Author Topic: Vanguard IRA Question  (Read 3294 times)

zenyata

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Vanguard IRA Question
« on: January 30, 2015, 08:13:47 AM »
I very recently opened an account with Vanguard and set up an IRA - to hopefully contribute max for both 2014 and 2015.

I think this is a basic question but I wasn't sure what the correct terminology would be to use when searching through their on-line resources...

So I made an initial deposit and set up on-line access to my accounts and the deposit I made (via direct transfer from my credit union) is in a money market (settlement) account - when I go to use that money to select specific funds for the IRA is there a transaction charge / fee each time ?  Basically I'm wondering if is better to just accumulate money in the money market account and buy all my desired funds in one or a couple transactions vs. buying things piecemeal over time and many transactions.

I also wasn't sure if any transaction fee is "per event" or per fund purchased - i.e. if I use $2000 worth of the settlement account $$ to buy 5 different funds and there's a fee to buy each (let's say $5) then I'd be looking at $25 in total to buy those;  or alternately is it just a one time fee whenever you transfer an amount of money from settlement account to other holdings, no matter how it is then distributed amongst those other funds ?

Thanks in advance for enlightening me !

SaintM

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Re: Vanguard IRA Question
« Reply #1 on: January 30, 2015, 09:12:37 AM »
There shouldn't be a transaction fee to buy Vanguard funds or ETFs direct from Vanguard.  Other brokerages will sock you with a transaction fee to buy Vanguard funds.

MDM

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zenyata

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Re: Vanguard IRA Question
« Reply #3 on: January 30, 2015, 11:30:49 AM »
OK thanks for the replies - I'll check out the FAQ link !

-z

hyla

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Re: Vanguard IRA Question
« Reply #4 on: February 01, 2015, 09:49:16 PM »
Yep, no transaction fees at vanguard.

Make sure you sign up for electronic delivery of documents when you set up your accounts though, I believe some of their funds will charge a $20 annual fee if you have lower balances and opt to get you documents and notices in the mail.  Super easy to avoid though, just check electronic delivery (They still mail you important tax documents regardless, but you deposit notifications and stuff like that will come as emails).

zenyata

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Re: Vanguard IRA Question
« Reply #5 on: February 11, 2015, 04:25:27 PM »
I had another follow up question regarding Vanguard IRAs that maybe someone could clarify for me...

I recently set up and began funding both 2014 and 2015 Roth IRA to max out (for the 2014 one) prior to April deadline.

However, after the initial funding set-up I don't see how any funds that you buy / $$ put into the IRA are apportioned out by year - does it all just go into one big bucket regardless of year but it fills up the available 2014 limit first (until it hits max $$ for 2014 or is past deadline in April) and then starts funding the 2015 version ?  The mechanics of that wasn't really clear to me.  I suppose choosing some initial funding amount for 2014 and 2015 was a necessary step as defining that I did indeed want an account for 2014 and 2015 tax years - am I reading that right ?

Thanks for any follow-up info you can provide !

Bracken_Joy

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Re: Vanguard IRA Question
« Reply #6 on: February 11, 2015, 04:47:15 PM »
Yep, no transaction fees at vanguard.

Make sure you sign up for electronic delivery of documents when you set up your accounts though, I believe some of their funds will charge a $20 annual fee if you have lower balances and opt to get you documents and notices in the mail.  Super easy to avoid though, just check electronic delivery (They still mail you important tax documents regardless, but you deposit notifications and stuff like that will come as emails).

Excellent tip, didn't know that. Thank you. Do you know what "lower balances" entails?

MDM

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Re: Vanguard IRA Question
« Reply #7 on: February 11, 2015, 05:36:59 PM »
Excellent tip, didn't know that. Thank you. Do you know what "lower balances" entails?

See https://personal.vanguard.com/us/help/FAQBrokerageFeesContent.jsp.  "Voyager" starts at $50K, so if you want to kill trees for free you need at least that much. :)

Bracken_Joy

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Re: Vanguard IRA Question
« Reply #8 on: February 11, 2015, 06:04:46 PM »
Excellent tip, didn't know that. Thank you. Do you know what "lower balances" entails?

See https://personal.vanguard.com/us/help/FAQBrokerageFeesContent.jsp.  "Voyager" starts at $50K, so if you want to kill trees for free you need at least that much. :)

Haha, will be killing no trees. Fiance set up vanguard account last month and took a few weeks to switch to e-statements. Just curious if we could expect a charge =) Sounds like we might!

madamwitty

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Re: Vanguard IRA Question
« Reply #9 on: February 11, 2015, 06:15:30 PM »
I had another follow up question regarding Vanguard IRAs that maybe someone could clarify for me...

I recently set up and began funding both 2014 and 2015 Roth IRA to max out (for the 2014 one) prior to April deadline.

However, after the initial funding set-up I don't see how any funds that you buy / $$ put into the IRA are apportioned out by year - does it all just go into one big bucket regardless of year but it fills up the available 2014 limit first (until it hits max $$ for 2014 or is past deadline in April) and then starts funding the 2015 version ?  The mechanics of that wasn't really clear to me.  I suppose choosing some initial funding amount for 2014 and 2015 was a necessary step as defining that I did indeed want an account for 2014 and 2015 tax years - am I reading that right ?

Thanks for any follow-up info you can provide !

I just maxed my Roth for 2014 and a few days later my Roth for 2015. When you are making a onetime contribution, it should be showing you how much you have left on the limits for each year. There are two "amount" boxes, one for each tax year, so you have to pick the appropriate box. Recurring/automated transactions are automatically assigned to the current tax year.

You can see the tax year of a transaction by going to the "transactions" page for your account and clicking on the date of the transaction. You can change the tax year of your latest transaction online, otherwise I think you have to call customer support to change previous transactions.