Author Topic: Opening a Roth IRA  (Read 2902 times)

pcb09

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Opening a Roth IRA
« on: May 13, 2014, 05:52:32 PM »
Hi everyone,

Looking for a little guidance regarding opening a Roth IRA.

Currently I have an investment account with Schwab that was opened when I was in college (3 years ago) but it is just a regular brokerage account. Additionally since graduating and working full time starting about 10 months ago I now have a 401(k) through work that is managed by Fidelity.

I was looking to open a Roth IRA and was planning to invest in (VTSAX) until I realized that account has a minimum 10,000 investment so the plan then became to invest in the ETF version of it (VTI).

My question lies in who to run the Roth IRA through. I would like to minimize the number of brokers, and I may not be understanding fully, but it looks like there would be about a $8 fee each time you dumped money into Schwab and Fidelity to add to the pot. Does Vanguard charge such a fee? I couldn't find a answer one way or the other on their site. While $8 isn't a lot of money, if you wanted to dump in an extra $100 at the end of the month because it was left in your checking account nearly 10% of your addition would be eaten up by fees, ouch!

Am I missing something here? Is this just the way it is and you got to deal with it by building up a bigger chunk of cash before adding it to the pot so that the fee isn't nearly 10% but is more like a 2% fee when you dump say $500 or more in?

Thanks everyone


Badass by 41

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Re: Opening a Roth IRA
« Reply #1 on: May 13, 2014, 06:03:27 PM »
It might even be worse than what you describe.  I know USAA charges a $40 fee for each purchase of an outside funds.

Here's what Vanguard charges. https://personal.vanguard.com/us/whatweoffer/stocksbondscds/feescommissions

milesdividendmd

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Re: Opening a Roth IRA
« Reply #2 on: May 13, 2014, 06:11:28 PM »
TD Ameritrade includes VTI on their fee-free ETF list.  Free is a good price!  With personal capital (website not advisors)  it's pretty easy to keep track of multiple investment accounts FWIW.

Alexi

beltim

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Re: Opening a Roth IRA
« Reply #3 on: May 13, 2014, 06:14:02 PM »
Both Schwab and Fidelity have a selection of commission-free ETFs that would be a better choice than buying Vamguard funds in those accounts.

Frankies Girl

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Re: Opening a Roth IRA
« Reply #4 on: May 13, 2014, 06:30:15 PM »
You could do a Roth at Vanguard and just buy there. If I was you wanting to do the Vanguard ETF, you could transfer that brokerage account from Schwab over to Vanguard and see if you had enough to get into the VTSMX (it's the investor level that has a $3,000 buy in). Having the money in a Roth would avoid creating taxable events too. At the least, you'd only be dealing with a Vanguard and Fidelity.

Or you could do the Roth in Fidelity and use their Spartan equivalent funds. That's what I did. They are the same expense ratio and work practically the same as Vanguard.

http://www.bogleheads.org/wiki/Fidelity

The total stock market equivalent at Fid is FSTMX ($2,500 minimum). I am pretty sure there is an ETF version but can't track it down. Fid has a ton of no cost ETFs however that are supposed to be really great.


pcb09

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Re: Opening a Roth IRA
« Reply #5 on: May 15, 2014, 07:00:21 PM »
Been doing some more looking around.

Would  SCHB be the schwab equivalent of the vanguard VTSAX?

SCHB
Expense ratio of .04%
Description-
The investment seeks to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Broad Stock Market Index. The fund invests at least 90% of its net assets in stocks that are included in the index. The index includes the largest 2,500 publicly traded U.S. companies for which pricing information is readily available. The index is a float-adjusted market capitalization weighted index that reflects the shares of securities actually available to investors in the marketplace. It may invest up to 10% of its net assets in securities not included in its index.