simple IRA at vanguard - rollover to an Rollover IRA account?

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xtallographer
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Joined: Tue Feb 10, 2015 2:31 pm

simple IRA at vanguard - rollover to an Rollover IRA account?

Post by xtallographer » Tue Jan 23, 2018 12:09 am

I have a simple IRA account at Vanguard, from a previous employer. Now I want to rollover my 401(A) from TIAA to vanguard, so I will open a rollover IRA account at Vanguard to receive the TIAA fund.
Now since I have a rollover IRA at vanguard, is it necessary to also rollover the Simple IRA into this newly created Rollover IRA account, so the funds from TIAA 401(a) and this vanguard simple IRA are combined together?
What the advantage of doing so or in-advantage of not doing so?

Thanks a lot for any comments.

Spirit Rider
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Re: simple IRA at vanguard - rollover to an Rollover IRA account?

Post by Spirit Rider » Tue Jan 23, 2018 1:29 am

How long have you had this SIMPLE IRA? You can only rollover a SIMPLE IRA to other retirement accounts other than another SIMPLE IRA two years after the first contribution.

If the SIMPLE IRA was from a W-2 employer and not from self-employment. It along with assets in the 401a would receive better federal asset protection than a rollover IRA.

It neither of these are concerns, there is certainly a simplicity and potential cost benefit to consolidating all assets to a single rollover IRA.

It certainly is not necessary to do so.

krow36
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Location: WA

Re: simple IRA at vanguard - rollover to an Rollover IRA account?

Post by krow36 » Tue Jan 23, 2018 2:11 am

Beyond the concerns mentioned by Spirit Rider:
COST: Vanguard SIMPLE IRAs have an account service fee of $25 per fund per year and their lower cost Admiral class funds are not available.
Vanguard traditional (rollover) (and Roth) IRA's have no account service fee if one is signed up for e-delivery or have 10k in all Vanguard accounts. Admiral class funds are available.

I believe Vanguard allows more than one traditional IRA and they number them. You would not have to combine all the rollovers into one tIRA. In the future if you wanted to roll the tIRAs into an employer's plan, it might be preferable to have IRAs that did not contain multiple rollover accounts? If in the future you wanted to do a backdoor Roth, you would need to move all non-Roth IRAs into a 401k or a 403b plan.

xtallographer
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Joined: Tue Feb 10, 2015 2:31 pm

Re: simple IRA at vanguard - rollover to an Rollover IRA account?

Post by xtallographer » Tue Jan 23, 2018 7:09 am

Spirit Rider wrote:
Tue Jan 23, 2018 1:29 am
How long have you had this SIMPLE IRA? You can only rollover a SIMPLE IRA to other retirement accounts other than another SIMPLE IRA two years after the first contribution.

If the SIMPLE IRA was from a W-2 employer and not from self-employment. It along with assets in the 401a would receive better federal asset protection than a rollover IRA.

It neither of these are concerns, there is certainly a simplicity and potential cost benefit to consolidating all assets to a single rollover IRA.

It certainly is not necessary to do so.
Thank you. This account has <2 years history, and from a W-2 job. So I have to wait.

xtallographer
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Re: simple IRA at vanguard - rollover to an Rollover IRA account?

Post by xtallographer » Tue Jan 23, 2018 7:15 am

krow36 wrote:
Tue Jan 23, 2018 2:11 am
Beyond the concerns mentioned by Spirit Rider:
COST: Vanguard SIMPLE IRAs have an account service fee of $25 per fund per year and their lower cost Admiral class funds are not available.
Vanguard traditional (rollover) (and Roth) IRA's have no account service fee if one is signed up for e-delivery or have 10k in all Vanguard accounts. Admiral class funds are available.

I believe Vanguard allows more than one traditional IRA and they number them. You would not have to combine all the rollovers into one tIRA. In the future if you wanted to roll the tIRAs into an employer's plan, it might be preferable to have IRAs that did not contain multiple rollover accounts? If in the future you wanted to do a backdoor Roth, you would need to move all non-Roth IRAs into a 401k or a 403b plan.
Thank you for the fee information. There is no much fund in the account (<10K).
right now I have 401A at TIAA, 401A and 403b at VALIC (both are in the process of rolling over to Vanguard tIRA), and TSP. So if I keep at least one of TIAA (real estate) or TSP, in future if I want to do backdoor roth IRA, it will be possible, right? i.e. I can move the fund from Vanguard rollover IRA to TSP or to TIAA and then do backdoor roth IRA conversion from there. Is this correct?

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Duckie
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Re: simple IRA at vanguard - rollover to an Rollover IRA account?

Post by Duckie » Wed Jan 24, 2018 7:20 pm

xtallographer wrote:right now I have 401A at TIAA, 401A and 403b at VALIC (both are in the process of rolling over to Vanguard tIRA), and TSP. So if I keep at least one of TIAA (real estate) or TSP, in future if I want to do backdoor roth IRA, it will be possible, right? i.e. I can move the fund from Vanguard rollover IRA to TSP or to TIAA and then do backdoor roth IRA conversion from there. Is this correct?
As long as you have a TSP account you can roll into it. I'm doubtful about rolling into a 401a at a former employer. You should check with TIAA about this.

chonp3
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Re: simple IRA at vanguard - rollover to an Rollover IRA account?

Post by chonp3 » Wed Jan 24, 2018 8:24 pm

I created a new Trad IRA after two years had elapsed on my Vanguard SIMPLE and do yearly transfers from SIMPLE to IRA. This achieves a .1 lower expense ratio. Not much immediate savings, but compounded I figure it's worth it for the minimal amount of work. I guess i'm still paying the $25/yr fee per fund since I always have some in the account.

Speaking with the Vanguard rep, no "rollover" action or forms are needed, just a fund transfer from one account to the other.

thangngo
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Re: simple IRA at vanguard - rollover to an Rollover IRA account?

Post by thangngo » Wed Jan 24, 2018 8:26 pm

chonp3 wrote:
Wed Jan 24, 2018 8:24 pm
I created a new Trad IRA after two years had elapsed on my Vanguard SIMPLE and do yearly transfers from SIMPLE to IRA. This achieves a .1 lower expense ratio. Not much immediate savings, but compounded I figure it's worth it for the minimal amount of work. I guess i'm still paying the $25/yr fee per fund since I always have some in the account.

Speaking with the Vanguard rep, no "rollover" action or forms are needed, just a fund transfer from one account to the other.
Can you transfer the entire SIMPLE IRA to Traditional IRA and close the SIMPLE IRA so that you don't have the pay $25 fee every year?

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Duckie
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Re: simple IRA at vanguard - rollover to an Rollover IRA account?

Post by Duckie » Wed Jan 24, 2018 10:22 pm

thangngo wrote:
chonp3 wrote:I created a new Trad IRA after two years had elapsed on my Vanguard SIMPLE and do yearly transfers from SIMPLE to IRA. This achieves a .1 lower expense ratio. Not much immediate savings, but compounded I figure it's worth it for the minimal amount of work. I guess i'm still paying the $25/yr fee per fund since I always have some in the account.
Can you transfer the entire SIMPLE IRA to Traditional IRA and close the SIMPLE IRA so that you don't have the pay $25 fee every year?
It's most likely that in chonp3's case the SIMPLE IRA is at the current employer and needs to be left open for ongoing contributions.

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