Switching to Vanguard

[rjbf65]

I started the process of moving my and DW Roth IRA's to Vanguard.  Tough part about it is the broker we have dealt with is somewhat of a family friend.  I just can't get over the 1.2% per year charge.  It's taken me a few years to finally make this move but it's put in motion now.

I'm 33 and DW is 27.  My Roth has $40K and hers $20K.  We plan to max out every year going forward.  What funds are recommended?  My thoughts were throw it all in VTSAX and let it ride.  Anyone do the target retirement funds? 

FWIW she has Public School Retirement system she has to participate in.  They take 14% out and I have a 401K at work that I put 15% in currently.  We are doing around 25% overall to retirement right now.  Which is great compared to most 30 soemthing year olds but probably below average to mustachian standards.   

[NoStacheOhio]

Your fund choice is going to depend on your appetite for risk. Figure out what asset classes you want to hold, and in what ratio. From there, figure out the cheapest way to achieve that balance across all of your accounts.

Completely made-up scenario:
You decide you want 60/20/20 in US/International/Bonds

Say your 401k has a great US index fund option, but the international fund is crappy, and your wife has good options for all three. Only buy the cheap US index fund in your 401k, buy all three in your wife's account, and then balance out the remainder using the cheap index funds at Vanguard. You may not be able to achieve the exact ratio you want all the time due to fluctuations and contribution limits, but you can get close.

[rjbf65]

Your fund choice is going to depend on your appetite for risk. Figure out what asset classes you want to hold, and in what ratio. From there, figure out the cheapest way to achieve that balance across all of your accounts.

Completely made-up scenario:
You decide you want 60/20/20 in US/International/Bonds

Say your 401k has a great US index fund option, but the international fund is crappy, and your wife has good options for all three. Only buy the cheap US index fund in your 401k, buy all three in your wife's account, and then balance out the remainder using the cheap index funds at Vanguard. You may not be able to achieve the exact ratio you want all the time due to fluctuations and contribution limits, but you can get close.

My 401K is currently in Vanguard indexes.  90% in S&P and 10% in Bond index.  Wife's retirment is more of a pension.  Her 14% goes into a big pot and gets matched by the school district.  Then depending on how many years she teaches she will get a certain percentage of whatever her best paid teaching years at retirement.  They say its a great program but we have no control over anything. 

I'm looking forward to creating my mix and letting it ride.  The Jim Collins Stock Series is what finally gave me the push to do this.  Hopefully its the right move.   

[NoStacheOhio]

Your fund choice is going to depend on your appetite for risk. Figure out what asset classes you want to hold, and in what ratio. From there, figure out the cheapest way to achieve that balance across all of your accounts.

Completely made-up scenario:
You decide you want 60/20/20 in US/International/Bonds

Say your 401k has a great US index fund option, but the international fund is crappy, and your wife has good options for all three. Only buy the cheap US index fund in your 401k, buy all three in your wife's account, and then balance out the remainder using the cheap index funds at Vanguard. You may not be able to achieve the exact ratio you want all the time due to fluctuations and contribution limits, but you can get close.

My 401K is currently in Vanguard indexes.  90% in S&P and 10% in Bond index.  Wife's retirment is more of a pension.  Her 14% goes into a big pot and gets matched by the school district.  Then depending on how many years she teaches she will get a certain percentage of whatever her best paid teaching years at retirement.  They say its a great program but we have no control over anything. 

I'm looking forward to creating my mix and letting it ride.  The Jim Collins Stock Series is what finally gave me the push to do this.  Hopefully its the right move.

In that case, I would just mirror your 401K (assuming you're happy with that setup). You may also consider treating wife's pension like a bond. Sucks that you don't have any control. My wife was an adjunct at a public college for a little while, and was able to choose a self-directed, defined-contribution plan.

[dandarc]

A lot of public schools offer a 403B and / or a 457B in addition to the pension.

You might want to see if those are offered.

[alex753]

I started the process of moving my and DW Roth IRA's to Vanguard.  Tough part about it is the broker we have dealt with is somewhat of a family friend.  I just can't get over the 1.2% per year charge.  It's taken me a few years to finally make this move but it's put in motion now.

I'm 33 and DW is 27.  My Roth has $40K and hers $20K.  We plan to max out every year going forward.  What funds are recommended?  My thoughts were throw it all in VTSAX and let it ride.  Anyone do the target retirement funds? 

FWIW she has Public School Retirement system she has to participate in.  They take 14% out and I have a 401K at work that I put 15% in currently.  We are doing around 25% overall to retirement right now.  Which is great compared to most 30 soemthing year olds but probably below average to mustachian standards.

Great decision.  Keep it simple at Vanguard.  Do what you are doing with your 401K (2 fund portfolio), or you could add an international index fund.  Or, go the simplest route possible and use the Vanguard Target Date funds.  That is what I do with almost all of my 401K - Vanguard Target 2035.  They have Domestic and International stock and bond exposure and automatically re-balance and adjust as you proceed to retirement.

Also, don't forget you can choose the Target Date stock/bond allocation that best fits your risk tolerance.  In other words you don't have to automatically pick the date you turn 65, etc. or when you plan to early retire.  Look at their allocation models and decide how much volatility you believe you'd be comfortable with, so that you never sell while you are accumulating.

https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations

 

[rjbf65]

I started the process of moving my and DW Roth IRA's to Vanguard.  Tough part about it is the broker we have dealt with is somewhat of a family friend.  I just can't get over the 1.2% per year charge.  It's taken me a few years to finally make this move but it's put in motion now.

I'm 33 and DW is 27.  My Roth has $40K and hers $20K.  We plan to max out every year going forward.  What funds are recommended?  My thoughts were throw it all in VTSAX and let it ride.  Anyone do the target retirement funds? 

FWIW she has Public School Retirement system she has to participate in.  They take 14% out and I have a 401K at work that I put 15% in currently.  We are doing around 25% overall to retirement right now.  Which is great compared to most 30 soemthing year olds but probably below average to mustachian standards.

Great decision.  Keep it simple at Vanguard.  Do what you are doing with your 401K (2 fund portfolio), or you could add an international index fund.  Or, go the simplest route possible and use the Vanguard Target Date funds.  That is what I do with almost all of my 401K - Vanguard Target 2035.  They have Domestic and International stock and bond exposure and automatically re-balance and adjust as you proceed to retirement.

Also, don't forget you can choose the Target Date stock/bond allocation that best fits your risk tolerance.  In other words you don't have to automatically pick the date you turn 65, etc. or when you plan to early retire.  Look at their allocation models and decide how much volatility you believe you'd be comfortable with, so that you never sell while you are accumulating.

https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations

Thanks for the link and the advice.  Hardest part of this process was "breaking up" with the Investnent broker guy who I do genuinely like.  I just dont like to pay 1.2% for something I can handle.

Now I'm just waiting on the funds to show up.  It says the transfer has been complete but still isn't reflecting so in my balances.  Makes the heart skip a beat.  Anyone else remember this happening?