Can't do this alone-need a financial planner-please help!

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Topic Author
novice111
Posts: 13
Joined: Mon Jun 03, 2019 12:45 am

Can't do this alone-need a financial planner-please help!

Post by novice111 » Mon Jun 03, 2019 1:18 am

hi,
i've just started reading bogleheads and taylor larimore's book and i KNOW:

1. i can't manage my finances successfully in the short or long term by myself
investing in index funds seems simple enough but managing the tax implications, different asset classes etc is not something i'll ever be sure and confident of doing in this lifetime.
I'm 35 and financially illiterate- it will take me too long to learn and i'll lose valuable time.

i'm new to this country and i can barely understand all the differences between Roth IRA , IRA, 401k etc
How to set up a college fund for kids?
Can a HSA grow your money?
What's 403b?
What's FSA?
is life insurance a good investment tool?
What else is out there that i don't know that i'll probably learn about too late?
i must be really stupid because all this stuff is really hard to grasp for me- no amount of articles i can read will clearly explain it-i need a person who can answer according to my situation.

2. Last year i put about $100k in an ameriprise brokerage account and $35k this year in a self 401k
luckily no life or disability insurance bought yet

the financial advisor is a CFP and fiduciary, and also used by my cousin who's a lawyer from Yale who specializes in financial fraud and writes for nerdwallet for god's sake

but the management fees and the lack of index funds in my portfolio and the stuff i'm reading on bogleheads is alarming me.

i really need somebody i can trust to tell me exactly what to do with my money, make a financial plan and sort out all the tax-implications.
i CANNOT do it by myself- i would never be sure i'm doing the right thing, and i have a demanding job and am a single mom with two kids.

What do i do ? i feel so lost :(

longleaf
Posts: 284
Joined: Sun Nov 26, 2017 4:13 pm

Re: Can't do this alone-need a financial planner-please help!

Post by longleaf » Mon Jun 03, 2019 3:09 am

First off, be calm! This is not something you grasp overnight. You don't have to jump in immediately. Keep reading the forum and wiki for several months until you are confident in yourself. The Bogleheads Guide to Investing is another excellent tool.

Do you have an emergency fund? 6-12 months of cash in a money market fund can enable you to be prepared for the unexpected.

Decide on an asset allocation. This is % stocks, % bonds. This relates to your risk tolerance. Typically people select their age in bond %, but depending on your risk tolerance, a different percentage may be chosen.

Don't fret your age. People have started a lot later than you.

Insurance and investments should be kept separate.

A college fund for your children can be setup through a 529 plan. The gains within a 529 are not subject to taxes, and usage is limited to education per child.

If you want advice pertaining specifically to your situation, please follow this template
Frugality, indexing, time.

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Wiggums
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Re: Can't do this alone-need a financial planner-please help!

Post by Wiggums » Mon Jun 03, 2019 3:32 am

Welcome to the forum.

The previous response is a great place to start. If you tell your us more, we can help you.

Here is done information on Vanguard PAS

https://investor.vanguard.com/advice/personal-advisor

One of the nice things about pas is that you can leave at anytime and your funds will still be in vanguard’s low cost index funds. They’ll also do tax loss harvesting for you.

Old_Dollar
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Re: Can't do this alone-need a financial planner-please help!

Post by Old_Dollar » Mon Jun 03, 2019 4:52 am

Nothing wrong with seeking out someone need help. Most importantly seek out someone who will help teach you. Someone who will teach you Why certain investment choices and vehicles are better or worse than others. Not just someone who merely tells you What you should do. Understanding the difference between everything in this arena is key in the ability to be calm and make decisions with confidence.
I am here solely to learn about investing.

student
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Joined: Fri Apr 03, 2015 6:58 am

Re: Can't do this alone-need a financial planner-please help!

Post by student » Mon Jun 03, 2019 5:34 am

I agree with others who said take some time to think about it. Give yourself 3 months to learn the basic, then decide what to do. For example, here are some ideas:
1) Transfer to Merrill Edge to get a transfer bonus and enroll in the preferred rewards, and use a 3-fund portfolio.
2) Transfer to Vanguard or Fidelity and use a target date index fund.
3) Use a robo advisor at Vanguard, Fidelity or Schwab

blackholescion
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Joined: Fri Mar 22, 2019 6:41 pm

Re: Can't do this alone-need a financial planner-please help!

Post by blackholescion » Mon Jun 03, 2019 7:09 am

Rick Ferri is a poster on here who is a low cost CFA. He charges a flat fee per hour but it’s generally on you to manage the funds long term. That said, you can always call him up every year and get advice on rebalancing and all that. He can also help find a low cost investment advisor to manage the portfolio after a plan is set.

Good luck.
Last edited by blackholescion on Mon Jun 03, 2019 7:22 am, edited 3 times in total.

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Stinky
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Location: Sweet Home Alabama

Re: Can't do this alone-need a financial planner-please help!

Post by Stinky » Mon Jun 03, 2019 7:16 am

Welcome to the Forum! I'm glad that you found us. There are so many people here who are more than willing to offer you their advice and thoughts. And there is a ton of information on the Wiki that you can read at your convenience.

Lots of good advice given by prior posts. I would add that EVERYONE on this site was a financial neophyte at one time in their lives. They all learned how to manage their money, and they didn't do it all in one day or at one time.

You have a lot going for you. You're relatively young. You realize that you have some learning to do. And you've joined this Forum, which will give you excellent advice.

Take a deep breath. Don't panic. If you follow suggestions posted here, you'll be fine financially.

We look forward to helping you on your journey.
It's a GREAT day to be alive - Travis Tritt

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ruralavalon
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Re: Can't do this alone-need a financial planner-please help!

Post by ruralavalon » Mon Jun 03, 2019 7:19 am

Welcome to the forum :) .

Calm down, and be patient, there is no rush to learn it a all by the weekend.

I was pretty ignorant at age 35, and didn't really start investing until almost age 40. Now age 73 comfortably retired. You can probably do this.

I agree with longleaf, start by posting your information on this forum using the "Asking Portfolio Questions" format for some planning and investing suggestions from us.


novice111 wrote:
Mon Jun 03, 2019 1:18 am
hi,
i've just started reading bogleheads and taylor larimore's book and i KNOW:

1. i can't manage my finances successfully in the short or long term by myself
investing in index funds seems simple enough but managing the tax implications, different asset classes etc is not something i'll ever be sure and confident of doing in this lifetime.
I'm 35 and financially illiterate- it will take me too long to learn and i'll lose valuable time.

i'm new to this country and i can barely understand all the differences between Roth IRA , IRA, 401k etc
How to set up a college fund for kids?
Can a HSA grow your money?
What's 403b?
What's FSA?
is life insurance a good investment tool?
What else is out there that i don't know that i'll probably learn about too late?
i must be really stupid because all this stuff is really hard to grasp for me- no amount of articles i can read will clearly explain it-i need a person who can answer according to my situation.

2. Last year i put about $100k in an ameriprise brokerage account and $35k this year in a self 401k
luckily no life or disability insurance bought yet

the financial advisor is a CFP and fiduciary, and also used by my cousin who's a lawyer from Yale who specializes in financial fraud and writes for nerdwallet for god's sake

but the management fees and the lack of index funds in my portfolio and the stuff i'm reading on bogleheads is alarming me.

i really need somebody i can trust to tell me exactly what to do with my money, make a financial plan and sort out all the tax-implications.
i CANNOT do it by myself- i would never be sure i'm doing the right thing, and i have a demanding job and am a single mom with two kids.

What do i do ? i feel so lost :(
Here is a guide to help in deciding if you want or need an advisor: "The great paradox of using an advisor is that you must know some basics in order to evaluate the advice, and once you do, you also know enough to consider doing your own management." "Chapter 10 – On Your Own or Hire an Advisor".

1) You could post your financial details on this forum for ideas on investments and financial planning. Please see this for format: "Asking Portfolio Questions". I think that you will fund that simply gathering together all of your information together in one place will be helpful to you in understanding your situation and what you need to do.

2) Vanguard offers a ”Personal Advisory Service” (PAS) that will give you advice and manage your investments for an annual fee of 0.3% of your investments. Fidelity and Schwab offer a similar service.

3) Harry Sit, who sometimes posts here, offers a service thru his blog to help people locate an advisor in their locality. "Advice-Only Search and Screening".

4) Here are two more places to look for an an adviser:

National Association of Professional Financial Advisors
; and
Garrett PlNning Network.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

FI4LIFE
Posts: 169
Joined: Sun Apr 28, 2019 9:27 am

Re: Can't do this alone-need a financial planner-please help!

Post by FI4LIFE » Mon Jun 03, 2019 8:03 am

If you break everything down into pieces it is not too complex.

Your retirement account: Sounds like you are self-employed? You can contribute up to $19000 per year to a self-directed 401k (if that is what you opened). If you are not interested in monitoring investments just pick a low-fee target date fund near your estimated year of retirement. You can search on your account website to see what your broker offers.

Your health savings account:. You can contribute up to $7000 per year. Funds that you don't anticipate using this year can be invested. Log onto your HSA website and pick a low-fee total market or S&P index fund.

