Roth IRA Transfer from NMLI to Vanguard

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MoneyKnuckleHead
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Roth IRA Transfer from NMLI to Vanguard

Post by MoneyKnuckleHead » Fri Feb 02, 2018 2:52 pm

Hello all, I'm new! :)

After my wife met with a Fidelity guy (a free service through her employer) he noticed she wasn't maxing her 401k contributions and had started funneling funds away from her Roth...to a WL policy sold to her as a retirement investment vehicle by NMLI. She's a nurse and got bamboozled...which seems to be a common strategy for NMLI and folks in the medical field.

She set this up before we were together and I'm, as my username gives away, a complete knucklehead with money. I met the NMLI guy and he seemed nice, up front and honest (hah!). Seemed like she was in good hands. Until this Fidelity meeting I was willing to remain outside the money part of our relationship. Now the big bad husband has to get all edjumacated on personal finance issues and take the reins.

Our first step was liquidating the WL policy. Well, policies...we had a baby a year ago and those unsavory NMLI guys sold her a WL policy for him too! *sigh* That money is now being allocated to pay off the high interest parts of our school loans (those with an interest rate higher than 5%). About 21k was returned to us from the WL policies. It's sitting in our checking account as we dole it out.

So, given the unsavory nature of these salesmen we have decided to pull all of our accounts with them. After a lot of reading, (Boglehead's Guide, Tobias' Only Guide You'll Need and Bogleheads.org) we have decided that Vanguard offers some of the lowest cost investing around.

That's the lead-in.

Her current Roth is allocated thusly:
FIUSX FIRST INVESTORS OPPORTUNITY 44.83% 366.625 $42.72 $15,662.22 (ER 1.20)
FISSX FIRST INVESTORS SPECIAL SITUATIONS 40.84% 438.217 $32.56 $14,268.35 (ER 1.31)
FEYAX FIDELITY ADVISOR ASSET MANAGER 85% FUND CLASS A 12.11% 208.149 $20.32 $4,229.59 (ER 1.03)
GMMB GENERAL MONEY MARKET FUND CLASS B 2.22% 776.180 $1.00 $776.18 (ER .44)
TOTAL100% $34,936.34

She's also got a "Transfer on Death Individual" account in GMMB GENERAL MONEY MARKET FUND CLASS B for $3366.73 through NMLI. I think it's just a money market account for use as an emergency fund. She has also been doing well with her 401k through work, but we aren't messing with that just yet as it isn't with NMLI.

What all this boils down to...what should we choose for funds within her new Vanguard Roth? She's 33 and I'm 43. I figure 25-30 more years of working. I am looking at VFORX.

We also want to get something started for our kid for college...or whatever he wants to do after high school. I am a small business owner with zero retirement and I'll be looking into my options moving forward. Maybe a SIMPLE 401k or a SEP. (You're probably thinking I'm the last person in the world that should be taking the reins of his family's finances, but now that I'm in the know (!) and married and kidded, the majority of my income will be going into retirement savings of some sort). I'm currently a stay at home dad running a private fitness training studio and nutrition business. My wife is a Nurse Practitioner. Our household income is about 160k.

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Duckie
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by Duckie » Fri Feb 02, 2018 7:01 pm

MoneyKnuckleHead, welcome to the forum.
MoneyKnuckleHead wrote:Her current Roth is allocated thusly:
Have her liquidate this and after opening a Roth IRA account, have Vanguard "pull" the cash in a trustee-to-trustee transfer. It's better to have the new custodian "pull" the assets than have the old custodian "push". The new custodian has the incentive to get it done.
What all this boils down to...what should we choose for funds within her new Vanguard Roth? She's 33 and I'm 43. I figure 25-30 more years of working. I am looking at VFORX.
What she chooses will depend on what other retirement accounts you (both of you) have. You look at all accounts earmarked for retirement as one portfolio. And you usually start with employer plans because they frequently have the most limited options. So she has a 401k and a Roth IRA. What are the options in her 401k? List the fund names, ticker symbols, and plan expense ratios. (We absolutely need the expense ratios. Costs are usually the first thing we look at.)
We also want to get something started for our kid for college...or whatever he wants to do after high school.
Check out 529 plan.
I am a small business owner with zero retirement and I'll be looking into my options moving forward. Maybe a SIMPLE 401k or a SEP. (You're probably thinking I'm the last person in the world that should be taking the reins of his family's finances, but now that I'm in the know (!) and married and kidded, the majority of my income will be going into retirement savings of some sort). I'm currently a stay at home dad running a private fitness training studio and nutrition business.
Do you have employees?

