scottrade vs. vanguard

[tinapbeana]

morning all, tina here with an opinion question for any & everyone.

i have about 7k in a 401k from my last job. it's with ML, who I liked fine, but since i don't have the job any more it's harder for me to access the account to manage it. i want to roll the balance into an IRA and convert it to a Roth IRA at the beginning of the year. i've already spoken with our accountant who feels the tax liability won't be an issue when compared to the interest that's being paid on the house and our current witholding levels.

so, i'm trying to pick a place to roll it. right now, i'm interested in vanguard and scottrade. VG b/c i've read several complimentary posts here about them ST b/c they have a $500 min balance, no acct maintenance fees, and most importantly a branch office less than 2 miles from my house. the thoughts of having a branch local make me feel all warm & fuzzy inside.

at any rate, i wanted to toss this idea out into the ether, to see if anyone had experience regarding VG vs. ST. any input is much appreciated!

[sweeps]

Re: scottrade vs. vanguard

If you're going to be doing a lot of trading -- and especially if you want to invest in funds outside of Vanguard -- go with Scottrade. If you're a passive index-fund investor, go with Vanguard.

[tinapbeana]

Re: scottrade vs. vanguard

If you're going to be doing a lot of trading -- and especially if you want to invest in funds outside of Vanguard -- go with Scottrade. If you're a passive index-fund investor, go with Vanguard.

i don't necessarily do a lot of trading, but i do eagle eye my portfolio and redistribute every 3-6 months if i feel it's appropriate (12-18% returns show this is working so far!).

ironically, one of the perks of scottrade is that they also offer vanguard. how funny!

[meaghanchan]

Re: scottrade vs. vanguard

Vanguard's brokerage arm is pretty expensive as far as brokerages go. If you're buying either a lot of single stocks, ETFs, or funds from non-Vanguard families, I would go with Scotttrade.

If you want to buy just Vanguard funds, no other funds, no ETFs, I would go with Vanguard.

(disclaimer: I have money invested with Vanguard. I have no money invested w/ Scotttrade.)

[safari]

Re: scottrade vs. vanguard

I agree with meaghanchan. If you only want to invest in Vanguard funds, then go with Vanguard; otherwise, go with Scottrade.

[Ima saver]

Re: scottrade vs. vanguard

I like vanguard and have my IRA's there, but I don't know anything about scottrade!

[poundwise]

Re: scottrade vs. vanguard


You may also want to consider TradeKing. They have been mentioned on this forum by others a couple of times and I have subsequently looked into them myself. I do not currently trade, as I am attacking debt, however, from what I could ascertain, they may be worth a look. Search the forum - they were offering a $100 bonus at one time.

[poundwise]

Re: scottrade vs. vanguard


Tina,

You may want to also consider TradeKing. Sweepsplayer posted about them a couple of months ago. They have lower commissions than Scottrade and are presently offering a $100 bonus. link

Just FYI.

[tinapbeana]

Re: scottrade vs. vanguard

Tina,

You may want to also consider TradeKing. Sweepsplayer posted about them a couple of months ago. They have lower commissions than Scottrade and are presently offering a $100 bonus. link

Just FYI.

actually, i already have a tradeking account for 'playing' with my $100 worth of stocks. scottrade, though, specifically offers a roth IRA, and these are 401k funds i'm looking roll.

[poundwise]

Re: scottrade vs. vanguard

actually, i already have a tradeking account for 'playing' with my $100 worth of stocks. scottrade, though, specifically offers a roth IRA, and these are 401k funds i'm looking roll.

TradeKing also offers a Roth IRA account.

[meaghanchan]

Re: scottrade vs. vanguard

Tina,

I'm sure you are aware of this but just want to clarify: You are not able to roll a 401(k) into a Roth IRA. You can roll it over into a regular IRA.

Though I am not sure on this point, as I don't have accounts with any brokerages- I thought all brokerages offered the ability to classify your investments as IRA investments. Am I wrong?

[poundwise]

Re: scottrade vs. vanguard

Tina,

I'm sure you are aware of this but just want to clarify: You are not able to roll a 401(k) into a Roth IRA. You can roll it over into a regular IRA.

Though I am not sure on this point, as I don't have accounts with any brokerages- I thought all brokerages offered the ability to classify your investments as IRA investments. Am I wrong?

She will be able to do it but it will take an extra step.

"A Roth IRA conversion is a two-step process. You cannot rollover your 401(k) funds directly to a Roth IRA. First, you must do a Rollover IRA. After that, you can transfer your Rollover IRA funds, called a conversion, to a Roth IRA. Caution: You must pay taxes on any money that goes into a Roth IRA." -- from InvestSafe.com

Also, I don't know if it is true of all, however, TradeKing certainly allows both standard and Roth IRA accounts.

[poundwise]

Re: scottrade vs. vanguard

Tina,

I'm sure you are aware of this but just want to clarify: You are not able to roll a 401(k) into a Roth IRA. You can roll it over into a regular IRA.

Though I am not sure on this point, as I don't have accounts with any brokerages- I thought all brokerages offered the ability to classify your investments as IRA investments. Am I wrong?

She will be able to do it but it will take an extra step.

"A Roth IRA conversion is a two-step process. You cannot rollover your 401(k) funds directly to a Roth IRA. First, you must do a Rollover IRA. After that, you can transfer your Rollover IRA funds, called a conversion, to a Roth IRA. Caution: You must pay taxes on any money that goes into a Roth IRA."

Source: InvestSafe.com


Also, I don't know if it is true of all, however, TradeKing certainly allows both standard and Roth IRA accounts.

[sweeps]

Re: scottrade vs. vanguard

Just FYI, beginning in 2008 the 2-step conversion will no longer be necessary, thanks to the Pension Protection Act of 2006.

[tinapbeana]

Re: scottrade vs. vanguard

Also, I don't know if it is true of all, however, TradeKing certainly allows both standard and Roth IRA accounts.

thanks, price: i didn't know tradeking had ira accounts as well.

for those who asked, the strategy is to roll from my 401k->traditional ira -> roth ira starting january 2007 so the money i will have to pay in taxes on the conversion will have the full calendar year to earn 5.25% in savings. i want to have a roth because of the tax-free earnings, and also b/c i can withdraw my contributions without penalty should need arise. this will alow me to keep more of my EF money in the retirement kitty earning (hopefully!) better than 5.25%

i've had the 401k with merill lynch for 4 yrs and have liked their service, it's just harder to maintain the account since i'm at a new job, and the money isn't as liquid. also, said new job doesn't offer a 401k; if they did i'd just roll into theirs.