Transferred Roth from NWM to Fidelity, now what?

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Roarindino
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Transferred Roth from NWM to Fidelity, now what?

Post by Roarindino » Sat Jul 15, 2017 9:15 am

I finally got rid of my Northwestern mutual fund financial advisor and transferred my Roth IRA to Fidelity. I realized the FA was not fiduciary and was selling us whole life insurance and charging high fees on the accounts. I am a complete novice to investing and would like to have funds in a low cost low maintenance account. After the transfer all the account seems to be in RALAX. Should I sell these and buy fidelity mutual funds? Or just keep RALAX and invest any future money in fidelity mutual funds?

WoodSpinner
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Re: Transferred Roth from NWM to Fidelity, now what?

Post by WoodSpinner » Sat Jul 15, 2017 9:45 am

OP,

I suggest you review the sticky on asking portfolio questions and provide a bit more information. I suggest you consider this question as part of a strategy for investing all of your assets, not just the Roth.

8-)

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BolderBoy
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Re: Transferred Roth from NWM to Fidelity, now what?

Post by BolderBoy » Sat Jul 15, 2017 11:44 am

Roarindino wrote:After the transfer all the account seems to be in RALAX. Should I sell these and buy fidelity mutual funds? Or just keep RALAX and invest any future money in fidelity mutual funds?
My memory is going. What is RALAX?
“Where you stand, depends on where you sit” - Rufus Miles | "Never underestimate one's capacity to overestimate one's abilities"

RetiredAL
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Re: Transferred Roth from NWM to Fidelity, now what?

Post by RetiredAL » Sat Jul 15, 2017 1:32 pm

RALAX = Russell Investments LifePoints Growth Strategy Fund Class A
ER=1.35%;
Front Load = 5.75%; No Back Load
M* Return Rating: Below Average

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BolderBoy
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Re: Transferred Roth from NWM to Fidelity, now what?

Post by BolderBoy » Sat Jul 15, 2017 1:40 pm

RetiredAL wrote:ER=1.35%
I'd dump it just because of this.
“Where you stand, depends on where you sit” - Rufus Miles | "Never underestimate one's capacity to overestimate one's abilities"

RetiredAL
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Re: Transferred Roth from NWM to Fidelity, now what?

Post by RetiredAL » Sat Jul 15, 2017 2:19 pm

BolderBoy wrote:
RetiredAL wrote:ER=1.35%
I'd dump it just because of this.
Unlike Fidelity's and VG target-date funds, there are also significant buried ER's from the Funds which that Fund holds. A quick examination of a few of them indicates the underlying Funds have ER's of .7 to 1.2%, so figure the total ER is likely around 2.3%. I could only find 2 the 4 of the funds I tried checking even listed on Google Finance.

billfromct
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Re: Transferred Roth from NWM to Fidelity, now what?

Post by billfromct » Sat Jul 15, 2017 4:20 pm

Who advised you to put your money into RALAX (a 5.75% sales charge fund with a high expense ratio, 1.35%) at Fidelity? Is that the fund you had at Northwestern Mutual & it was moved over to Fidelity?

I believe that Fidelity has some low cost index funds (Premium class) that don't charge "loads" or sales charges. They have expense ratios (ER) as low as .045% for the S&P 500 & Total Stock Market Index but there is a $10k minimum for the Premium Class funds.

bill

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ruralavalon
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Re: Transferred Roth from NWM to Fidelity, now what?

Post by ruralavalon » Sat Jul 15, 2017 7:30 pm

Welcome to the forum :) .

Moving the Roth IRA away from Northwestern to Fidelity was a good idea.
Roarindino wrote:I finally got rid of my Northwestern mutual fund financial advisor and transferred my Roth IRA to Fidelity. I realized the FA was not fiduciary and was selling us whole life insurance and charging high fees on the accounts. I am a complete novice to investing and would like to have funds in a low cost low maintenance account. After the transfer all the account seems to be in Russell Investments LifePoints Growth Strategy A RALAX ER 1.33%. Should I sell these and buy fidelity mutual funds? Or just keep RALAX and invest any future money in fidelity mutual funds?
It's important to look at your entire situation, not just one account. Please see the post "asking portfolio questions", and supply more information.

You should sell Russell Investments LifePoints Growth Strategy A (RALAX), Fidelity has much better funds to use, but which Fidelity fund to buy will depend on the rest of your information.

You will probably want to look at one of the Fidelity Freedom Index Funds.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Roarindino
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Re: Transferred Roth from NWM to Fidelity, now what?

Post by Roarindino » Sun Jul 16, 2017 10:08 am

Thanks for all the advise so far. Here is the more information.

Spouse and I are in early 30s. Our NWM advisor chose Russell Investments LifePoints Growth Strategy A for our Roth IRA but now we've moved it to Fidelity since we've just started educating ourselves about retirement.

401k at fidelity (previous employer): 100k
401k at Merril Lynch (current employer): 5k

my Roth IRA: 25k (just transferred from northwestern mutual to fidelity)
spouse Roth IRA: 20k (also just transferred from NWM to fidelity)

~ 6 months of emergency funds in savings

mortgage: ~500k at 3.375% (we put an additional 2k extra per month toward principle)

We don't have any taxable accounts yet. Plan to start putting away 3-4k/month now after we figure out how to invest.