MoneyKnuckleHead
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by MoneyKnuckleHead » Sat Feb 03, 2018 12:23 pm

Duckie wrote:
Fri Feb 02, 2018 7:01 pm
MoneyKnuckleHead, welcome to the forum.

Thanks! And thanks for the info so far!
MoneyKnuckleHead wrote:Her current Roth is allocated thusly:
Have her liquidate this and after opening a Roth IRA account, have Vanguard "pull" the cash in a trustee-to-trustee transfer. It's better to have the new custodian "pull" the assets than have the old custodian "push". The new custodian has the incentive to get it done.

Is the liquidation something that can be done via NMLI's website or do I need to call them to do it? They are being uncommunicative. Also, I'm under the impression that as long as we liquidate without withdrawing the funds, and are transferring them to another IRA, we won't pay any taxes on the funds. What is the "holding" account called in this case? (as in where do the funds go after liquidation but before being "pulled" by Vanguard?)
What all this boils down to...what should we choose for funds within her new Vanguard Roth? She's 33 and I'm 43. I figure 25-30 more years of working. I am looking at VFORX.
What she chooses will depend on what other retirement accounts you (both of you) have. You look at all accounts earmarked for retirement as one portfolio. And you usually start with employer plans because they frequently have the most limited options. So she has a 401k and a Roth IRA. What are the options in her 401k? List the fund names, ticker symbols, and plan expense ratios. (We absolutely need the expense ratios. Costs are usually the first thing we look at.)

Her 401(k) is currently all in one fund, the Vanguard Target Retirement 2050 Trust II (ER: .08)
401(k) options:
Target Date Funds: Vanguard Target (2015-2060; ER .08 all) and Vanguard Target Retirement Income Trust II (ER .08)
Core Funds:
DODGE & COX STOCK--- DODGX--- .52
MASSMUTUAL SAGIC--- SAGIC--- .69
MFS INST INTL EQUITY--- MIEIX--- .71
PIM TOTAL RT INST--- PTTRX--- .46
TRP INST LGCAP GRTH--- TRLGX--- .56
VANG EXT MKT IDX ADM--- VEXAX--- .08
VANG INFL PROT ADM--- VAIPX--- .1
VANG TOT BD MKT ADM--- VBTLX--- .05
VANG TOT INTL STK AD--- VTIAX--- .11
VANGUARD INST INDEX--- VINIX--- .035
WM BLAIR SMIDCP GR I--- WSMDX--- 1.1

She also the option of choosing Self-Directed (through BrokerageLink) or Managed.

We also want to get something started for our kid for college...or whatever he wants to do after high school.
Check out 529 plan.

We looked at 529 Plans but our concerns are; will he even want to go to traditional university or college, or will he want to stay in our current state of residence?
I am a small business owner with zero retirement and I'll be looking into my options moving forward. Maybe a SIMPLE 401k or a SEP. (You're probably thinking I'm the last person in the world that should be taking the reins of his family's finances, but now that I'm in the know (!) and married and kidded, the majority of my income will be going into retirement savings of some sort). I'm currently a stay at home dad running a private fitness training studio and nutrition business.
Do you have employees?
I do not have employees.

I want to say that I truly appreciate this website and everything you Bogleheads do for the investing community :) I'd be stuck with a NMLI "financial advisor" for the rest of my natural life if you all weren't around.

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Duckie
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by Duckie » Sat Feb 03, 2018 6:40 pm