Your college savings account:. Google your state 529 plan and open an account. To keep things simple, do not contribute more than $15000 per year. Invest in a low-cost target date fund with your child's anticipated college start year.

Your life insurance (I would recommend a term policy). Call an insurance company and don't let them talk you into a whole life policy. Tell them you want a TERM policy.

Worry about tax implications at tax time. An accountant or your tax software will have no problem dealing with these accounts.

pkcrafter
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Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: Can't do this alone-need a financial planner-please help!

Post by pkcrafter » Mon Jun 03, 2019 9:19 am

Welcome, yes it can seem overwhelming at first, but you certainly can learn what to do. No one is more responsible for your money than you. You have to at least know if someone is trying to take advantage of you.
novice111 wrote:
Mon Jun 03, 2019 1:18 am
hi,
i've just started reading bogleheads and taylor larimore's book and i KNOW:

Good, step 1.!

1. i can't manage my finances successfully in the short or long term by myself
investing in index funds seems simple enough but managing the tax implications, different asset classes etc is not something i'll ever be sure and confident of doing in this lifetime.

For the tax issues, you can hire a CPA when needed.


For the investing basics, it's all here. The major asset classes are stocks, bonds, and cash. Within the stock classes are large cap, mid cap and small cap. They can all be accessed with our recommended 3-fund portfolio which contains, total stock market (large mid, small) total international, and bonds.

viewtopic.php?f=10&t=88005


I'm 35 and financially illiterate- it will take me too long to learn and i'll lose valuable time.

No, it won't. But if you really don't wish to manage your own money we can help you find an advisor.

i'm new to this country and i can barely understand all the differences between Roth IRA , IRA, 401k etc
How to set up a college fund for kids?

Again, answers are right here.

Can a HSA grow your money?
What's 403b?
What's FSA?
is life insurance a good investment tool?
What else is out there that i don't know that i'll probably learn about too late?
i must be really stupid because all this stuff is really hard to grasp for me- no amount of articles i can read will clearly explain it-i need a person who can answer according to my situation.

It's hard at first and can be overwhelming for any new investor/poster, just ask. The very fact that you have posted is a first step. Take your time, don't get rattled. Posters here can answer your questions. You can post a specific question and get help. Many posters here are professionals in various areas of finance.


2. Last year i put about $100k in an ameriprise brokerage account and $35k this year in a self 401k
luckily no life or disability insurance bought yet

We probably would not recommend Amerprise, but a self-managed 401k is good. You probably should have life insurance and maybe disability insurance, but you don't want to combine these with investments like whole life policies.

Vanguard's self-employed 401k and other options


https://investor.vanguard.com/small-bus ... -solo-401k

the financial advisor is a CFP and fiduciary, and also used by my cousin who's a lawyer from Yale who specializes in financial fraud and writes for nerdwallet for god's sake

:happy


but the management fees and the lack of index funds in my portfolio and the stuff i'm reading on bogleheads is alarming me.

Good, it should alarm you! One step at a time.

i really need somebody i can trust to tell me exactly what to do with my money, make a financial plan and sort out all the tax-implications.

Posters here can help with the moeny management and investing, and then you can hire a tax-expert as needed.

i CANNOT do it by myself- i would never be sure i'm doing the right thing, and i have a demanding job and am a single mom with two kids.

What do i do ? i feel so lost :(

It's not unusual, lots of new posters feel just like you do, but you have found your way here and have taken a major first step by posting and becoming a member of the community. You can post according to this recommended format, and you can ask one question at a time.


viewtopic.php?f=1&t=6212

viewtopic.php?f=1&t=282473

Paul

When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

Topic Author
novice111
Posts: 13
Joined: Mon Jun 03, 2019 12:45 am

Re: Can't do this alone-need a financial planner-please help!

Post by novice111 » Thu Jun 13, 2019 7:29 pm

Thanks for all the valuable replies. Each was useful. i think i'll take a deep breath, calm down and start educating myself. a few more months isn't going to make a difference i suppose, before i change things over.

Elle06
Posts: 11
Joined: Thu Jun 13, 2019 6:07 pm

Re: Can't do this alone-need a financial planner-please help!

Post by Elle06 » Thu Jun 13, 2019 7:35 pm

It seems very overwhelming altogether but remember that saying about eating an elephant one bite at a time? Take your time, you’ll learn. You are doing something right to have that much invested! And I can honestly say, I started really trying to grasp all this within the last 6 months and I have learned more on this website than in the books I’ve read. You can do it!

CFM300
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Re: Can't do this alone-need a financial planner-please help!

Post by CFM300 » Thu Jun 13, 2019 11:58 pm

novice111 wrote:
Thu Jun 13, 2019 7:29 pm
Thanks for all the valuable replies. Each was useful. i think i'll take a deep breath, calm down and start educating myself. a few more months isn't going to make a difference i suppose, before i change things over.
I recommend that you go to your local library and look for these two books by Eric Tyson:

Personal Finance for Dummies

Investing for Dummies

Look through the Table of Contents. Read one of the sections that interests you. I think that you'll find that he does a very good job of explaining things.

While you're at the library, look at similar books in the same area.

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ruralavalon
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Location: Illinois

Re: Can't do this alone-need a financial planner-please help!

Post by ruralavalon » Fri Jun 14, 2019 8:58 am

novice111 wrote:
Thu Jun 13, 2019 7:29 pm
Thanks for all the valuable replies. Each was useful. i think i'll take a deep breath, calm down and start educating myself. a few more months isn't going to make a difference i suppose, before i change things over.
That's a good idea.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Dottie57
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Re: Can't do this alone-need a financial planner-please help!

Post by Dottie57 » Fri Jun 14, 2019 9:20 am

Welcome,

Investing in a simple 2 or 3 fund portfolio is not rocket science.

Major provider used her are Vanguard , Fidelity, and Schwab. Some like Merrill Edge too. I have a Fidelity office 2 blocks from me, so I go there. Fidelity also has a great web site. Don’t know much about the others. Vanguard funds are freak. I like Fidelity too.

No need to panic. Start reading the forum and Wiki.

suemarkp
Posts: 186
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Re: Can't do this alone-need a financial planner-please help!

Post by suemarkp » Fri Jun 14, 2019 4:33 pm

Financial Advisors don't help with taxes. If you ever subscribe to investing newsletters, they many times steer you to things that have annoying tax consequences (K-1 forms) and forms that come much later than most others (REITs, K-1's).

What is your Ameriprise account costing you? Do you have an "advisor" there? Is he charging a fee based on the amount of money you have there? If not fee, what are the fees (expense ratio, 12B1, loads) of the funds you are in?

You could just keep your money in cash at this time (use a high yielding money market bank account such as Marcus, CapitalOne, or Ally bank). There are worse places to put your money and this wont cost anything but the interest will be taxable. Figure out what you need in your emergency fund. When you are ready to invest, decide where you can put the money and what the limits are (401K, Traditional IRA, Roth IRA, ...). Some of these are offered only through your employer. Others you can do on your own, but you may still need earned income, and some choices can affect the future (such as having money in a traditional IRA messes up doing a back door Roth). A taxable account always works, and some funds do well in there once you held them for a year or more.

It may take you 6 to 12 months to figure things out. That's OK. I put money in some Vanguard funds that turned out to not be so wise from a tax point of view (didn't fully understand until the tax forms were generated on the Vanguard site). So after a year or so, I sold them, condensed things down, and got out of the REIT. Still made money, but it would have been close to what I would have had just leaving it in a high yielding bank money market account. But sometimes it is better to learn from the mistakes as you may ask better questions next time.
Mark | Kent, WA

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StormShadow
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Re: Can't do this alone-need a financial planner-please help!

Post by StormShadow » Fri Jun 14, 2019 4:47 pm

Step 1. Breathe! You are among friends. Count yourself lucky that you found out about bogleheads (and Ameriprise) as early as you did.
Step 2. Educate yourself. Personally, I like the book Bogleheads Guide to Investing. Simple and affordable.
Step 3. Ditch Ameriprise (and/or Edward Jones and/or any other advisor/parasite service). I would transfer in-kind to Vanguard (or Fidelity or Charles Schwab), so you can clear your head and not worry about churning of your account.
Step 4. Keep breathing! Try not to make any sudden moves like buying/selling until you have figured out your risk tolerance and what kind of portfolio (stock/bond%) you want.

Welcome to bogleheads.

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BL
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Re: Can't do this alone-need a financial planner-please help!

Post by BL » Sat Jun 15, 2019 8:43 am

Here is a quick summary of many of the things new investors need to know in a free 16 page pdf written by recommended author, Dr. William Bernstein:
https://www.etf.com/docs/IfYouCan.pdf

Jane Bryant Quinn is an author I have relied on for common sense personal finance over many years. She has written updated books which you can find to borrow from a library, or buy new or used from Amazon.com (see link here which donates a small amount of your purchase price to Bogleheads). She also has a website under her name.

Boglehead's Guide to Investing is one I have used for quite a while. It covers a variety of financial and investment decisions.

