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Today me and a friend I work with were discussing money/investments, and he mentioned that Vanguard recently dropped it's minimum investments for most of their Admiral index funds from $100k to only $10k (might not really be "recent", don't know, but within a year or so I think)... The benefit of them (vs. their standard funds) are significantly lower expenses. I have previously looked at switching my investments from USAA to Vanguard, but at the time the savings would have been about 30% off the (already relatively low) expenses that I currently have, and I most certainly didn't have hundreds of thousands of dollars available to get those lowest expenses. So I didn't really consider it worth the trouble of changing.
Enter the lower Admiral expenses...
I have the money necessary to make the $10k initial investments no problem, and the savings would now be about 75%. WOW. Plus, as many of you probably know, Vanguard has a significantly larger offering in terms of selection than most smaller investment companies (such as USAA). So I'm now strongly considering making the switch. However, this brings up a number of questions, so of course, I'm coming to you all hoping for some clarification and advice...
1) First and foremost, do you think (agree) that it's worth making the switch to Vanguard?
2) Most of my investments are 3 index funds, and I'd probably like to keep essentially similar investments (S&P500, Extended Market, and GNMA bonds) if I do switch. I know there is a restriction (tax-wise) on selling one investment and buying into another similar investment within 30 days, but I honestly don't understand exactly what it is or what the implications are. Can anyone explain all this to me?
3) And if I'm moving my regular investments, I had might as well move my Roth IRA (currently ~$30k in a 2050 Retirement fund) from USAA as well, right? Similar expense savings (~75%).
4) How would I even go about changing investment companies like this? I've got about $90k (including the Roth) that I'd potentially be moving. Would I be able to just call Vanguard and they could do everything for me? Or would I need to do everything manually on my own?
5) Would anyone recommend maintaining my investment/retirement accounts at USAA after a switch? I mean that I would only keep a few hundred dollars in there to keep my investment accounts open. Just not sure if I should totally burn the bridge or not...
A bit more info to point out (if it matters...not really sure) is that I currently have about $8200 in unrealized gains in my USAA investments. Firmly in the 15% tax bracket--single, taxable income around $30k. If you have any other questions, just speak up...
So what do you all think? Any answers/opinions/advice would be VERY appreciated. Thanks!
Enter the lower Admiral expenses...
I have the money necessary to make the $10k initial investments no problem, and the savings would now be about 75%. WOW. Plus, as many of you probably know, Vanguard has a significantly larger offering in terms of selection than most smaller investment companies (such as USAA). So I'm now strongly considering making the switch. However, this brings up a number of questions, so of course, I'm coming to you all hoping for some clarification and advice...
1) First and foremost, do you think (agree) that it's worth making the switch to Vanguard?
2) Most of my investments are 3 index funds, and I'd probably like to keep essentially similar investments (S&P500, Extended Market, and GNMA bonds) if I do switch. I know there is a restriction (tax-wise) on selling one investment and buying into another similar investment within 30 days, but I honestly don't understand exactly what it is or what the implications are. Can anyone explain all this to me?
3) And if I'm moving my regular investments, I had might as well move my Roth IRA (currently ~$30k in a 2050 Retirement fund) from USAA as well, right? Similar expense savings (~75%).
4) How would I even go about changing investment companies like this? I've got about $90k (including the Roth) that I'd potentially be moving. Would I be able to just call Vanguard and they could do everything for me? Or would I need to do everything manually on my own?
5) Would anyone recommend maintaining my investment/retirement accounts at USAA after a switch? I mean that I would only keep a few hundred dollars in there to keep my investment accounts open. Just not sure if I should totally burn the bridge or not...
A bit more info to point out (if it matters...not really sure) is that I currently have about $8200 in unrealized gains in my USAA investments. Firmly in the 15% tax bracket--single, taxable income around $30k. If you have any other questions, just speak up...
So what do you all think? Any answers/opinions/advice would be VERY appreciated. Thanks!