MoneyKnuckleHead wrote:Is the liquidation something that can be done via NMLI's website or do I need to call them to do it?
I don't know the procedure at NMLI.
I'm under the impression that as long as we liquidate without withdrawing the funds, and are transferring them to another IRA, we won't pay any taxes on the funds.
That's correct. As long as you don't withdraw the money from the IRA there are no taxes involved. And moving an IRA from one custodian to another is also not taxable.
What is the "holding" account called in this case? (as in where do the funds go after liquidation but before being "pulled" by Vanguard?)
I don't know what the options are at NMLI. In some places it's called a settlement account. In other places it's a cash or money market account. She could also just have Vanguard pull cash and NMLI could liquidate it themselves before transferring it.
401(k) options:
The best options are:
  • VANGUARD INST INDEX VINIX .035 -- Large caps, 80% of US stocks
  • VANG EXT MKT IDX VEXAX .08 -- Mid/small caps, 20% of US stocks
  • VANG TOT INTL STK VTIAX .11 -- Complete international stocks
  • VANG TOT BD MKT VBTLX .05 -- US bonds
  • Or the Target Retirement fund that comes closest to your desired AA
She also the option of choosing Self-Directed (through BrokerageLink) or Managed.
Both unnecessary. The above options cover everything needed.
We looked at 529 Plans but our concerns are; will he even want to go to traditional university or college, or will he want to stay in our current state of residence?
529 plans are transferable to the beneficiary's (your son's) family. The 529 can be used in any state. You don't have to even have a 529 from your own state although your state may have an income tax deduction for contributions. Plus now you can also use it for K-12 tuition and expenses.
I do not have employees.
With self-employment and no employees you have three options:
  1. SIMPLE IRA -- contribute up to $12.5K as employEE plus 3% matching as employER.
  2. SEP IRA -- contribute up to ~20% of net income as employER. (Plus you could contribute your $5.5K personal TIRA amount here, although you shouldn't. Keep them separate. TIRAs are more maneuverable than SEP IRAs.)
  3. Solo 401k -- contribute up to $18.5K as employEE (either pre-tax or Roth) plus up to ~20% of net income as employER.

MoneyKnuckleHead
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by MoneyKnuckleHead » Tue Feb 06, 2018 12:20 pm

Excellent Duckie, thank you for the guidance thus far!

As far as her 401k is concerned...

Asset Allocation within the Vanguard Target Retirement 2050 Trust II is as follows:

Fund Category Average
Cash 1.19%
Convertibles 0.00%
Domestic Bond 6.38%
Preferred Stock 0.03%
Foreign Bond 3.23%
Foreign Stock 35.01%
Others 0.76%
Domestic Stock 53.39%

That's approximately a 90/10 (stocks/bonds) split, if I'm reading it right. Does that seem ok given our age and target date of retirement? (Wife is 33, I'm 43, target date of retirement 2045 (age 60ish for the wife)).
You said:
The best options are:
VANGUARD INST INDEX VINIX .035 -- Large caps, 80% of US stocks
VANG EXT MKT IDX VEXAX .08 -- Mid/small caps, 20% of US stocks
VANG TOT INTL STK VTIAX .11 -- Complete international stocks
VANG TOT BD MKT VBTLX .05 -- US bonds
Or the Target Retirement fund that comes closest to your desired AA
So, are we better off with the Target Retirement fund or should we reallocate into the above funds? And if reallocation is advised, given the asset allocation guideline of "1% bonds per year of age" how would we go about divvying up those allocations?
Example:
(30%) in VANGUARD INST INDEX VINIX .035 -- Large caps, 80% of US stocks
(20%) in VANG EXT MKT IDX VEXAX .08 -- Mid/small caps, 20% of US stocks
(20%) in VANG TOT INTL STK VTIAX .11 -- Complete international stocks
(30%) in VANG TOT BD MKT VBTLX .05 -- US bonds

Next topic:
Choosing funds in her Roth IRA that we want to rollover to Vanguard from Northwestern.

I'm reading https://www.bogleheads.org/wiki/Tax-eff ... _placement for the third time. I find anything to do with taxes pretty confusing. The guide states "If your investments are all in tax-advantaged accounts, fund placement will not have a large impact on your returns. Tax-advantaged accounts include tax-deferred accounts, such as 401(k) and 403b, and tax-free accounts such as Roth IRA."

Given that our current retirement portfolio (I use that term loosely) consists of only the 401k and Roth IRA, I take it we need not worry about figuring out a taxable account?

So choosing funds for the Roth IRA should boil down to...what?

Allocating funds between the 401k and the Roth should be done...but how?

Looking at both accounts as one portfolio, and allocating 70% stocks and 30% bonds (is that too passive?) should we divvy up the 401k and Roth in the same way? Or should one focus on stocks (domestic/international) while the other focuses on bonds? This is where I get thoroughly confused!

I've been perusing the Wiki for guidance on this specific subject but I'm not finding what I know must be there. If you know where I should go to gain a better understanding of this, please feel free to link it. I don't want you to spend your time teaching Remedial Investing 101 if the info is already laid out somewhere else.

