No Load Roth

[swanson719]

So maybe I'm ignorant. I posted a comment about paying a 5.75% fee with our Roth's. I spoke with three different firms - Fidelity, Waddell & Reed, and New York Life about this to see if any of them had a Roth that had no fees attached, and none of them did. It equates to about $600 a year in fees for us for our Roths, which we're still fairly new to. So my question then is what company offers a Roth that I don't have to pay any fees for?

[SavingCash]

Look into a Roth at one of the discount brokerages like E-Trade, TD Ameritrade, etc. You'll have to manage your own investments, but pick mutual funds with low fees and you should be fine.

[kork13]

Vanguard and T. Rowe Price are also both used frequently by people around here... Their mutual funds are no-load, and their expense ratios are mostly below 1% (this is especially the case with Vanguard).

I wonder if maybe they were giving you information about some different product? A Roth is simply a retirement vehicle that "contains" your retirement assets under a specific tax umbrella. I've never heard of fees being attached to the Roth itself--just the investments within it. And at that, NEVER so high as 5.75%! Yikes...

[swanson719]

Ahh. So it's the load of the mutual funds held in the Roth. 5.75% is still high.

[disneysteve]

There are literally thousands of no-load mutual funds out there. No-load means that if you invest $1,000, the entire $1,000 goes into the fund. Nothing comes off the top as a commission to a salesperson (which is where that 5.75% is going with the load funds). Any analysis I've ever seen has come to the same conclusion: there is no reason to invest in load funds. You are in the hole before you even start because of that fat commission.

[creditcardfree]

swanson, read the prospectus of any investment. The load is listed on the first inside page of the prospectus on ALL investments.

I agree with Steve...no need to invest in no load funds.

Check out Vanguard, Fidelity, T Rowe Price and Janus...just a few of the many!

[disneysteve]

Originally Posted by creditcardfree

I agree with Steve...no need to invest in no load funds.

That should say "no need to invest in load funds".

[Goldy1]

I remember when I was in my 20's ready to put my first 2k in a roth ira. I went to Morgan STanley. I had no clue about investments at all. I went to school for teaching so I literally got 0 seconds of finance education nor had I started my journey educating myself.

The broker put me and dh is these high fee funds which something called "front loads" where broker got commision up front and something with a B attatched to it.

I could not sell them for years b/c I would be penalized. THe broker never told me that.
Then Morgan STanley started charging me about $40 at the time QUARTERLY (not yearly like fidelity does which I Think is only $10) for a low balance fee I had at the time.

I moved my money to Fidelity. Morgan STanly charged me about $100 each account(me and dh) just to move my money. It was sad. I had about 3 K in an account I was paying $40 times 4 x a year on and losing money. The fund was about 100% stocks too.

Fidelity has been good to me. When I call with questions the advisors will literally talk to me as long as I Want them to.

[creditcardfree]

Originally Posted by disneysteve

That should say "no need to invest in load funds".

Thanks Steve. You are right again!! Just a typo, but a meaningful one at that.

[skydivingchic]

Just to add to what has already been said - many firms will charge some sort of fee for low balance accounts. My Roth is with T Rowe Price. They charge $10/year for any fund you hold with a balance of less than $5000. Other firms will do it differently, but it is something to be aware of.