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  • #1

    Question about IRA

    I opened a SEP IRA last year through our local bank's investment person. My employer (nonprofit) matches $1,000 every year. When I do the payroll and bills the check for both of our portions goes directly to the investment person and is deposited into my account.

    I am thinking of rolling this over into a Vanguard account. I am interested in their 2030 fund since I am about to hit my 40s.

    Any advice on this? Is it possible to do and are there any fees I should know about? I have a little over $4,000 to roll over. Is it worth it?
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  • #2
    Re: Question about IRA

    It sounds like you want to do a trustee to trustee transfer, so there should not be any fee. You would just open a SEP IRA with Vanguard for the 2030 fund. Make sure you notify your employer, so they have records where your SEP is now located to send their match.

    It will be worth it if the investment you are moving to has a better rate of return than the current investment. Good luck and call Vanguard as you are making the switch to answer any questions.
    My other blog is Your Organized Friend.

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    • #3
      Re: Question about IRA

      Thanks! I will look into it more before I decide but I do think Vanguard has a better performance rate and I like that the fund adjusts to more conservative investments throughout the years as you get closer to retirement.

      I am the one at work that sends out the payments for the retirement funds, so that won't be a problem to change at work. No one to notify!

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      • #4
        Re: Question about IRA

        I like Vanguard and I have a retirement fund with them as well. It's really a no-brainer as David Bach says. They're all index funds and performs as the market performs. I'm really happy with this because it makes everything so much easier and in one spot. I was paying a load before and also a yearly fee to handle my ira. If you have so much in your account, there are no annual fees.

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        • #5
          Re: Question about IRA

          Just to clarify, Vanguard's funds are mostly index funds, but some are actively managed. Wellington and Windsor for example.

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          • #6
            Re: Question about IRA

            You may also want to check out T Rowe Price's Retirement Target Funds. They don't use index funds, but their funds are geared to be more "aggressive" than Vanguard's. They hold a higher stock-to-bond ratio as your plan ages. Although if you like what you see with Vanguard they're great funds too.
            The easiest thing of all is to deceive one's self; for what a man wishes, he generally believes to be true.
            - Demosthenes

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            • #7
              Re: Question about IRA

              Originally posted by kv968
              You may also want to check out T Rowe Price's Retirement Target Funds. They don't use index funds, but their funds are geared to be more "aggressive" than Vanguard's.
              This used to be the case, but not so much anymore. For example, T. Rowe's 2035 fund is 92% stock. Vanguard's 2035 fund is 90%. The difference is fairly insignificant.

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              • #8
                Re: Question about IRA

                In June, Vanguard changed their allocations of the stocks and bonds. The 2035 was about 72% Stocks and the rest Bond. They changed it. I personally have the retirement fund. You don't have to use your retirement year. I would like to have a little bit better return and Vanguard was too conservative with their stock funds. Lets say that your Retirement is in 2020; you can actually get into the 2025 fund. It's up to you.

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                • #9
                  Re: Question about IRA

                  Originally posted by Sweepsplayer
                  This used to be the case, but not so much anymore. For example, T. Rowe's 2035 fund is 92% stock. Vanguard's 2035 fund is 90%. The difference is fairly insignificant.
                  Currently the percents are very similar, but as the funds reach the retirement target and beyond, T Rowe continues to hold onto a stronger stock allocation than Vanguard...

                  With 2 years until the target date, T Rowe holds 63.5% to Vanguard's 54.33%

                  2 years after the target date, T Rowe still holds 55.1% to Vanguard's 44.4%

                  This higher percent stock holding continues throughout the post-retirement time. Of course this is all currently and Vanguard has recently upped their stock holdings in post-retirement so they may up them even higher in the future. Some say that this too much of an equity holding to have in retirement, but I'm just posing it as an option if "rduell" would like to take a more aggressive approach.

                  However as Aleta wisely stated, if you'd like to take a stronger stock stance then just go for a longer target year than actually needed. Again, Vanguard is a fine option and I may be joining some of their funds soon.
                  The easiest thing of all is to deceive one's self; for what a man wishes, he generally believes to be true.
                  - Demosthenes

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                  • #10
                    Re: Question about IRA

                    Thank you, everyone. I sent out the paperwork today to roll over into a Vanguard account.

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