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Duckie
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by Duckie » Tue Feb 06, 2018 6:14 pm

MoneyKnuckleHead wrote:Asset Allocation within the Vanguard Target Retirement 2050 Trust II is as follows:
<snip>
That's approximately a 90/10 (stocks/bonds) split, if I'm reading it right. Does that seem ok given our age and target date of retirement? (Wife is 33, I'm 43, target date of retirement 2045 (age 60ish for the wife)).
At your ages I'd go at least 25% bonds if not 30%.
So, are we better off with the Target Retirement fund or should we reallocate into the above funds? And if reallocation is advised, given the asset allocation guideline of "1% bonds per year of age" how would we go about divvying up those allocations?
Example:
(30%) in VANGUARD INST INDEX VINIX .035 -- Large caps, 80% of US stocks
(20%) in VANG EXT MKT IDX VEXAX .08 -- Mid/small caps, 20% of US stocks
(20%) in VANG TOT INTL STK VTIAX .11 -- Complete international stocks
(30%) in VANG TOT BD MKT VBTLX .05 -- US bonds
If you use the above funds in her 401k you've got the US percentages off. If you have 50% US then going with the 80/20 ratio, that would be 40% large caps and 10% mid/small caps. Not 30/20.
Given that our current retirement portfolio (I use that term loosely) consists of only the 401k and Roth IRA, I take it we need not worry about figuring out a taxable account?
Correct.
So choosing funds for the Roth IRA should boil down to...what?
<snip>
Allocating funds between the 401k and the Roth should be done...but how?
<snip>
Looking at both accounts as one portfolio, and allocating 70% stocks and 30% bonds (is that too passive?) should we divvy up the 401k and Roth in the same way? Or should one focus on stocks (domestic/international) while the other focuses on bonds? This is where I get thoroughly confused!
An AA of 70/30 is fine. It can be done different ways:
  1. She can put a target-date fund in both her 401k and her Roth IRA. Vanguard Target Retirement 2030 Fund (0.08% 401k or 0.14% Roth IRA) has an AA of 70/30.
  2. She can use the four funds in her 401k and the three total market funds in her Roth IRA.
  3. She can put all the bonds in the 401k and only stocks in the Roth IRA, filling in the remainder of the 401k with the rest of the stocks.
    • Generally it's better to put assets with lower expected growth (bonds) in pre-tax accounts and assets with higher expected growth (stocks) in Roth accounts.
I was planning on creating some portfolio examples for above three possibilities but I can't because I don't know how much she has where. Please let me know the percentages of the following:
  • Her 401k at Fidelity -- ??%
    Her Roth IRA at Vanguard -- ??%
Total should equal 100%. Also give a rough idea of assets. Do the two accounts add up to more than $25K, more than $75K, more than $150K?

Are you (he) considering opening a self-employed plan and funding it for 2018? Because if you do that will be part of the portfolio AA.

MoneyKnuckleHead
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by MoneyKnuckleHead » Tue Feb 06, 2018 10:41 pm

An AA of 70/30 is fine. It can be done different ways:
She can put a target-date fund in both her 401k and her Roth IRA. Vanguard Target Retirement 2030 Fund (0.08% 401k or 0.14% Roth IRA) has an AA of 70/30.
She can use the four funds in her 401k and the three total market funds in her Roth IRA.
She can put all the bonds in the 401k and only stocks in the Roth IRA, filling in the remainder of the 401k with the rest of the stocks.
Generally it's better to put assets with lower expected growth (bonds) in pre-tax accounts and assets with higher expected growth (stocks) in Roth accounts.
I was planning on creating some portfolio examples for above three possibilities but I can't because I don't know how much she has where. Please let me know the percentages of the following:
Her 401k at Fidelity -- ??%
Her Roth IRA at Vanguard -- ??%
Total should equal 100%. Also give a rough idea of assets. Do the two accounts add up to more than $25K, more than $75K, more than $150K?

Are you (he) considering opening a self-employed plan and funding it for 2018? Because if you do that will be part of the portfolio AA.
Her 401k at Fidelity -- 83%
Her Roth IRA at Vanguard (actually still at NMLI) -- 13%
Cash (MM) at NMLI -- 4%
Assets total almost $250k

I'm actually considering opening a self-employed plan and back funding it for 2017 (if that's possible). I haven't figured the actual allocation yet as we are still juggling funds for the above investments...though the numbers above are accurate as of now.

TwstdSista
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by TwstdSista » Wed Feb 07, 2018 5:01 am

Re: self-employed plan and 2017 -- I believe you can do this for a SEP IRA, but not for a solo 401k. Consider the SEP for 2017, then a solo 401k for 2018 and going forward. This advice doesn't hold if you have employees though -- that changes things.

