Dipped under Admiral Threshold

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OatmealAddict
Posts: 1193
Joined: Fri Sep 27, 2013 4:03 pm

Dipped under Admiral Threshold

Post by OatmealAddict »

With international equities getting crushed over the last six months or so, it looks like I've dipped below the $10,000 threshold in VTIAX in my Roth IRA.

Before I knew better, I built about a $10,000 position in VBTLX in that same account and although I'm one of those who hates to sell anything, I'm wondering if wiser Bogleheads would recommend exchanging some of the bond fund for some of the international to beef the balance back up. I could do up to $5,000 or so without throwing my desired allocation out of whack too far.

My thought is that I should probably consider eventually eliminating the bonds in the Roth since I have plenty of room for them in a 401K and 403b. I'm wondering if this is the time to start, before Vanguard downgrades me.

So, any thoughts / justifications? Appreciate your feedback as always.
Last edited by OatmealAddict on Thu Jan 07, 2016 7:48 am, edited 1 time in total.
livesoft
Posts: 85971
Joined: Thu Mar 01, 2007 7:00 pm

Re: Dipped under Admiral Threshold

Post by livesoft »

Don't worry about it. Vanguard switched a fund that my spouse has to Admiral shares even though it was under the limit and has never gone over the limit since. It is down way below the limit and they haven't done anything about it.

Relax. Stay the course. Follow your asset allocation. But while you are doing that, why not calculate how much a switch to investor shares would cost you and then don't buy a drink one day while you are at lunch to make up the difference.

Of course, if your asset allocation calls for moving bonds from Roth to 401(k), then by all means do so. Don't get stuck on Admiral shares if it causes you to make bad decisions.
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jdb
Posts: 1759
Joined: Wed Dec 05, 2012 7:21 pm

Re: Dipped under Admiral Threshold

Post by jdb »

I do not understand how Vanguard does conversions from investor class to admiral class. Last week I purchased enough additional of Primecap to qualify for admiral class. Thought the conversion would be automatic. It was not done. Then this week asked Vanguard rep to do conversion, but since market went down am slightly below admiral and rep says will not allow conversion. And last month did a manual conversion of a fund from
investor to admiral in taxable account and Vanguard treated it as a taxable event with sale of investor shares and purchase of admiral. Did not have much gain in fund so not big deal, but the entire conversion process seems an enigma within a puzzle. Also disappointing that Vanguard does not process conversions once you exceed the minimum for admiral status. A disappointment in Vanguard customer relations for this customer.
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StormShadow
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Re: Dipped under Admiral Threshold

Post by StormShadow »

For me, most of my funds were automatically transitioned to Admiral soon after they reached the minimum amount and it wasn't a taxable event. The others, I purchased the minimum Admiral amount straight up ($10k).

One of my funds dipped below the $10k mark from the '08 real estate bubble burst, and I remained Admiral shares. Spoke with a Vanguard rep, who confirmed that it would not switch to investor since I did not voluntarily remove funds to let the total value go below $10k. Since then, all of the funds have grown well past their minimum cutoffs. :beer
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SpringMan
Posts: 5422
Joined: Wed Mar 21, 2007 11:32 am
Location: Michigan

Re: Dipped under Admiral Threshold

Post by SpringMan »

Generally Vanguard won't demote shares from admiral to investors due to market fluctuations. They will if you sell off some admiral shares and that drops you below the minimum, even then they first send you a warning letter and give you a chance to add dollars to bring it up. This recent market downturn brought my Tax Managed Small Cap below the minimum. In my case, I decided to tax loss harvest the fund by exchanging it into an existing position of Large Cap Index admiral.
Best Wishes, SpringMan
Grogs
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Re: Dipped under Admiral Threshold

Post by Grogs »

Good to know they don't just demote you. I bought $10k in VTSAX last night (actually $9999.99 after rounding) and dropped to about $9750 today. I was hoping I wouldn't have to keep feeding the kitty to keep it above 10k.
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Toons
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Joined: Fri Nov 21, 2008 9:20 am
Location: Hills of Tennessee

Re: Dipped under Admiral Threshold

Post by Toons »

Relax,no need to make any moves just yet. :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
LateStarter1975
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Joined: Tue Jul 02, 2013 4:50 pm

Re: Dipped under Admiral Threshold

Post by LateStarter1975 »

My thought is that I should probably consider eventually eliminating the bonds in the Roth since I have plenty of room for them in a 401K and 403b.
Yes, this is what I did. I eliminated the bonds in my Roth and left only stock funds. Now all my bonds are in my 401K as I have more space there.
Debt is dangerous...simple is beautiful
IPer
Posts: 1639
Joined: Sun Jul 28, 2013 8:51 pm

Re: Dipped under Admiral Threshold

Post by IPer »

Doesn't matter, just rebalance as you are able to. Vanguard doesn't do anything if the Admiral amounts go under. If you phone
them they will tell you how that operates.
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