The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Freedom2016 on November 10, 2015, 02:42:44 PM
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I am in the process of rolling over IRA assets from Merrill Lynch to Vanguard (yay! dumping the high fee advisor!). I successfully initiated the transfer of assets (in kind), and now the Vanguard IRA has a mishmash of funds - 2 mutual funds and 19 ETF's.
If I want to get everything in this IRA into VTSAX / VGTSX / VBTLX, how do I do that?
Do I sell the mutual funds / ETFs and settle them to the Money Market fund, and then buy the funds I want? Are there any tax repercussions of doing it this way? If yes, is there another way I should do this?
Thanks for the help!
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Do I sell the mutual funds / ETFs and settle them to the Money Market fund, and then buy the funds I want?
Yes. You may even be able to do a direct exchange between your current funds and the fund you want.
Are there any tax repercussions of doing it this way?
Within an IRA? Nope. All transactions within the account have no effect on your taxes.
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Thanks! I appreciate the help. :)
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Is it typical to incur either a fee or commission amount to sell? Sorry, I am so new to doing this myself, that I don't know what's typical.
I have 2 mutual funds in this IRA and 19 ETF's. The mutual funds have a $35 fee to sell, and it looks like the ETF's are $7 each. So I'm about to incur $203 in fees just to sell the crap I have and put my money into Vangard funds?
Is there any way to avoid these fees?
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Yes, trading commissions are typical. You may want to look into whether your current broker or new broker has lower commissions for those particular securities. If the current broker does, liquidate everything before transferring and then transfer cash. If the new broker does, look into whether you can do an in-kind transfer and sell in the new account.
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Thanks. I think that ship has sailed, as I already transferred the assets "in kind." Sigh. Lesson learned.