The Wiki (see Getting Started) has solid basic information on many aspects of investing. There are also some videos. See Taylor's Gems for quotes from many investing books:
https://www.bogleheads.org/wiki/Taylor_ ... tment_Gems

Using a Target Date fund is a good way to get started in retirement accounts. The far-out dates have only 10% bonds, so if you want more bonds you might have to pick a date much closer to now. It has the 3 funds most often recommended here, plus some international bonds as well.

Taylor L. has a long thread here about the 3-fund portfolio; you can search the Wiki for it; it is really all you need to invest: Total stock market (S&P 500 will do if necessary), Total International Stock Market, and Total Bond market are all you need.

I would move funds to Vanguard from A. (I have a friend at A, but there is no way I would invest with them.) Vanguard won't give you bad advice or sell you expensive products. You can hire an advisor there if desired for 0.3%/year AUM who won't do you harm like most advisors/managers can do in advising costly products for investing or insurance. V funds are almost all very low Expense Ratio %
(ER). They have great low-cost funds. Their balanced funds are also outstanding: Target date, Life Strategy, Balanced Fund, also Wellington and Wellesley active funds are much lower cost than most active funds and have a long history of good value. There are no loads for V funds, and no 12b-1 kickbacks included in their ERs, which is what you pay for with many advisors.

See an independent insurance broker (my small town has 3 of them) that can shop term insurance at various companies for you. See term4sale.com for an idea of the low cost of term insurance. Don't let anyone talk you into permanent or any other fancy insurance. Search threads here for ideas on disability insurance companies. Maybe check in here before you sign up for anything.

Those who sell you life insurance or annuities get a huge commission up front, so they have a conflict of interest in advising you on it. There isn't much commission on term insurance, so they may try to up-sell you to something more profitable.

Topic Author
novice111
Posts: 13
Joined: Mon Jun 03, 2019 12:45 am

Update with portfolio details

Post by novice111 » Sat Jul 20, 2019 8:58 pm

Thanks for everybody's help.
I've been spending all my spare time reading this forum and the recommended books and found out a LOT in one month. i'm so so glad i found this forum when i did. Hopefully my understanding is not way off the mark because i'm not good at this at all.
i don't have many assets to call my own (except my children perhaps)

My 'financial advisor fiduciary' sent me a financial plan on my request which was practically useless.
it basically urged me to buy VUL at $500/month premium and disability insurance from ameriprise, and told me i should put $1000/month for each child into a 529 and he also mentioned something about a non-qualified annuity.
When i questioned the need for a VUL vs term life and asked about the effects of expense ratios and fees on earnings etc, my advisor chickened out and said he would transfer me to another advisor due to 'health' reasons since i had 'too many questions'. i think he might truly believe his advice because he gave me some 'free advice' about my roth and tira on which he wasn't standing to gain anything. Bizarre.

i currently have a toddler and a newborn. i'm working part time (on 1099, my pre-tax income was $90,000 last year) As the kids get older, my income will hopefully increase as i can work full time. i don't have any debt except for my car but little to no savings as you can see.
i have an s corp (i'm the only employee) and opened a self-401k w ascenscus on ameriprise advisor's advice last year-this is also administered by ameriprise and 'wrap fees' are charged on this.

I'm married and recently separated- since the separation 6 months ago i've been paying all expenses for me and my 2 children independently. i filed taxes married filing separately this year. i don't know which way this is going to go, but the only notable thing about our joint finances is, i co-own a house with $160,000 left to pay off- i don't remember the interest rate. my spouse has all the paperwork. house is valued at about $400,000 -it's currently rented out and earning rental income that covers the mortgage with $200 leftover/month.For all practical purposes i don't think i can count on any income from the house although i did help to pay down the mortgage.

Below are the gory details. Hope i'm doing this right.

Emergency funds:
i have 3 months expenses sitting in my no-interest checking account

Debt:
car loan $2400 more to pay off, 0% interest

Tax Filing Status:
married filing separately

Tax Rate:
24% federal
4.24% state

State of Residence:
AZ

Age:
35

Desired Asset allocation: 55%/ 35% bonds
Desired International allocation:10% of stocks

older retirement accounts from previous employers:
recently the ameriprise advisor told me to put the money into these positions as a bit of 'free advice' which i was uninformed enough to take :(

ROTH ira at motif - current value apx $17000 (8.5%)

stocks:

IYH iShares Trust- Shs Dow Jones US Healthcare Sector Index Fund
$5,141.22 (2.5%)

T AT&T Inc.
(2.5%)
$5,126.06

GE General Electric Company
(2.4%)
$4,945.90

QQQ PowerShares QQQ Trust Ser 1
(0.7%)
$1,409.65

cash $20

TRAD IRA at Fidelity- current value apx $3000 (1.5%)

SPAXX Fidelity Government Money Market Fund $77
VYM VANGUARD HIGH DIVIDEND YIELD ETF $88
QQQ PowerShares QQQ Trust $3056 (1.5%)

old 401 k at securian financial- current value apx $24 k (12%)

this costs $25/year to maintain and is in a target date fund that i haven't changed.
It costs $40 to move this 401k elsewhere.

other fees:
• Distribution transaction processing fee $60.00-not sure what this fee even means
• Distribution proceeds overnight/wire service $20.00
• Loan set-up fee $150.00
• Loan re-amortization fee $150.00

the current positions are:
Minnesota Life Guaranteed Return Account er 0.28 crediting rate 2.05- $1187
(0.5%)

us stocks:

Securian AM S&P 500/Citigroup Growth er 0.37- $7457
(3.74%)

DFA US Large Cap Value 0.55 -$6888
(3.46%)

Janus Henderson Triton 0.94 -$2330
(1.17%)

DFA US Targeted Value 0.65-$2039
(1%)

international stock
T. Rowe Price International Stock 0.91- $2313
(1.1%)

Dodge & Cox International Stock 0.57- $2421
(1.21%)

what's available at securian 401k:
Minnesota Life Guaranteed Return Account 0.28

general bond:

Templeton Global Bond 0.78
Hotchkis & Wiley High Yield 0.87
Dodge & Cox Income 0.62

us stock:

Securian AM S&P 500® Index 0.32
Janus Opportunistic Growth 0 68
Securian AM S&P 500/Citigroup Growth 0.37
DFA US Large Cap Value 0.65
Dodge & Cox Stock 0.70
DFA US Social Core Equity 2 Portfolio 0.56
American Century Equity Income 0.85
Vanguard Extended Market Index Admiral 0.35
Janus Henderson Triton 0.94
DFA US Targeted Value 0.65
DFA US Small Cap 0.65

international stock:

Vanguard Total Intl Stock Index Admiral 0.27
T. Rowe Price International Stock 0.91
DFA International Small Company 0.78
Dodge & Cox International Stock 0.66


Strategic / Alternatives:

DFA Commodity Strategy Institutional 0.60
T. Rowe Price Health Sciences 0.90
Vanguard Real Estate Index Admiral 0.40

Balanced:
PineBridge Dynamic Asset Allc Instl 1.45

Ameriprise brokerage sps advantage account- taxable

put $110K into this since last year. it has steadily lost money.
fees that i can see- 1.5% aum wrap fee assessed very month. 12b-1 and front loads apply.

i can't change the investments or see what's available- only advisor can do that.

current holdings: 105,000 (52.7%)
cash: $3,485.14
(1.75%)

individual stocks:

MO ALTRIA GROUP INC $5,053.00 (2.5%)
PG PROCTER & GAMBLE CO $8,625.75 (4.3%)

traded funds:

AIA ISHARES ASIA 50 ETF $9,238.50 (4.6%)
EEM ISHARES MSCI EMERGING MARKETS ETF $8,572.0 (4.3%)
EFG ISHARES MSCI EAFE GROWTH ETF $4,029.00 (2%)
QQQ INVESCO QQQ ETF $32,471.70 (16.3%)
VYM VANGUARD HIGH DIVIDEND YIELD ETF $17,618.00 (8.8%)

mutual funds:

EIFAX EATON VANCE FLOATING RATE ADVNTG CL I $5879 (2.9%)
FBTIX FIDELITY ADVISOR BIOTECHNOLOGY CL I $4,644.31 (2.3%)
LFRFX LORD ABBETT FLOATING RATE CL F $5,835.88 (2.9%)

ameriprise -administered ascenscus self -401 k (25.8%)
fees- $315 /year paid by me to ascenscus to maintain 401 k
i can't change or invest in the account-i called acsenscus and only ameriprise can do it or see what funds are available.
wrap fees taken by ameriprise straight from account totaling 1.5% aum
total deposited $53,000 since last year


cash : $17,282.66 (8.6%)

stocks
AMZN AMAZON.COM INC $9,822.60 (4.9%)
BMY BRISTOL MYERS SQUIBB COMPANY $8,666.00 (4.3%)

funds:

ROBO EXCHANGE TRADED CONCEPTS TRUST ROBO GLOBAL ROBOTICS&AUTOMATION ETF $3,829.00 (1.9%)
XLF SECTOR FINANCIAL SELECT SECTOR SPDR ETF $8,382.00 (4.2%)
XT ISHARES EXPONENTIAL TECHNOLOGIES ETF $3,888.00 (1.9%)


Questions:
1. Obviously i need to get out of Ameriprise. From the forum, it seems like Fidelity might be a smoother choice logistically than Vanguard.
so i guess i'd have to transfer the brokerage account from ameriprise to a brokerage at Fidelity and try to do a transfer- in-kind?
pay any amerprise account closing fees

then what should i do w the funds - sell them this year and put in the 3 index fund portfolio equivalent at fidelity?
i'm expected to have lower than usual income this year due to the newborn

2.401k
what about the ascenscus self-401k?
fidelity doesn't seem to have a self-401k
they're asking if i want to roll it over to a roth- i don't really understand the implications of that
i thought i could only do a backdoor roth since i don't have 'earned income'
is ascencus a good place to keep my 401 k with the $315 annual fee considering i'm just a one person s corp? should i take the self- 401k to vanguard instead? it seems like their fees are $25 for each vanguard fund.

what should i do with the securian 401k?

