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.aspxI 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?