Advice on My Retirement Options

[jgraham114]

I'm looking for advice on what to do to plan for retirement for my wife and I. My wife and I are both 28 years old with two kids and one on the way. I will list what I have now below.

Current Situation/Accounts:

-Trad. IRA (401k rollover from previous employer)
-401k (no match)
-401k (Wife's w/ matching)

As of right now, I contribute 6% to my 401k and my wife contributes at least the match if not more (I'm not sure what her contribution is right now). I don't know how to put money in my Trad. IRA and I don't know how to start investing it. Collectively our yearly salaries are around $80,000.

My main questions are what to do with the Trad. IRA. Should/can I convert this to a Roth IRA? How do I contribute money to either and how should I invest that money? I know little about stocks and investing. Any recommended reading to help with retirement?

Thanks in advance. Let me know if you need more information to provide better advice.
-Jason

[Petunia 100]

Who is the custodian of your traditional IRA? Typically, you invest more money either by mailing a check or by linking your checking account for electronic transfers. Then, you can order transfers either online or by calling the custodian's customer service number.

As for how to invest, I think a single well-diversified fund is often a good choice. Vanguard, for example, has excellent Target Retirement funds.

Whether or not you should convert to a Roth depends on your overall situation. How much is in the traditional IRA and what tax bracket you are in must be considered. Keep in mind you can convert any part of the money, it doesn't have to be an all or nothing decision.

[jgraham114]

Who is the custodian of your traditional IRA? Typically, you invest more money either by mailing a check or by linking your checking account for electronic transfers. Then, you can order transfers either online or by calling the custodian's customer service number.

As for how to invest, I think a single well-diversified fund is often a good choice. Vanguard, for example, has excellent Target Retirement funds.

Whether or not you should convert to a Roth depends on your overall situation. How much is in the traditional IRA and what tax bracket you are in must be considered. Keep in mind you can convert any part of the money, it doesn't have to be an all or nothing decision.

The IRA is with Wells Fargo so my accounts would be linked already. How do I make the transferred money tax free? deduct it on my taxes?

[Petunia 100]

The IRA is with Wells Fargo so my accounts would be linked already. How do I make the transferred money tax free? deduct it on my taxes?

Do you have a Wells Trade brokerage account? If yes, great. (I have my own traditional IRA in a Wells Trade brokerage account). If not, you want to reconsider your choice of custodian. You do not want to buy a bunch of load funds, which is exactly what a Wells Fargo advisor is going to sell you.

Yes, you deduct traditional IRA contributions on your 1040. Your custodian will eventually send you a form and report your contributions to the IRS. You don't need to wait for this form to file your tax return.

[jgraham114]

Do you have a Wells Trade brokerage account? If yes, great. (I have my own traditional IRA in a Wells Trade brokerage account). If not, you want to reconsider your choice of custodian. You do not want to buy a bunch of load funds, which is exactly what a Wells Fargo advisor is going to sell you.

Yes, you deduct traditional IRA contributions on your 1040. Your custodian will eventually send you a form and report your contributions to the IRS. You don't need to wait for this form to file your tax return.

How do you tell what type of account it is? I believe it is a brokerage account, I don't have an advisor for it.

[Petunia 100]

When you log on to your account, what do you see? Does it look like this?


How much do you have to pay to make a trade? I don't know, because I get 100 free per year. I never use them all, so have never paid.


Edit: It doesn't show up. Do you see the paperclip icon after the thread title on the previous screen? Click on that.

[jgraham114]

When you log on to your account, what do you see? Does it look like this?


How much do you have to pay to make a trade? I don't know, because I get 100 free per year. I never use them all, so have never paid.


Edit: It doesn't show up. Do you see the paperclip icon after the thread title on the previous screen? Click on that.

It does not look like that. It says "Brokerage" where yours says Traditional IRA.

I have never made a trade so I don't know if I have to pay. I don't know what I should invest/trade in...

Edit: It looks like when I try to buy Vanguard Target Retirement fund there is a $35 Fee

[Petunia 100]

It does not look like that. It says "Brokerage" where yours says Traditional IRA.

I have never made a trade so I don't know if I have to pay. I don't know what I should invest/trade in...

Edit: It looks like when I try to buy Vanguard Target Retirement fund there is a $35 Fee

You could transfer the account to Vanguard. I believe WF will assess a one-time $50 fee to transfer your assets out. However, once at Vanguard you can buy as often as you like with no fees.

If you want to do that, you can do it on Vanguard's website, or call their 800 number if you need help.

If you put in an order for an ETF, does it warn you of a fee? Try buying 1 share of VTI (don't confirm the order, we just want to see if there is a fee).

Or, as a last resort , just give WF a call and ask them what each trade will cost.

[jgraham114]

You could transfer the account to Vanguard. I believe WF will assess a one-time $50 fee to transfer your assets out. However, once at Vanguard you can buy as often as you like with no fees.

If you want to do that, you can do it on Vanguard's website, or call their 800 number if you need help.

If you put in an order for an ETF, does it warn you of a fee? Try buying 1 share of VTI (don't confirm the order, we just want to see if there is a fee).

Or, as a last resort , just give WF a call and ask them what each trade will cost.

There was a fee for $8.95

[Petunia 100]

There was a fee for $8.95

Then I suggest you pay the one-time fee to transfer the entire account to Vanguard. In the long run, it will cost far less.

If you really don't want to do that, I suggest finding an acceptable mutual fund you can buy with no transaction fees. Check T. Rowe Price, will WF let you buy a T. Rowe Price target retirement fund with no fee? Those funds are good, but IMO not excellent.

(Some mutual fund companies will compensate a broker for offering their funds. You do pay for this, through higher annual expense ratios. Vanguard refuses to compensate any brokers for offering their funds, and so WF wants a $35 fee.)