:47:51 AM »
Unfortunately, you let your guy liquidate the Roth, but you did choose a low cost provider like Vanguard.  You might have your wife consider a switch to Vanguard too because she probably has some high fees, at least in the funds.   Vanguard will be happy to move the money to them.  Call up Vanguard when you can be online, and they will walk you throw it. 

I believe it was transferred in kind.  UW - is that accurate?  The former balance from Franklin is now at Vanguard in a Roth IRA, plus your new monthly contributions?

P.S., AJ:  use the "quote" button instead of putting single quotes.  It separates out the quote so it's clear to everyone what is quoted and what's yours.  Finding a single quote at the start and end is tough.

Hotstreak

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #14 on: May 24, 2013, 09:22:33 AM »
uwbadgers19, I would look very closely at your wife's accounts too.  Like others have mentioned, even though she may not be paying a fee directly to her co-worker adviser, she is almost certainly paying high fee's on whichever investment option she has chosen.  Often working for a bank an employee may receive the "premium" adviser regardless of her investment balance (where another client with her $$ amount would not be eligible to sit down with him), but to reiterate, unless she is actually being REFUNDED the internal charges of the investment fund, she's getting hosed almost as bad as you were.

I was floored reading your original post (glad you switched) because you were using a manager on a target date portfolio that does not require any management.  Your money automatically went from your account to the investment.. which re-balances itself with no influence from the manager.. who sat back and collected a fee.. for doing NOTHING!  Hoollllyyyy smokes!

aj_yooper

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #15 on: May 24, 2013, 10:10:23 AM »
Hello!

Thanks in advance for any help that can be given.  I'll start by saying all this investing stuff stresses me out because I don't understand it.  I've tried to read up as much as I can but I don't seem to grasp it to well.  Here's some basic info on us!

Me 28, Wife 29

Wife
401k---28k
Roth---37k
Brokerage---11k

Me
Roth---11k

Not specifically working on earlier FI or anything like that.  I mean, don't get my wrong, it's something we'd like, but for now I'm starting with just trying to get some understanding!

My main questions are about my Roth.  To keep story short, my wife is a mortgage originator at US Bank and that is who I have my Roth through.  My wife doesn't pay any fees since she is an employee so this question relates to me.

My roth is 100% in Franklin Templeton 2045 Target Fund, FTTAX.

Gross Expense Ratio   2.06%
Net Expense Ratio   1.21%
Max Initial Sales Charge   5.75%
CDSC   0.00%
12b-1 Fee   0.30%

That is straight from their website.  I have had this money through US Bank since Oct 2011.  If I am understanding correctly, each month I pay fees to purchase FTTAX, correct?  I have read about 12b-1 fees and they are basically ad fees and the worst type of fees to have.

For example, if I look at my statement, I autopay $458 ($5500/year) each month.  In April FTTAX shares were at 11.58.  My statement shows I purchased 37.29 shares at 12.29.

12.29 - 11.58 = 0.71 difference

So, am I getting totally screwed here each month and throwing money away?  Seems to me I am.  Of course, this is the case for each month, not just April.

Now, I will say, I have met with my guy, who is a great dude and works 2 doors down from my wife, and I've actually discussed some of my questions with him a few months ago.  I think it hasn't fully sunk in/I just plain don't really understand this stuff!

Investing is not friendship or social time; it is planning to make your money work for you in a cost and tax efficient manner that balances your risk/reward preferences.  This nice man and his firm have attached a Sukka to your wallet; I am glad you stopped the craziness, but now learn from this expensive mistake.  It is an easy mistake to do, but you did the right thing initially by starting the Roth.  You also have a good starting stash.

You did choose a low cost provider like Vanguard.  You might have your wife consider a switch to Vanguard too because she probably has some high fees, at least in the funds.   Vanguard will be happy to move the money to them.  Call up Vanguard when you can be online, and they will walk you throw it. 

You have started the investment journey so you need trail guides to help you and your wife.  Here are some ideas:  Burton Malkiel, The Random Walk Guide to Investing, Taylor Larimore, et. al., The Bogleheads’ Guide to Investing, William Bernstein, The Intelligent Asset Allocator, and Andrew Tobias, The Only Investment Guide You’ll Ever Need.  Get them from the library.  Read on the Vanguard site.  Read this from MMM:  http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

Keep on saving.  If a friendly investment guy/gal approaches you, run away and scream Help!.

aj_yooper

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #16 on: May 24, 2013, 10:13:21 AM »
You might also read this post from Long-Term Returns on expense ratios and investing:

http://www.longtermreturns.com/2012/03/why-investment-expenses-matter.html


uwbadgers19

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #17 on: May 24, 2013, 02:40:42 PM »
My terminology may be incorrect, but here we go!  I did the paperwork with Vanguard to 100% IRA rollover my entire balance.  Yesterday US Bank got my paperwork and I had to verbally confirm with them (their policy).  Now today my Roth, in my account's activity, says the shares were sold to cash, and now are in a money market at 11k.  I assume this then is transferred to Vanguard and the Vanguard 2045 shares are purchased at that day's price?

As far as my wife's fees, maybe you can help me decipher this.  As she has told me, I believe since she is a US Bank employee she gets a special "pricing" for certain funds.  This should help, in her roth, most is current in FAAGX.  FAAGX has an expense ratio of 1.35% and front load of 5.75%

However, when I look over her monthly purchases the share are bought at the price that day.....while mine were not.  So does that show she isn't getting fees?