Sounds like we should sell the RALAX funds because of high costs. What fidelity funds would you recommend for the Roth IRA accounts?

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ruralavalon
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Re: Transferred Roth from NWM to Fidelity, now what?

Post by ruralavalon » Sun Jul 16, 2017 10:18 am

Roarindio wrote:I finally got rid of my Northwestern mutual fund financial advisor and transferred my Roth IRA to Fidelity. I realized the FA was not fiduciary and was selling us whole life insurance and charging high fees on the accounts. I am a complete novice to investing and would like to have funds in a low cost low maintenance account. After the transfer all the account seems to be in RALAX. Should I sell these and buy fidelity mutual funds? Or just keep RALAX and invest any future money in fidelity mutual funds?
Roarindino wrote:Thanks for all the advise so far. Here is the more information.

Spouse and I are in early 30s. Our NWM advisor chose Russell Investments LifePoints Growth Strategy A for our Roth IRA but now we've moved it to Fidelity since we've just started educating ourselves about retirement.

401k at fidelity (previous employer): 100k
401k at Merril Lynch (current employer): 5k

my Roth IRA: 25k (just transferred from northwestern mutual to fidelity)
spouse Roth IRA: 20k (also just transferred from NWM to fidelity)

~ 6 months of emergency funds in savings

mortgage: ~500k at 3.375% (we put an additional 2k extra per month toward principle)

We don't have any taxable accounts yet. Plan to start putting away 3-4k/month now after we figure out how to invest.

Sounds like we should sell the RALAX funds because of high costs. What fidelity funds would you recommend for the Roth IRA accounts?
What funds are you using In each of the two 401ks? What funds are offered in each of the two 401ks? Please give fund names, tickers and expense ratios. Please see this for format: "Asking Portfolio Questions".

Will the current employer's 401k accept a rollover from the old employer's 401k? Sometimes it is better to combine old and new 401ks, if the new employer's plan allows that and the funds offered in the new plan are better or have lower expense ratios.

What is your desired asset allocation (stock/bond mix, domestic/international mix)?

It's usually better to consider all accounts together as a single unified portfolio, rather than look at each account individually. You start the fund selection in the 401ks where the fund choices are always limited and often poor or expensive. Then complete the asset allocation using the nearly unlimited fund choices offered in the IRAs or taxable account.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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BL
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Re: Transferred Roth from NWM to Fidelity, now what?

Post by BL » Sun Jul 16, 2017 11:12 am

Yes, you should follow Asking Portfolio Questions and list what you have and all available funds, their tickers, and their ERs in 401k or elsewhere. It will give you and us a much better picture of where you are and what is best going forward.
We generally look for low-ER INDEX funds if available.

Here is the Wiki page on 3-fund portfolio. A ways down it has Fidelity index funds.
Fidelity also has target date INDEX funds, they just make it harder to find them than the other more expensive target funds. They also have a single target four-in-one fund. Target date funds are a good simple substitute for separate funds.

Here is a good little PDF to get you started:
https://www.bogleheads.org/wiki/Three-fund_portfolio
The author, Dr. William Bernstein, is a recommended author who wrote this for beginner investors.
Getting Started in the Wiki is recommended.

RetiredAL
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Re: Transferred Roth from NWM to Fidelity, now what?

Post by RetiredAL » Sun Jul 16, 2017 1:31 pm

A Fidelity site search for "FIDELITY FREEDOM" will return a list of their target date funds.

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ruralavalon
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Re: Transferred Roth from NWM to Fidelity, now what?

Post by ruralavalon » Sun Jul 16, 2017 1:40 pm

RetiredAL wrote:A Fidelity site search for "FIDELITY FREEDOM" will return a list of their target date funds.
Don't consider the Fidelity Freedom Funds. They have higher expense ratios.

Consider only the Fidelity Freedom Index Funds. They have lower expense ratios.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

billfromct
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Re: Transferred Roth from NWM to Fidelity, now what?

Post by billfromct » Sun Jul 16, 2017 5:51 pm

I'm not that all that familiar with the Fidelity funds, but I believe now the Fidelity Freedom Funds are their target date funds.

Their index funds are either Investor ($2.5k minimum) or Premium Funds ($10k minimum).

In the case of the Fidelity Total Stock Market Index Fund, the Investor shares have a .09% expense ratio (ER) & the Premium Class shares have a .045% ER.

The Vanguard equivalent funds are: Total Stock Market Index: .15% ER for Investor shares ($3k minimum) & .04% ER for Admiral shares ($10k minimum)

bill

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AllieTB1323
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Re: Transferred Roth from NWM to Fidelity, now what?

Post by AllieTB1323 » Sun Jul 16, 2017 6:40 pm

ruralavalon wrote:
RetiredAL wrote:A Fidelity site search for "FIDELITY FREEDOM" will return a list of their target date funds.
Don't consider the Fidelity Freedom Funds. They have higher expense ratios.

Consider only the Fidelity Freedom Index Funds. They have lower expense ratios.
Yup, Fido has about 33 target dated funds of which it looks like 22 are index funds with er's from 0.10 to about 0.15%.

I googled "fidelity Freedom Index funds" and went to their site.

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