3.TIRA-->backdoor Roth
should this be done in a year with a lot of income or less income?
should i sell everything in the TIRA when the portfolio's up or down-since it's such a small amount i don't think taxes on gains would be a big deal especially in a year with low income

4.life and disability- term ife- i'll look for quotes on term4life
Questions:
1. Obviously i need to get out of Ameriprise. From the forum, it seems like Fidelity might be a smoother choice logistically than Vanguard.
so i guess i'd have to transfer the brokerage account from ameriprise to a brokerage at Fidelity and try to do a transfer- in-kind?
pay any amerprise account closing fees

then what should i do w the funds - sell this year and put in the 3 index fund portfolio with fidelity index stocks?
i'm expected to have lower than usual income this year due to the newborn

2.401k
what about the ascenscus self 401k.
fidelity doesn't seem to have a self 401k
they're asking if i want to roll it over to a roth- i don't really understand the implications of that
i thought i could only do a backdoor roth since i don't have 'earned income'
is ascencus a good place to keep my 401 k with the $315 annual fee considering i'm just a one person s corp? should i take the self- 401k to vanguard instead? it seems like their fees are $25 for each vanguard fund.

what should i do with the securian 401k

how much can i contribute to self 401k this year- i believe it's 25% of profits of s corp
is it a good idea to max this out every year

3.TIRA-->backdoor Roth
should this be done in a year with a lot of income or less income?
should i sell everything in the TIRA when the portfolio's up or down-since it's such a small amount i don't think taxes on gains would be a big deal especially in a year with low income

how much can i contribute to backdoor roth- still clueless about this and whether to do this conversion this year or another year.
should i be maxing this out every year if possible?

4.life and disability insurance
life insurance- term life- i'll look for quotes on term4sale- 30 yr term 1 million/2 mn policy?
disability insurance- wci has a good article on what to look for in a policy -will need to shop for quotes- not sure i can afford it this year

5. 529 - haven't decided if i need this yet. if i do, not sure if i should start contributing this year/howmuch

6. emergency fund- should i put it in ally bank savings at 2.1% interest- which seems like the least work right now?

Whew. that's a lot of questions, sorry.

Thanks to all for your time.

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BL
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Re: Can't do this alone-need a financial planner-please help!

Post by BL » Sun Jul 21, 2019 8:33 am

I found a Vanguard page that explains 3 different self-employment plans.
I think choosing a single fund like Target date xxxx would minimize costs at least at Vanguard and simplify things.
(I have heard that Fidelity lets you roll other accounts into their plans, but otherwise I would trust V with their advice, and be very cautious anywhere else since every other "advisor" may have a conflict of interest and not be a fiduciary (no matter what they say!))

Putting investments into either a single fund (Target Date, Life Strategy, Balanced Fund, etc.) is not a bad way to start. The 3-fund portfolio is perhaps more tax-efficient if you are saving in a taxable fund as well. Equities are more tax-efficient than bonds, etc.

If you need A to get out of your 401k, then perhaps start there and get that done ASAP. Then dump A. This sounds like the year to get it done. He is charging you exorbitant costs and the sooner you get out, the better. Any of the places mentioned would be a better place. If you know exactly what you want, any place is fine, but if you are not sure, they may try to convince you to buy expensive products!

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BL
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Re: Can't do this alone-need a financial planner-please help!

Post by BL » Sun Jul 21, 2019 8:38 am

You may be able to file Head of Household with 2 kids instead of MFS.

https://www.investopedia.com/financial- ... taxes.aspx

tibbitts
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Re: Can't do this alone-need a financial planner-please help!

Post by tibbitts » Sun Jul 21, 2019 9:26 am

I'm going to disagree with most Bogleheads on these points:

1. Most Bogleheads don't realize how much time and effort they spent getting to (and staying at) the point they're at in knowledge of personal finance.

2. There is some knack involved. It's much like a software program I'm trying to learn - I've watched dozens of u-tube videos, read the manual, etc. and I'm just not understanding certain key components that apparently almost everybody else does. Maybe personal instruction would work for me but no amount of reading and u-tube videos seem to have.

So particularly for someone new to the U.S., and a single parent, I think the OP has enough other things to deal with that turning your investments (and taxes) over to someone for a while (a few years, at least) would be a good idea.

I would suggest posting your adviser's fee schedule and your specific investments so everyone can comment intelligently on whether you're getting a decent value. I would ignore the "Nobody should ever pay an adviser!!!" comments that we sometimes see on here - hostility toward the industry is sometimes a little overdone.

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ruralavalon
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Location: Illinois

Re: Update with portfolio details

Post by ruralavalon » Sun Jul 21, 2019 11:24 am

Background.
novice111 wrote:
Sat Jul 20, 2019 8:58 pm
i currently have a toddler and a newborn. i'm working part time (on 1099, my pre-tax income was $90,000 last year) As the kids get older, my income will hopefully increase as i can work full time. i don't have any debt except for my car but little to no savings as you can see.
i have an s corp (i'm the only employee) and opened a self-401k w ascenscus on ameriprise advisor's advice last year-this is also administered by ameriprise and 'wrap fees' are charged on this.

I'm married and recently separated- since the separation 6 months ago i've been paying all expenses for me and my 2 children independently. i filed taxes married filing separately this year. i don't know which way this is going to go, but the only notable thing about our joint finances is, i co-own a house with $160,000 left to pay off- i don't remember the interest rate. my spouse has all the paperwork. house is valued at about $400,000 -it's currently rented out and earning rental income that covers the mortgage with $200 leftover/month.For all practical purposes i don't think i can count on any income from the house although i did help to pay down the mortgage.

Below are the gory details. Hope i'm doing this right.

Emergency funds:
i have 3 months expenses sitting in my no-interest checking account

Debt:
car loan $2400 more to pay off, 0% interest

Tax Filing Status:
married filing separately

Tax Rate:
24% federal
4.24% state


Asset allocation.
novice111 wrote:
Sat Jul 20, 2019 8:58 pm
Age:
35

Desired Asset allocation: 55%/ 35% bonds
Desired International allocation:10% of stocks
In my opinion 35% in bonds is within the range of what is reasonable at age35. At that age I suggest usually about 20% in bonds or other fixed income investments (like CDs, savings accounts, money market fund). This is expected to substantially reduce portfolio volatility (risk), with only a relatively modest decrease in portfolio return. Graph, "An Efficient Frontier: the power of diversification". Please see:
1) Wiki article Bogleheads® investment philosophy, part 3 "Never bear too much or too little risk"; and
2) Wiki article, "Asset allocation".

I suggest around 20 - 30% of stocks in international stocks. Vanguard paper (March 2012), "Considerations for investing in non-U.S. equities". Historically, allocating 20% of an equity portfolio to non-U.S. stocks would have captured about 84% of the maximum possible diversification benefit, and allocating 30% of an equity portfolio to non-U.S. stocks would have captured about 99% of the maximum possible diversification benefit (p. 6). (You can find lots of debate here on international allocation, opinions ranging all the way from 00% to 50% of stocks in international stocks. If you want more viewpoints on international stocks please try the Google search box, upper right, this page).

That works out to about 20% bonds, 20% international stocks, and 60% domestic stocks. Asset allocation is a very personal decision. You must decide on an allocation that is comfortable for you based on your own ability, willingness and need to take risk.


A possible plan for accounts to use.
In summary I see 5 accounts:
1) ROTH ira at motif - current value apx $17000 (8.5%)
2) TRAD IRA at Fidelity- current value apx $3000 (1.5%)
3) old 401 k at securian financial- current value apx $24 k (12%)
4) Ameriprise brokerage sps advantage account- taxable, current holdings: 105,000 (52.7%)
5) ameriprise -administered ascenscus self -401 k (25.8%).

Have I missed anything?

My suggestion is to move everything to Fidelity and consolidate to 3 accounts:
1) Taxable brokerage account @ Fidelity, $105,000 (52.7%);
2) Self-employed 401k @ Fidelity, $77,300 (38.8%); and
3) Roth IRA @ Fidelity, $17,000 (8.5%).