Like I said, perhaps all my terminology isn't correct. 

Thanks all for the help!

Unfortunately, you let your guy liquidate the Roth, but you did choose a low cost provider like Vanguard.  You might have your wife consider a switch to Vanguard too because she probably has some high fees, at least in the funds.   Vanguard will be happy to move the money to them.  Call up Vanguard when you can be online, and they will walk you throw it. 

I believe it was transferred in kind.  UW - is that accurate?  The former balance from Franklin is now at Vanguard in a Roth IRA, plus your new monthly contributions?

P.S., AJ:  use the "quote" button instead of putting single quotes.  It separates out the quote so it's clear to everyone what is quoted and what's yours.  Finding a single quote at the start and end is tough.

aj_yooper

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #18 on: May 24, 2013, 07:24:25 PM »
The good news is that you now have a Roth at Vanguard!  At US Bank, they charged you 5.75% to spend money you diligently saved in a very simple account; Vanguard does not charge you a fee to purchase most of their funds.  US Bank charged you an expense ratio of 1.35% per year on all your money while Vanguard probably charges about .10%, or about 1/14th of the cost.  Since you have over $10k, you probably don't have an account fee with Vanguard either.  I am wondering if US Bank charged you a fee to convert your account at US Bank to cash or to transfer it to Vanguard.  Vanguard could probably have transferred it directly into your account there and you could make a change under their pricing. 

I am shocked by any bank that charges such fees to the spouse of an employee.  I am not picking just on US Bank; the same type of horrendous fees exist at all the big and little money shops of horror, Morgan Stanley, JP Morgan, etc.  That is why banks were salivating to get into the insurance and 'financial services' areas.   They are all staffed with nice people that have good social skills and pleasant personalities, but they typically offer products that blast a flame thrower at your money, rather than treating it with due respect for the effort you made to earn and save it.  That does not help you get a cost effective investment plan.  Low cost providers of investment services like Vanguard or Fidelity are crucial to advancing your financial future.  For example, suppose you have $2 million that you wanted to invest with US Bank.  They would take about $56,000 to buy your fund and then would charge you at least $26,000 per year for placing your money with a fund.  If you had 2 million, you could early retire today and receive about 4% of your stash per year for the rest of your life or $80k per year, except with US Bank, you would get about $78k.  They would then take over $26k per year for holding your stash while Vanguard's charges would be well under $2k per year.  That is why financial efficiency in investing is important at the start of investing (avoid the upfront charges of 5.75%) and in the buildup of your stash (the ongoing charges of 1.35% from US Bank).   
 
I suspect that your wife is also not getting a good deal at US Bank regarding her investments.  I would review them carefully and seriously consider having Vanguard help you transfer them to you.  Get the number for Vanguard and have your wife be online when she calls them;they can walk her through the process on line.  Don't have US Bank initiate the transfers. 

I have my accounts with Vanguard, but I am just a customer, not a salesperson.


grantmeaname

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #19 on: May 25, 2013, 07:27:15 AM »
As far as my wife's fees, maybe you can help me decipher this.  As she has told me, I believe since she is a US Bank employee she gets a special "pricing" for certain funds.  This should help, in her roth, most is current in FAAGX.  FAAGX has an expense ratio of 1.35% and front load of 5.75%

However, when I look over her monthly purchases the share are bought at the price that day.....while mine were not.  So does that show she isn't getting fees?
Your wife isn't paying a load at the beginning- that's the 5.75% that would normally be the salesman's commission. The 1.35% fee is deducted from the net asset value of the mutual fund portfolio gradually over the course of the year, and you and your wife are both paying that. You'll be much better off at Vanguard, where most of your fees will be under .30%.

uwbadgers19

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #20 on: May 25, 2013, 08:27:04 AM »
As far as my wife's fees, maybe you can help me decipher this.  As she has told me, I believe since she is a US Bank employee she gets a special "pricing" for certain funds.  This should help, in her roth, most is current in FAAGX.  FAAGX has an expense ratio of 1.35% and front load of 5.75%

However, when I look over her monthly purchases the share are bought at the price that day.....while mine were not.  So does that show she isn't getting fees?
Your wife isn't paying a load at the beginning- that's the 5.75% that would normally be the salesman's commission. The 1.35% fee is deducted from the net asset value of the mutual fund portfolio gradually over the course of the year, and you and your wife are both paying that. You'll be much better off at Vanguard, where most of your fees will be under .30%.

Let me see if I'm understanding this right.  My wife's roth is ~40k.  So at 1.35% expense ratio each year she pays fees of 40k * .0135 = $540/year.  Is that correct?

If we were in a let's say 0.3% expense ratio it's 40k * .003 = $80/year?

I don't seem to see any fees taken out when looking at account activity, maybe I'm missing something.

Thanks!

GreenGuava

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Re: My ROTH IRA? Fees, expense ratios, stress, etc?
« Reply #21 on: May 25, 2013, 10:57:23 AM »
Let me see if I'm understanding this right.  My wife's roth is ~40k.  So at 1.35% expense ratio each year she pays fees of 40k * .0135 = $540/year.  Is that correct?

If we were in a let's say 0.3% expense ratio it's 40k * .003 = $80/year?

I don't seem to see any fees taken out when looking at account activity, maybe I'm missing something.

Fees for the expense ratio are taken out from the fund's NAV on a regular basis - the return you see is already net of the expense ratio.  They don't sell shares or otherwise send you a bill for the amount.  This is true for any mutual fund.