• SIMPLE IRA, Meet Vanguard

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    I’ve written in the past about my dissatisfaction with my SIMPLE IRA plan administrator. In the past few months I decided to move my hard earned dollars elsewhere. And by elsewhere I mean Vanguard.

    As I stated before, our plan administrator is also the guy who manages all of the money for the higher ups in our company…the same higher ups that I had to get sign the paperwork so that I can transfer my funds. Tricky.

    I’ve decided that I would approach this in the most professional way that I can think of: just be straightforward with everyone. Here’s how it all went down.

    1. Research new home for SIMPLE IRA. I would have loved to have moved to Fidelity since I already have a Roth IRA with them, but they don’t take “orphaned” accounts; I’d have to get everyone in my company to go along with. The other choices were T. Rowe Price, Schwab, and Vanguard. I ultimately chose Vanguard because I like the idea behind low cost index funds.

    2. Call broker. Notify him that I’ll be changing brokerages and to expect an asset transfer form. Ask him to close the account as soon as the asset transfer is completed. Of course he didn’t sound pleased when I told him. He asked why I was moving my funds, to which I replied, “I just like doing this stuff myself.” And by that I mean I don’t like getting whacked by your fees. Nothing personal, dude.

    3. Approached higher up who needs to sign paperwork. Explained that I’m moving SIMPLE IRA. Handed over paperwork. Smooth transaction.

    4. Wait.

    5. Account opened!

    6. Mail in asset transfer form. Wait.

    7. Assets are transfered! Woo!

    A few months ago I listed the contents of both of our investment portfolios. We’ve made some changes, but the biggest one is the liquidation of JCLGX and the acquisition of Vanguard Target Retirement 2045 Fund (VTIVX). I did have to take a 1% hit on the assets I had in JCLGX for less than a year; I minimized this by asking my old broker to stop putting money into that fund way back in February. Thus, about $4,000 was subject to that fee – I can live with a $40 hit now to save in fees and expenses down the line.

    The only thing that I don’t like about having my SIMPLE IRA with Vanguard is their $25 fee for each mutual fund you have. This fee can NOT be waived by signing up for the e-service package, but can be waived once I have more than $100,000 total in all Vanguard accounts. Fortunately, the minimum balance fees are waived for funds in a SIMPLE IRA.

    Now that this has all been completed, I’ll revisit our “Planning the Joint Retirement Portfolio” (Part 1 Part 2 Part 3) series. It’s only been on hold for the past 3.5 months.

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