Call Fidelity or go to a Fidelity customer service office if they have one near you (take your most recent account statements with you):
1) Ask them to help you rollover your Roth IRA @ Motif to a Roth IRA @ Fidelity. Ask for a "trustee to trustee" transfer. Fidelity will help you with that rollover and do most of the work required, you will need to sign some forms.
2) Open a Self-employed 401k @ Fidelity.
3) Ask them to help you rollover (a) your old 401k @ Securian Financial, and (b) your "Ameriprise-administered @ Ascenscus self-employed 401k" -- into your new Self-employed 401k @ Fidelity. Ask for a "trustee to trustee" transfer. Fidelity will help you with those rollovers and do most of the work required, you will need to sign some forms.
4) Ask them to help you transfer your "Ameriprise brokerage sps advantage account- taxable" to a taxable brokerage account @ Fidelity. I suggest an "in-kind" transfer. Fidelity will help you with that transfer and do most of the work required, you will need to sign some forms.


novice111 wrote:
Sat Jul 20, 2019 8:58 pm
Questions:
1. Obviously i need to get out of Ameriprise. From the forum, it seems like Fidelity might be a smoother choice logistically than Vanguard.
so i guess i'd have to transfer the brokerage account from ameriprise to a brokerage at Fidelity and try to do a transfer- in-kind?
pay any amerprise account closing fees

then what should i do w the funds - sell them this year and put in the 3 index fund portfolio equivalent at fidelity?
i'm expected to have lower than usual income this year due to the newborn
I am a huge Vanguard fan and ordinarily suggest Vanguard rather than Fidelity.

In your situation I suggest moving all accounts to Fidelity. Fidelity offers a Self-employed 401k which permits you to rollover your other traditional accounts into their Self-employed 401k. This will give you fewer accounts to keep track of and manage, and opens the way to use a backdoor Roth IRA later.

The funds in the tax-advantaged accounts (IRAs or 401ks) can be changed at any time without any income tax liability.

It is different for your new taxable brokerage account @ Fidelity resulting from the transfer of your "Ameriprise brokerage sps advantage account- taxable". Sale of those investments will result in some income tax liability. It is best to incur that in a low income year.


novice111 wrote:
Sat Jul 20, 2019 8:58 pm
2.401k
what about the ascenscus self-401k?
fidelity doesn't seem to have a self-401k
they're asking if i want to roll it over to a roth- i don't really understand the implications of that
i thought i could only do a backdoor roth since i don't have 'earned income'
is ascencus a good place to keep my 401 k with the $315 annual fee considering i'm just a one person s corp? should i take the self- 401k to vanguard instead? it seems like their fees are $25 for each vanguard fund.
Fidelity does offer a Self-employed 401k plan. Fidelity "Retirement plans for small businesses ".

I suggest opening a Self-employed 401k plan with Fidelity. Boglehead's wiki, "Solo 401k Plan".

Then I suggest rolling over (1) your Ameriprise-administered Ascensus Self-employed 401k plan, (2) your Traditional IRA @ Fidelity, and (3) the old 401k @ Securian Financial -- into the new Self-employed 401k plan @ Fidelity.

At Fidelity I suggest that you use these funds:
1) Fidelity Total Market Index Fund (FSKAX) ER 0.015%
2) Fidelity Total International Index Fund (FTIHX) ER 0.06% ; and
3) Fidelity U.S. Bond Index Fund (FXNAX) ER 0.025%

Wiki article, Fidelity Investments, "Tools for Boglehead-style investing".


what should i do with the securian 401k
I suggest rolling over (1) your Ascensus Self-employed 401k plan, (2) your Traditional IRA @ Fidelity, and (3) the old 401k @ Securian Financial -- into the new Self-employed 401k plan @ Fidelity.

If you want to keep the old 401k @ Securian Financial, then In my opinion the better funds to consider using in the old 401k @ Securian Financial include:
1) Securian AM S&P 500® Index 0.32%
2) Vanguard Total Intl Stock Index Admiral (VTIAX) ER 0.27%
3) Dodge & Cox Income Fund (DODIX) ER 0.62%


novice111 wrote:
Sat Jul 20, 2019 8:58 pm
3.TIRA-->backdoor Roth
should this be done in a year with a lot of income or less income?
should i sell everything in the TIRA when the portfolio's up or down-since it's such a small amount i don't think taxes on gains would be a big deal especially in a year with low income
"A Backdoor Roth IRA is a technique for contributing to a Roth IRA when your income exceeds the contribution limit. There is no income limit on contributing to a nondeductible Traditional IRA, nor on converting a Traditional IRA to a Roth IRA" Wiki article, "Backdoor Roth IRA."

I suggest that you do not convert your current traditional IRA, instead rollover that account into your new Self-employed 401k plan @ Fidelity.


novice111 wrote:
Sat Jul 20, 2019 8:58 pm
how much can i contribute to backdoor roth- still clueless about this and whether to do this conversion this year or another year.
should i be maxing this out every year if possible
You can contribute $6k/year to a backdoor Roth IRA. "A Backdoor Roth IRA is a technique for contributing to a Roth IRA when your income exceeds the contribution limit. There is no income limit on contributing to a nondeductible Traditional IRA, nor on converting a Traditional IRA to a Roth IRA" Wiki article, "Backdoor Roth IRA.".

I suggest that you do not convert your current traditional IRA, instead rollover that account into your new Self-employed 401k plan @ Fidelity.



novice111 wrote:
Sat Jul 20, 2019 8:58 pm
4.life and disability insurance
life insurance- term life- i'll look for quotes on term4sale- 30 yr term 1 million/2 mn policy?
disability insurance- wci has a good article on what to look for in a policy -will need to shop for quotes- not sure i can afford it this year
That is a good idea.

novice111 wrote:
Sat Jul 20, 2019 8:58 pm

5. 529 - haven't decided if i need this yet. if i do, not sure if i should start contributing this year/howmuch
I suggest that you don't start contributing to a 529 until you have your retirement accounts in order and fully funded.


novice111 wrote:
Sat Jul 20, 2019 8:58 pm
6. emergency fund- should i put it in ally bank savings at 2.1% interest- which seems like the least work right now?
That seems reasonable.


Example Portfolio.
Here is an example of how you might invest in the new accounts @ Fidelity. The percentages given are percentages of the total portfolio, not percentages of any particular account.

Taxable brokerage account @ Fidelity, $105,000 (52.7%)
42.7%, Fidelity Total Market Index Fund (FSKAX) ER 0.015%
10%, Fidelity Total International Index Fund (FTIHX) ER 0.06%
(Both of these stock index funds should be very tax-efficient. Wiki article, "Tax-efficient Fund Placement".)

Self-employed 401k @ Fidelity, $77,300 (38.8%)
18.8%, Fidelity Total Market Index Fund (FSKAX) ER 0.015%2)
10%, Fidelity Total International Index Fund (FTIHX) ER 0.06%
20%, Fidelity U.S. Bond Index Fund (FXNAX) ER 0.025%
(It makes portfolio management and rebalancing easier if at least one tax-advantaged account uses all three basic asset types. Bond funds are not very tax-efficient and should be held in a tax-advantaged account, preferably a tax-deferred account like a 401k. Wiki article, "Tax-efficient Fund Placement".)


Roth IRA @ Fidelity, $17,000 (8.5%)
8.5%, Fidelity Total Market Index Fund (FSKAX) ER 0.015%

. . . . .

I hope that this helps.

If you have any questions just ask.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Topic Author
novice111
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Re: Can't do this alone-need a financial planner-please help!

Post by novice111 » Sun Jul 21, 2019 5:11 pm

BL wrote:
Sun Jul 21, 2019 8:38 am
You may be able to file Head of Household with 2 kids instead of MFS.

https://www.investopedia.com/financial- ... taxes.aspx
that's a great suggestion for next year, thank you.

Topic Author
novice111
Posts: 13
Joined: Mon Jun 03, 2019 12:45 am

Re: Can't do this alone-need a financial planner-please help!

Post by novice111 » Sun Jul 21, 2019 6:39 pm

Thanks to everyone for the helpful replies.

ruralavalon- i don't know how to thank you enough for the detailed info!

i have some questions still:

1. what's the advantage of rolling over the TIRA to self- 401k? is it just to get rid of it to facilitate the backdoor Roth?

2. in 2019, if my income is low enough to qualify for roth ira contributions i should just max that out, right?
if it isn't, then i should do a backdoor roth?

3. i should always try to max out my self-401k and backdoor roth, and these are the only two tax advantaged accounts i'm going to need, right? apart from 529 which i'll contribute to after i have retirement funds maxed out. is my understanding correct?

4. if you expect to be in a higher tax bracket at retirement(thinking positive) , does it affect your decision to max out self-401k as much as possible?

5. from WCI site

"Inside a Solo 401K, your “employee contributions” (up to $16,500) can be designated as Roth contributions. This not only allows you some tax diversification benefits, but also allows you to save more money in a tax-protected manner, since after-tax money is worth more than pre-tax money"

this has me thoroughly confused - what's this designation inside a self-401 k? does it make backdoor roth superfluous? should i be doing both backdoor roth and designation of roth contributions inside a self-401k?

i'll get working on the switch to Fidelity right away, maybe i can get some brokerage bonus or something that will reduce the costs of moving and changing the portfolio around, that i'm sure are going to come up.

thank you once again to all.