(and someone please correct me if I'm wrong re: the 2017 SEP vs. i401k contributions).

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Duckie
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by Duckie » Wed Feb 07, 2018 6:43 pm

MoneyKnuckleHead wrote:I'm actually considering opening a self-employed plan and back funding it for 2017 (if that's possible).
In order to fund a solo 401k for 2017 in 2018, it had to be opened in 2017. So that's out for 2017. You can open and fund a SEP IRA now for 2017. But unless your self-employment income is high you won't be able to contribute as much as to a solo 401k. You could open and fund the SEP IRA for 2017 then open and fund a solo 401k for 2018 and roll the SEP IRA into the solo 401k. You can also contribute to a personal Roth IRA just like your wife.

The following three portfolio examples have an AA of 70% stocks, 30% bonds, with 30% of stocks in international. (Target funds have 40% of stocks in international.) That breaks down to 49% US stocks, 21% international stocks, and 30% bonds. (I removed the 4% in taxable and refigured the percentages. You can use this for debt repayment or to live on while maxing all his/her retirement plans.) Once everything's moved over you could have:

Portfolio #1 (target-date funds in all accounts)

Her 401k at Fidelity -- 86%
86% (N/A) Vanguard Target Retirement 2030 Trust II (0.08%)

Her Roth IRA at Vanguard -- 14%
14% (VTHRX) Vanguard Target Retirement 2030 Fund (0.14%)

or

Portfolio #2 (mirroring in all accounts)

Her 401k at Fidelity -- 86%
34% (VINIX) Vanguard Institutional Index Fund Institutional Shares (0.035%)
8% (VEXAX) Vanguard Extended Market Index Fund Admiral Shares (0.08%)
18% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.11%)
26% (VBTLX) Vanguard Total Bond Market Index Fund Admiral Shares (0.05%)

Her Roth IRA at Vanguard -- 14%
7% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.04%)
3% (VGTSX) Vanguard Total International Stock Index Fund Investor Shares (0.18%)
4% (VBMFX) Vanguard Total Bond Market Index Fund Investor Shares (0.15%)

or

Portfolio #3 (all bonds in pre-tax)

Her 401k at Fidelity -- 86%
28% (VINIX) Vanguard Institutional Index Fund Institutional Shares (0.035%)
7% (VEXAX) Vanguard Extended Market Index Fund Admiral Shares (0.08%)
21% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.11%)
30% (VBTLX) Vanguard Total Bond Market Index Fund Admiral Shares (0.05%)

Her Roth IRA at Vanguard -- 14%
14% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.04%)

I prefer #3. I like bonds in pre-tax. This is the cheapest option and gives you the most control. It's also best if you end up with a taxable account earmarked for retirement. If you want simple, #1 would be easiest. It's the most expensive and will make rebalancing more difficult when taxable is added to the portfolio, but right now it's easiest. #2 is too complicated and messy but many people like to mirror accounts.

His Roth IRA and his small business plan should be added to the portfolio this year.

MoneyKnuckleHead
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by MoneyKnuckleHead » Thu Feb 08, 2018 12:55 am

Thanks for this you guys, the examples really helped Duckie.

How difficult is restructuring or reallocating example 3? Say as you age you want more in bonds for example.

TwstdSista
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by TwstdSista » Thu Feb 08, 2018 4:42 am

There are online tools you can use to help you to rebalance. I personally use a spreadsheet that I created (based of another boglehead poster's spreadsheet) which tells me where all of my percentages stand. See the last post here: viewtopic.php?f=10&t=229857&start=100. I also added, per someone's suggestion, dollar amounts relative to the percentages. You can add a column for the Institutional and Extended Market funds in an 80/20 ish ratio.

It actually is not difficult to rebalance, especially with the dollar amounts and percentages staring you right in the face. It's more getting used to either the online tools or the spreadsheet.

ETA: When Duckie posts, I read very carefully. Great advice as always!

MoneyKnuckleHead
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by MoneyKnuckleHead » Thu Feb 08, 2018 11:07 am

Thanks Sista, I'll look into the thread. Thanks again for all the help you two, this has been a daunting and anxietal task made significantly less so with your help. My wife and I are most appreciative!

