Author Topic: Schwab Roth IRA and Brokerage - Schwab Mutual Funds vs Vanguard ETFs  (Read 578 times)

HPLustcraft

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Hey all! Late MMM Bloomer (44) here!

I've been socking money away in my 401K for a bit now (just hit 190K, and am working toward maxing it out annually), but reading the MMM Forums has shown me the advantages of having a Roth and a Brokerage account, so I am going to do both with an eye to long term keeping (not much playing around, just set it and mostly forget it)

I only have a comparatively small amount of cash to start (about 4K) but since you can only put in 6K at a time in the Roth, and I am totally new to it, I should be able to put in the 4K then max it this year (with holiday pay) and start putting some in the brokerage account as well (Following the Investment Order, of course)

Next year I should be able to start maxing it on a per paycheck basis and put some in the brokerage account on a regular basis.

Here is my question: My Roth IRA will be with Schwab (where my work 401K is also....consolidation! Also my only choice for a PCRA) and if I buy Vanguard Mutual funds they will charge me 49.95 each time. I have taken to getting the Schwab Mutual Fund (SWTSX) because they don't charge for it, then at the end of the year I sell all of it and buy the equivalent in Vanguard fund, limiting that charge to once a year.

Now that I have a Roth and a taxable account, should I do the same or get the Vanguard ETF equivalent (VOO I think?) or a combo?

Thanks!

L-

EvenSteven

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Re: Schwab Roth IRA and Brokerage - Schwab Mutual Funds vs Vanguard ETFs
« Reply #1 on: November 05, 2019, 12:49:50 PM »
I would just buy the version of the index fund that is native to the brokerage.

If at Fidelity here are the funds equivalent to Vanguard funds.
https://www.bogleheads.org/wiki/Fidelity

If at Schwab here are the funds equivalent to Vanguard funds.
https://www.bogleheads.org/wiki/Charles_Schwab

terran

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Re: Schwab Roth IRA and Brokerage - Schwab Mutual Funds vs Vanguard ETFs
« Reply #2 on: November 05, 2019, 03:46:12 PM »
Also, both Fidelity and (I think) schwab now offer commission free ETFs, so you could just invest in vanguard ETFs. VTI = VTSAX.

HPLustcraft

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Re: Schwab Roth IRA and Brokerage - Schwab Mutual Funds vs Vanguard ETFs
« Reply #3 on: November 05, 2019, 11:12:33 PM »
I'd prefer to simplify it as much as possible...The less I mess directly with the money the better, so that way I can forget it exists while it compounds.

As far as Schwab Mutual Funds vs Vanguard Mutual Funds vs Vanguard ETFs...

Is there any advantage of getting one over the other in a Roth or a brokerage account?

(Other than I don't THINK you can do an Automatic Investment Plan with ETFs)

L-

EvenSteven

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Re: Schwab Roth IRA and Brokerage - Schwab Mutual Funds vs Vanguard ETFs
« Reply #4 on: November 06, 2019, 07:40:22 AM »
I'd prefer to simplify it as much as possible...The less I mess directly with the money the better, so that way I can forget it exists while it compounds.

As far as Schwab Mutual Funds vs Vanguard Mutual Funds vs Vanguard ETFs...

Is there any advantage of getting one over the other in a Roth or a brokerage account?

(Other than I don't THINK you can do an Automatic Investment Plan with ETFs)

L-

Nope. I treat them as identical. Any differences will be random small tracking error from year to year. You may realize a small tax benefit by less realized capital gains coming off of the vanguard mutual funds in a taxable brokerage, but it's not a big deal.