Topic Author
novice111
Posts: 13
Joined: Mon Jun 03, 2019 12:45 am

Re: Can't do this alone-need a financial planner-please help!

Post by novice111 » Sun Jul 21, 2019 6:46 pm

Btw the ameriprise advisor just emailed me with a recommendation to 'Buy HLIEX in my 401k'

Buy HLIEX . This mutual fund is from the large cap value category from the JP Morgan fund family and has a 5 star rating. Rationale for the recommendation: This did better than Vanguard ETF from the same category year to date and large cap value is expected to do better than large cap growth going forward.

naturally i told him i'd rather hold off for now. i'll switch to fidelity as soon as i can get to their office. :sharebeer

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ruralavalon
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Location: Illinois

Re: Can't do this alone-need a financial planner-please help!

Post by ruralavalon » Sun Jul 21, 2019 6:59 pm

novice111 wrote:
Sun Jul 21, 2019 6:39 pm
Thanks to everyone for the helpful replies.

ruralavalon- i don't know how to thank you enough for the detailed info!

i have some questions still:

1. what's the advantage of rolling over the TIRA to self- 401k? is it just to get rid of it to facilitate the backdoor Roth?
It makes the backdoor Roth IRA possible, and also gives you one less account to keep track of and manage.


2. in 2019, if my income is low enough to qualify for roth ira contributions i should just max that out, right?
if it isn't, then i should do a backdoor roth?
Yes just do a regular Roth IRA contribution of eligible.

Otherwise do a backdoor Roth IRA.


3. i should always try to max out my self-401k and backdoor roth, and these are the only two tax advantaged accounts i'm going to need, right? apart from 529 which i'll contribute to after i have retirement funds maxed out. is my understanding correct?
You should try to make maximum annual contributions to all tax-advantaged accounts every year, if practical.

Is there a High Deductible Health Plan (HDHP) offered at work, so that you are eligible to use a Health Savings Account (HSA)?

4. if you expect to be in a higher tax bracket at retirement(thinking positive) , does it affect your decision to max out self-401k as much as possible?
Why do you think that you will be in a higher tax bracket in retirement?


5. from WCI site

"Inside a Solo 401K, your “employee contributions” (up to $16,500) can be designated as Roth contributions. This not only allows you some tax diversification benefits, but also allows you to save more money in a tax-protected manner, since after-tax money is worth more than pre-tax money"

this has me thoroughly confused - what's this designation inside a self-401 k? does it make backdoor roth superfluous? should i be doing both backdoor roth and designation of roth contributions inside a self-401k?
A Self-employed 401k at Fidelity does not permit Roth contributions.


i'll get working on the switch to Fidelity right away, maybe i can get some brokerage bonus or something that will reduce the costs of moving and changing the portfolio around, that i'm sure are going to come up.
I think you probably can get a new account sign up bonus of some kind from Fidelity.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Topic Author
novice111
Posts: 13
Joined: Mon Jun 03, 2019 12:45 am

Re: Can't do this alone-need a financial planner-please help!

Post by novice111 » Sun Jul 21, 2019 8:17 pm

Thanks for your response.

1. "Why do you think that you will be in a higher tax bracket in retirement?"

because i would have more money invested by then i suppose, and have been working full time for many years.

2. Is it an issue that the fidelity solo 401k doesn't have a roth option?
because it seems like a roth 401k offers tax free growth of upto $19,000 /year
isn't that more valuable?

should i keep my solo-401 k at ascencus if it accepts ROTH 401k designation and accepts rollovers despite the $315/yr fee?

(this question might just be theoretical/for the future, since i'm tempted to just go with fidelity en masse for the convenience)

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ruralavalon
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Location: Illinois

Re: Can't do this alone-need a financial planner-please help!

Post by ruralavalon » Mon Jul 22, 2019 8:34 am

novice111 wrote:
Sun Jul 21, 2019 8:17 pm
Thanks for your response.

1. "Why do you think that you will be in a higher tax bracket in retirement?"

because i would have more money invested by then i suppose, and have been working full time for many years.

2. Is it an issue that the fidelity solo 401k doesn't have a roth option?
because it seems like a roth 401k offers tax free growth of upto $19,000 /year
isn't that more valuable?

should i keep my solo-401 k at ascencus if it accepts ROTH 401k designation and accepts rollovers despite the $315/yr fee?

(this question might just be theoretical/for the future, since i'm tempted to just go with fidelity en masse for the convenience)
My thought was to have all accounts at Fidelity for the convenience, and because a Self-employed 401k at Fidelity permits other traditional accounts to be rolled into that account.

Does the Ascensus Self-employed 401k permit both Roth contributions and also accept rollovers into it from other accounts?

It's often hard to tell at this distance from retirement (age 35) how useful Roth contributions might be. For most people traditional contributions will likely be better.

What is your profession or occupation? Will you be eligible for a significant pension in addition to Social Security? (This information affects the Roth versus traditional decision.)

No matter what you do about the Self-employed 401k you need to get away from Ameriprise management and their fees.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

dbr
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Re: Can't do this alone-need a financial planner-please help!

Post by dbr » Mon Jul 22, 2019 9:45 am

Just reading through this thread I think a genuine professional financial advisor and planner would be very helpful. By that we mean an actual advisor and not a salesman of financial products. Without a doubt Ameriprise is not where that is to be found. I am sorry I do not have an individual I could recommend because I have never met anyone who would serve for this purpose. It is possible someone could be found in the Garrett network, but I have no personal experience. Rick Ferri is an advisor who probably follows a useful model but I have no personal experience to make this a recommendation or not. Some of the concerns here probably need a CPA tax specialist.

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novice111
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Joined: Mon Jun 03, 2019 12:45 am

Re: Can't do this alone-need a financial planner-please help!

Post by novice111 » Mon Jul 22, 2019 2:08 pm

Thanks for the replies.

i'm a physician. i got rid of my debt but i do have young children and can't maximize my earning potential until i'm not sure when.
but i have a feeling i'll be in a higher tax bracket as i age, or at least that i'll be working a fulltime job at the age most people retire(i'll have to,to survive i think)

i have no possibility of pension at all.

hsa- i need to set it up myself because i'm a 1099 independent contractor

Ascenscus tells me their plan accepts rollovers and a ROTH designation for an additional $150/year i.e $415/year

for the time being, i do need to get out of ameriprise and i want to do it before the end of the month.

should i still rollover everything to fidelity as ruralavalon suggested -can i move it later to a roth-enabled 401k somewhere else?
or

should i rollover retirement accounts to ascenscus and move the taxable brokerage account to vanguard?

i agree that i should probably contact somebody like rick ferri- but i don't know how long he's booked out, and i have to get this done as soon as i can.
i actually have some time off for the newborn and that's why i even had time to look into my finances.
thanks for all your help.

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ruralavalon
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Re: Can't do this alone-need a financial planner-please help!

Post by ruralavalon » Mon Jul 22, 2019 5:03 pm

:?:
novice111 wrote:
Mon Jul 22, 2019 2:08 pm
Thanks for the replies.

i'm a physician. i got rid of my debt but i do have young children and can't maximize my earning potential until i'm not sure when.
but i have a feeling i'll be in a higher tax bracket as i age, or at least that i'll be working a fulltime job at the age most people retire(i'll have to,to survive i think)

i have no possibility of pension at all.

hsa- i need to set it up myself because i'm a 1099 independent contractor

Ascenscus tells me their plan accepts rollovers and a ROTH designation for an additional $150/year i.e $415/year

for the time being, i do need to get out of ameriprise and i want to do it before the end of the month.

should i still rollover everything to fidelity as ruralavalon suggested -can i move it later to a roth-enabled 401k somewhere else?
or

should i rollover retirement accounts to ascenscus and move the taxable brokerage account to vanguard?

i agree that i should probably contact somebody like rick ferri- but i don't know how long he's booked out, and i have to get this done as soon as i can.
i actually have some time off for the newborn and that's why i even had time to look into my finances.
thanks for all your help.
Being a physician with the expectation of being in a significantly higher tax bracket for most of your work life is a classic case for needing to use Roth contributions.

Are you generally happy with Ascensus, other than the $415 fee and the use of Ameriprise management?

What funds are available in the Ascensus Self-employed 401k? Please give fund, tickers and expense ratios. You said "i can't change or invest in the account-i called acsenscus and only ameriprise can do it or see what funds are available." That is certainly strange, but Ascensus can surely tell you after you fire Ameriprise.

Another possibility with both Roth contributions and also allowing incoming rollovers is E*Trade. The College Investor (12/11/2017), "Comparing The Most Popular Solo 401k Options".

I don't have any experience with either Ascensus or E*Trade.

Wiki article, E*Trade, "Tools for Boglehead-style investing". It looks to me like E*Trade would be a good choice.

. . . . .

This does not mean you should never make any traditional contributions at all. When you withdraw from your 401k in retirement, the income is not all taxed at the marginal tax rate specified for your tax bracket. TFB blog post, "The case against Roth 401k". " "Until you know you can generate from your Traditional 401(k) enough income to fill the lower brackets, it doesn’t make sense to contribute to a Roth 401(k)."