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Duckie
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by Duckie » Thu Feb 08, 2018 5:19 pm

MoneyKnuckleHead wrote:How difficult is restructuring or reallocating example 3? Say as you age you want more in bonds for example.
It's not difficult, it just takes a little time. To figure your AA each year you add up all the dollar amounts for each account earmarked for retirement. Then you figure the account percentages. Then you figure the percentages for each fund in each account. Try to use only your tax-sheltered accounts for all rebalancing. Avoid selling in taxable.

Let's say in five years you want to increase your 30% bond AA to 35% bonds. That breaks down to 45% US stocks, 20% international stocks, and 35% bonds. You've added some other accounts but her 401k is still the largest at 70% of the portfolio and still holds all the bonds and international stocks. So of that 70% in the 401k you could have 35% in bonds, 20% in international stocks, 12% in US large caps, and 3% in US mid/small caps (or just 15% US large caps). The other 30% of US stocks would go in the other accounts. (This assumes the other accounts have a decent total US market or 500 Index stock fund. You pick the best/cheapest options in each account.)

MoneyKnuckleHead
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by MoneyKnuckleHead » Thu Feb 08, 2018 6:31 pm

Thanks! That clarifies the process very well. Doesn't really sound that diifficult, though I'm sure when the time comes I'll need guidance :wink:

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Re: Roth IRA Transfer from NMLI to Vanguard

Post by MoneyKnuckleHead » Tue Mar 13, 2018 6:13 pm

Hey there again! Just curious...I've gotten all of the funds transferred to Vanguard for the VTSAX purchase, but with the way the market is dropping would it be wise to wait to drop the hammer on the Roth IRA purchase until it levels out?

I know that once the purchase is made it's all about staying the course, and I have zero issues with that. I'm just curious if buying admiral shares of an index fund is best done when the market value is lower.

Thanks in advance!

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Re: Roth IRA Transfer from NMLI to Vanguard

Post by TwstdSista » Wed Mar 14, 2018 2:51 am

I find it's best to just do it and move on with your life. I'm told that lump sum beat dollar cost averaging 2/3 of the the time -- so now is as good a time as any. It was already invested, so all you are doing is keeping it invested.

(FTR -- I've been contributing to our Roths and every purchase seems to be a new all time high for the markets.)

MoneyKnuckleHead
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by MoneyKnuckleHead » Wed Mar 14, 2018 10:13 am

That's what I figured, I just wanted to make sure.

I have to say, firing our FA and taking over has been a seriously empowering experience. I'm so glad the Boglehead community is here to help educate and guide those of us who are just getting started.

Thanks again!

MoneyKnuckleHead
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by MoneyKnuckleHead » Mon Mar 19, 2018 12:35 pm

Her 401k at Fidelity -- 86%
28% (VINIX) Vanguard Institutional Index Fund Institutional Shares (0.035%)
7% (VEXAX) Vanguard Extended Market Index Fund Admiral Shares (0.08%)
21% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.11%)
30% (VBTLX) Vanguard Total Bond Market Index Fund Admiral Shares (0.05%)

Her Roth IRA at Vanguard -- 14%
14% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.04%)
Alrighty! So we have this set up now, but here is where the confusion comes in...I am adding a Vanguard Roth IRA for myself to our portfolio, and I want to add some sort of account in for the baby (I have yet to decide on what type).

So my question is, for my Roth, do I just mirror the allocation above, or do I buy into one specific Index Fund and then somehow reallocate her numbers? I assume I should minimize transactions in her 401k and Roth to avoid any extra costs associated with trades.

TwstdSista
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by TwstdSista » Mon Mar 19, 2018 12:44 pm

I'd buy some more VTIAX in the Roth and reduce VTIAX in the 401k accordingly.

I would use a target date fund of sorts for the child's 529, and I would not include it in my AA.

MoneyKnuckleHead
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by MoneyKnuckleHead » Mon Mar 19, 2018 1:21 pm

I'd buy some more VTIAX in the Roth and reduce VTIAX in the 401k accordingly.
That is where my confusion comes in :) If I invest in VTIAX in my NEW Roth, where do I put the reduction in her 401k? e.g. I start my Roth IRA today with 3k in VTIAX. Do I then reduce her VTIAX holdings by 3k? And if so, where does that money go?

Haha this is the kind of stuff I was warning you guys about above, the little lessons that seem straight forward but I haven't learned anywhere else yet :P

TwstdSista
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Re: Roth IRA Transfer from NMLI to Vanguard

Post by TwstdSista » Tue Mar 20, 2018 3:45 am

If you look at your entire portfolio as a whole, you can determine which, if any, asset class is out of balance. That is where any extra funds would go.

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