Mother is really considering the move to index investing, so I need to try to confirm some things with some of you experts that gave me such excellent advice and steered me in the right direction when I was just starting out.
So a basic summary:
Mother was a teacher. She has (what she can remember) 4 different accounts. Valic with a taxable containing several Class C funds, and a 403b with what she believes is an annuity. An IRA with a company I have vaguely heard of, but definitely not one of the top three (Van/Fid/TRowe). She could only find her paperwork for the taxable account, and I checked several of her funds, and they have high fees (0.75% was the lowest) with add-ons and is being charged the privilege of having an account each quarter as well.
Mother has a kick-ass pension and is drawing Social Security based off of my dad's benefits. So she is not depending on her investments at all and can afford to go "risky" even though she is 70. She said on a scale of 1-10, she's a 7.
She is not computer savvy at all. She likes her paper statements, and she likes the idea of a brick and mortar storefront. As she would possibly need a bit of hand-holding before she gets comfortable with the idea of passive investing, I think Fidelity would be a better fit than Vanguard since they are more her speed as long as we stay away from paid professional management and high fee funds (I'm all in Spartan indexes myself and am very happy with Fid, so I admit this is a slight bias in their favor). In the interest of simplifying and making things more efficient and easier for her, I think she could convert her 403b into an IRA and possibly combine with her existing traditional IRA, reducing the number of buckets she has to deal with.
I believe that Valic is not a very good company overall, and she definitely does not need to stay with them in retirement. They also had her in some pretty inefficient funds in that taxable account - high turnover and some frequent dividend payouts - some bond funds in there - running up her taxable events. I need to get the name and check the nature of the annuity she has with the 403b, but I told her that if it was possible to get out of it without losing much, she doesn't need an annuity either and it would make sense to invest it in index funds as well.
I basically think we could work up a 3-4 fund lazy portfolio, she could self-manage, and would definitely get decent service at either Vanguard or Fidelity that she could call up whenever she had a question. I would also be available to help her with the stuff since if she was just doing index funds, I know how to help her figure out her AA, and get her in the right ratio of stock/bond funds. We could get the accounts transferred and then set up the investments from there. And then going forward, she's have all of her accounts at the same place which would simplify her paperwork (she saves everything, and then can't find it), in easy breezy index funds that need no constant worry and monitoring and won't rob her blind in fees, and she'd only ever have to think about them maybe once a year to rebalance.
(I am also trying to convince her to spend some of that money on herself - she has a bunch of things that could could be fixed, make her life easier/fun or just splurge dammit since she's 70 and not in the best of health. I told her I'd rather she spent her money on herself than leave an inheritance.)
Any suggestions?