Wiki article, "Traditional vs Roth".
"Tax considerations:
* If your current marginal tax rate is 15% or less, prefer a Roth.
* If you expect to have higher marginal rates than your current marginal rate for most of your career, prefer a Roth.
* If you will have a traditional account or a pension large enough to meet your expected retirement expenses (and you expect to take that pension shortly after retiring), prefer a Roth.
* Otherwise, prefer a traditional account."
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Topic Author
novice111
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Joined: Mon Jun 03, 2019 12:45 am

Re: Can't do this alone-need a financial planner-please help!

Post by novice111 » Mon Jul 22, 2019 8:25 pm

Thanks ruralavalon.

From what i've been reading etrade seems like the best option-(no fees, roth 401k option, )
with some schwab index funds as investments that i'll need to look into.
this might mean i won't have to worry about switching again for the next few years
they also have a $600 bonus offer running right now

assuming i roll over the TIRA at fidelity, the solo 401k at ascensus, the 401k at securian- over to etrade into a solo 401k (with a roth designation option)

I assume i need to keep the ROTH-IRA at motif- but since motif has no good index funds- i should probably move that somewhere-(where?)
fidelity? then i can do a trustee-to -trustee transfer of the brokerage account from ameriprise to fidelity too. or should i have them at etrade- i feel like this will be unfamiliar without the familiar vanguard and fidelity index funds

The other option seems to be to get a self-managed 401k

viewtopic.php?t=250754

So, i guess my gameplan should be
1. call ascensus- tell them i want ameriprise to stop managing my 401k - hopefully this way the monthly fees from ameriprise that are eating into the 401k stop
2. decide on plan for motif ROTH IRA and the taxable ameriprise brokerage account
(input appreciated)
and complete that ASAP-essentially getting out of ameriprise completely

3. Decide between etrade and custom solo 401k and rollover from ascenscus. i've already paid the ascensus fees for this year anyway.

Does this sound reasonable

Thanks again for all the help

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ruralavalon
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Location: Illinois

Re: Can't do this alone-need a financial planner-please help!

Post by ruralavalon » Tue Jul 23, 2019 8:08 am

novice111 wrote:
Mon Jul 22, 2019 8:25 pm
Thanks ruralavalon.

From what i've been reading etrade seems like the best option-(no fees, roth 401k option, )
with some schwab index funds as investments that i'll need to look into.
this might mean i won't have to worry about switching again for the next few years
they also have a $600 bonus offer running right now

assuming i roll over the TIRA at fidelity, the solo 401k at ascensus, the 401k at securian- over to etrade into a solo 401k (with a roth designation option)

I assume i need to keep the ROTH-IRA at motif- but since motif has no good index funds- i should probably move that somewhere-(where?)
fidelity? then i can do a trustee-to -trustee transfer of the brokerage account from ameriprise to fidelity too. or should i have them at etrade- i feel like this will be unfamiliar without the familiar vanguard and fidelity index funds

The other option seems to be to get a self-managed 401k

viewtopic.php?t=250754

So, i guess my gameplan should be
1. call ascensus- tell them i want ameriprise to stop managing my 401k - hopefully this way the monthly fees from ameriprise that are eating into the 401k stop
2. decide on plan for motif ROTH IRA and the taxable ameriprise brokerage account
(input appreciated)
and complete that ASAP-essentially getting out of ameriprise completely

3. Decide between etrade and custom solo 401k and rollover from ascenscus. i've already paid the ascensus fees for this year anyway.

Does this sound reasonable

Thanks again for all the help
.
I don't know if you need to call Ascensus or Ameriprise or both in order to fire Ameriprise, and probably some paper work is required too.

Then find out from Ascensus what funds they can offer, and the fees they charge. Then decide between Ascensus and E*Trade. As mentioned earlier, I have no personal experience with either Ascensus or E*Trade

If you set up you your Self-employed 401k at E*Trade, then I don't suggest Schwab funds instead I suggest using these funds:
1) Vanguard Total Stock Market Index Fund (VTSAX) ER 0.04%;
2) Vanguard Total International Stock Index (VTIAX) ER 0.11%;
3) Vanguard Total Bond Market Index Fund (VBTLX) ER 0.05%.
Wiki article, E*Trade, "Tools for Boglehead-style investing".

I suggest transferring the taxable brokerage account to either Vanguard or Fidelity. My own personal preference is Vanguard. Vanguard funds will be more tax-efficient. If Fidelity has a local customer service office near you, then Fidelity may be easier for you. I suggest an in kind transfer.

I suggest rolling over the Motif Roth IRA to a Roth IRA at either Vanguard or Fidelity in a trustee to trustee transfer. I suggest using the same fund firm you picked for the taxable brokerage account.

If you choose Fidelity for those two accounts, then I suggest using these funds:
1) Fidelity Total Market Index Fund (FSKAX) ER 0.015%
2) Fidelity Total International Index Fund (FTIHX) ER 0.06%
3) Fidelity U.S. Bond Index Fund (FXNAX) ER 0.025%
Will article, Fidelity, "Tools for Boglehead-style investing".

For the taxable account if at Fidelity consider using Fidelity® Tax-Free Bond (FTABX) ER 0.25%, not FXNAX.

For the taxable account if at Vanguard consider using Vanguard Intermediate-Term Tax-Exempt Fund Admiral Shares (VWIUX) ER 0.09%, not VBTLX.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Topic Author
novice111
Posts: 13
Joined: Mon Jun 03, 2019 12:45 am

Re: Can't do this alone-need a financial planner-please help!

Post by novice111 » Wed Jul 24, 2019 5:25 pm

Thanks again ruralavalon, that's really helpful.

Ascensus has a commission based list of funds available for purchase but also lots of free index vanguard funds it seems like.
They can also use Fidelity for the 401k and continue to be the administrators.
For some reason, i haven't found their customer support very responsive or clear.

i'd like to have the ability to do a mega backdoor roth as well when i move the 401k so i don't have to keep switching in the future.

it looks like i can do a mega backdoor roth at ascensus as well- but i'm not clear if my plan is set up to do it or if it can be recharacterized to do so and what the costs would be to do it. Customer support said it's an extra $150 (+$365/yr) to have Roth designations within the 401k, but they've not been clear about if they can recharacterize for after-tax non-roth employee contributions and in-service distributions which is what would be needed for a mega backdoor Roth.

i'm tempted to go with mysolo401k because they are clear about what they would do and they're happy to use Fidelity as the 401k provider. they also have cheaper fees yearly than ascencus. ($125/yr, $550 one time)
The only thing is i've paid ascencus for this year's plan administration already and i thought i could use them this year and switch 401ks only next year.
but maybe it makes sense to consider that $315 a sunk cost and just switch everything over to mysolo-401k+fidelity for roth 401k w MBR capability and
fidelity as taxable brokerage.

i'd have preferred Vanguard overall too, but looks like Fidelity makes more sense here.

At Fidelity i'd use ruralavalon's excellent suggestions for fund selection and also use Fidelity as my taxable brokerage account. I'd also consider using Fidelity as my bank, as many posters have suggested. viewtopic.php?t=137384

So should i just switch to mysolo401k? i really want to just stuff moved over now- ive been analyzing it too long :?

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ruralavalon
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Location: Illinois

Re: Can't do this alone-need a financial planner-please help!

Post by ruralavalon » Sat Jul 27, 2019 8:00 am

novice111 wrote:
Wed Jul 24, 2019 5:25 pm
Thanks again ruralavalon, that's really helpful.

Ascensus has a commission based list of funds available for purchase but also lots of free index vanguard funds it seems like.
They can also use Fidelity for the 401k and continue to be the administrators.
For some reason, i haven't found their customer support very responsive or clear.

i'd like to have the ability to do a mega backdoor roth as well when i move the 401k so i don't have to keep switching in the future.

it looks like i can do a mega backdoor roth at ascensus as well- but i'm not clear if my plan is set up to do it or if it can be recharacterized to do so and what the costs would be to do it. Customer support said it's an extra $150 (+$365/yr) to have Roth designations within the 401k, but they've not been clear about if they can recharacterize for after-tax non-roth employee contributions and in-service distributions which is what would be needed for a mega backdoor Roth.

i'm tempted to go with mysolo401k because they are clear about what they would do and they're happy to use Fidelity as the 401k provider. they also have cheaper fees yearly than ascencus. ($125/yr, $550 one time)
The only thing is i've paid ascencus for this year's plan administration already and i thought i could use them this year and switch 401ks only next year.
but maybe it makes sense to consider that $315 a sunk cos and just switch everything over to mysolo-401k+fidelity for roth 401k w MBR capability and
fidelity as taxable brokerage.

i'd have preferred Vanguard overall too, but looks like Fidelity makes more sense here.

At Fidelity i'd use ruralavalon's excellent suggestions for fund selection and also use Fidelity as my taxable brokerage account. I'd also consider using Fidelity as my bank, as many posters have suggested. viewtopic.php?t=137384

So should i just switch to mysolo401k? i really want to just stuff moved over now- ive been analyzing it too long :?
I have no personal experience with Ascensus, mysolo401k or E*Trade, so I really can't help in the decision on which to use. Right now you have more experience in dealing with them than I do.

You are right that the $315 paid this year to Ascensus is a sunk cost, don't let that $315 affect your important decision on which Self-employed 401k provider to use.

By now you know what features you want in your Self-employed 401k plan. I noticed that you found Ascensus customer service not very responsive or clear on features that are important to you. Either keep talking to them until you are clear, or until you decide that you don't like their level of customer service and need to go with someone else. It is really your call.

You need to be clear that you will have the plan features you want, and will get a level of customer service that makes you comfortable
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

retiredjg
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Joined: Thu Jan 10, 2008 12:56 pm

Re: Can't do this alone-need a financial planner-please help!

Post by retiredjg » Sat Jul 27, 2019 8:18 am

novice111 wrote:
Wed Jul 24, 2019 5:25 pm
So should i just switch to mysolo401k? i really want to just stuff moved over now- ive been analyzing it too long :?
I have to admit I didn't read each post so I may be woefully out of sync with what you've said.

It appears you want to use the mega-back door with a one-participant 401k. This is a very tricky area. It's more or less a new idea, it takes special paperwork, only a few vendors are offering it, and people are getting into this without knowing what they are doing.

In the next few years, I expect we will be hearing tales of woe from people who have messed this up and somehow created a massive blunder.

You are considering mysolo401k. They will provide you with the paperwork and yearly updates. Are you also planning to use a third party administrator to actually manage the plan?

If not, you need to put this on hold and give it more thought. Do you actually know how to administer a 401k plan? Some of the vendors make it sound pretty easy, but I think that is going to prove to be incorrect.

Topic Author
novice111
Posts: 13
Joined: Mon Jun 03, 2019 12:45 am

Update- Can't do this alone-need a financial planner-please help!

Post by novice111 » Wed Sep 11, 2019 5:38 pm

Update: Finally 3 months after i started,i've extricated myself out of ameriprise. it wasn't pleasant. They kept charging me wrap fees throughout :(

it's amazing how much i've learnt in 3 months time that i never would have thought possible- thanks to this forum.
i feel really empowered :)
Thank you all so much!

So now i have everything at fidelity-( taxable, IRA, Roth, self-401k which is configured as roth 401k to do megabackdoor roth if needed, recordkeeper is mysolo 401k[ they've been very helpful so far]), except my old employer 401k at securian.

I haven't moved my securian 401k yet- the fees are $25/year and then the ER of the funds- which is 0.53% combined presently

it seems due to some of the holdings being proprietary- i'll have to sell them to move over to fidelity.

So, what are the pros and cons of selling vs keeping at securian? i presume the con is, if i sell, my cost per fund of buying similar funds at fidelity now, at current market rates is presumably higher than 4 years ago when the 401k was opened, right?

Also, if i choose to keep at securian and switch to the funds suggested by ruralavalon above- won't i have to sell my holdings anyway?

Thanks again

eukonomos
Posts: 31
Joined: Mon Jan 01, 2018 2:26 pm

Re: Can't do this alone-need a financial planner-please help!

Post by eukonomos » Wed Sep 11, 2019 6:02 pm

novice111 wrote:
Sun Jul 21, 2019 5:11 pm
BL wrote:
Sun Jul 21, 2019 8:38 am
You may be able to file Head of Household with 2 kids instead of MFS.

https://www.investopedia.com/financial- ... taxes.aspx
that's a great suggestion for next year, thank you.
It may also be a great suggestion for this year. You can do an amended return to change your filing status. I did one of these as a Tax Aide volunteer this year - she was very happy at the amount she got back.

HomeStretch
Posts: 1492
Joined: Thu Dec 27, 2018 3:06 pm

Re: Can't do this alone-need a financial planner-please help!

Post by HomeStretch » Wed Sep 11, 2019 6:04 pm

Congratulations on extricating your accounts from Ameriprise!

There are no tax consequences to trading 401k holdings. If your securian 401k has high ERs of 0.53%, do a trustee-to-trustee transfer to rollover your securian 401k to your Fidelity self-employed 401k which has low-fee funds available. You will need to liquidate the securian funds if proprietary and transfer cash to Fidelity for reinvestment.

Consider rolling over your traditional IRA into the Fidelity self-employed 401k too. This will allow you to do back door Roths if you are over the income limits for direct Roth IRA contributions now or in the future.

In addition to lowering your ER costs and getting setup for a back door Roth, you will also have two less accounts which means a simpler portfolio.

InMyDreams
Posts: 608
Joined: Tue Feb 28, 2017 11:35 am

Re: Update with portfolio details

Post by InMyDreams » Wed Sep 11, 2019 6:20 pm

novice111 wrote:
Sat Jul 20, 2019 8:58 pm

i currently have a toddler and a newborn. i'm working part time (on 1099, my pre-tax income was $90,000 last year) ...
I'm married and recently separated- since the separation 6 months ago i've been paying all expenses for me and my 2 children independently. i filed taxes married filing separately this year.
Filing as Head of Household has requirements. Some of them are laid out in the article in a previous link:
"Married taxpayers are not eligible to claim head of household status, as either you must be single or in some stage of a separation. According to the IRS, you are considered unmarried if you are single, legally separated by divorce or have lived apart from your spouse for six months or more in the calendar year."

and

pay more than half of the costs of supporting your household and live with other qualifying family members for whom you provide support for more than half of the year.

A confusing but useful tool from the Colorado TaxAide volunteer for calculating tax relationships:
https://cotaxaide.org/tools/Dependent%2 ... lator.html

Consult your tax preparer for accuracy :)

eukonomos
Posts: 31
Joined: Mon Jan 01, 2018 2:26 pm

Re: Update with portfolio details

Post by eukonomos » Wed Sep 11, 2019 6:44 pm

InMyDreams wrote:
Wed Sep 11, 2019 6:20 pm
Filing as Head of Household has requirements. Some of them are laid out in the article in a previous link:
"Married taxpayers are not eligible to claim head of household status, as either you must be single or in some stage of a separation. According to the IRS, you are considered unmarried if you are single, legally separated by divorce or have lived apart from your spouse for six months or more in the calendar year."
Fair enough. I didn't read the timing closely enough:
novice111 wrote:
Sat Jul 20, 2019 8:58 pm

I'm married and recently separated- since the separation 6 months ago i've been paying all expenses for me and my 2 children independently. i filed taxes married filing separately this year.
It looks like no amendment for 2018, but a possibility for 2019.

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ruralavalon
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Location: Illinois

Re: Update- Can't do this alone-need a financial planner-please help!

Post by ruralavalon » Thu Sep 12, 2019 8:27 am

To continue your education, I suggest that you read one or two good books on investing. Wiki article, "Books: recommendations and reviews".

novice111 wrote:
Wed Sep 11, 2019 5:38 pm
Update: Finally 3 months after i started,i've extricated myself out of ameriprise. it wasn't pleasant. They kept charging me wrap fees throughout :(

it's amazing how much i've learnt in 3 months time that i never would have thought possible- thanks to this forum.
i feel really empowered :)
Thank you all so much!

So now i have everything at fidelity-( taxable, IRA, Roth, self-401k which is configured as roth 401k to do megabackdoor roth if needed, recordkeeper is mysolo 401k[ they've been very helpful so far]), except my old employer 401k at securian.

I haven't moved my securian 401k yet- the fees are $25/year and then the ER of the funds- which is 0.53% combined presently

it seems due to some of the holdings being proprietary- i'll have to sell them to move over to fidelity.

So, what are the pros and cons of selling vs keeping at securian? i presume the con is, if i sell, my cost per fund of buying similar funds at fidelity now, at current market rates is presumably higher than 4 years ago when the 401k was opened, right?

Also, if i choose to keep at securian and switch to the funds suggested by ruralavalon above- won't i have to sell my holdings anyway?

Thanks again
Congratulations on escaping from Ameriprise :) .

HomeStretch wrote:
Wed Sep 11, 2019 6:04 pm
Congratulations on extricating your accounts from Ameriprise!

There are no tax consequences to trading 401k holdings. If your securian 401k has high ERs of 0.53%, do a trustee-to-trustee transfer to rollover your securian 401k to your Fidelity self-employed 401k which has low-fee funds available. You will need to liquidate the securian funds if proprietary and transfer cash to Fidelity for reinvestment.

Consider rolling over your traditional IRA into the Fidelity self-employed 401k too. This will allow you to do back door Roths if you are over the income limits for direct Roth IRA contributions now or in the future.

In addition to lowering your ER costs and getting setup for a back door Roth, you will also have two less accounts which means a simpler portfolio.
I agree.

The proprietary products in the old 401k with Securian will have to be sold before the rollover of the account to the new self-employed 401k at Fidelity.

Any price difference is unimportant. Your sale of an old fund in the Securian 401k and your purchase of a substitute fund in the Fidelity 401k will be nearly simultaneous.

What is important is reducing the annual expense ratios you are paying. The secondary benefit is reducing the number of accounts you need to keep track of and manage.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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