Transferring Merrill Roth IRA to Vanguard Roth IRA?

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Topic Author
rsolby
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Joined: Tue Jan 12, 2021 12:24 pm

Transferring Merrill Roth IRA to Vanguard Roth IRA?

Post by rsolby »

Context
Thank you so much for the support! Very excited this forum exists to support new investors like myself. For context, I'm a graduate MBA student who converted a majority of my old employer's 401(k) into a Roth IRA in 2020. My logic was that as a student earning very little income in 2020, this would be a great opportunity to make this conversion, pay the applicable taxes now, and be able to invest this without the same tax implications as a traditional 401(k). I'm currently 27 and am seeking to invest in a Vanguard fund/ETF. My Roth IRA account is currently held in a Merrill account, and I'm finding it difficult to find different Vanguard funds on Merrill's site. Not sure if it's a difficult user interface or if I'm missing something.

My Question
Is it prudent to transfer my Merrill Roth IRA to a Vanguard Roth IRA if I'm certain I want to invest in say the Vanguard Target Retirement 2060 fund? I know the transfer can take some time, but I'm not sure if this is my only option given I don't see this fund as an investment option through Merrill. Any additional support is greatly appreciated!

Thank you!

Robert S.
investor997
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Re: Transferring Merrill Roth IRA to Vanguard Roth IRA?

Post by investor997 »

I say keep it at Merrill. That way the balance will contribute to BofA/Merrill Premium Rewards status. You can buy Vanguard ETFs. I wouldn't over think it; just buy 70% VTI, 20% VXUS and 10% BND, then instruct Merrill to reinvest dividends automatically.
Shorty
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Re: Transferring Merrill Roth IRA to Vanguard Roth IRA?

Post by Shorty »

+1
investor997 wrote: Tue Jan 12, 2021 3:59 pm I say keep it at Merrill. That way the balance will contribute to BofA/Merrill Premium Rewards status. You can buy Vanguard ETFs. I wouldn't over think it; just buy 70% VTI, 20% VXUS and 10% BND, then instruct Merrill to reinvest dividends automatically.
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retired@50
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Re: Transferring Merrill Roth IRA to Vanguard Roth IRA?

Post by retired@50 »

Welcome to the forum. :happy

Since you used the word "certain" about the Vanguard 2060 target retirement fund, then I'd say make the switch to Vanguard. If you want free and easy access to the complete suite of Vanguard products, having an account at Vanguard is the way to go.

You can contact Vanguard to have them assist in moving the account. It's generally best to work with the firm that is receiving the funds when moving assets between firms.


Regards,
This is one person's opinion. Nothing more.
sycamore
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Re: Transferring Merrill Roth IRA to Vanguard Roth IRA?

Post by sycamore »

rsolby wrote: Tue Jan 12, 2021 12:43 pm
Welcome to the forum, rsolby!

Are you talking about Merrill Edge specifically, or some other Merrill Lynch account?

At merrilledge.com, when I search for "Vanguard Target Retirement 2060 Fund" it says No Results Found. If I search for the fund's ticker VTTSX, at least it gives a price quote. Meh, so Merrill Edge doesn't have the best user interface.

If I actually login to merrilledge.com, I get a little further with search results. Browse to https://olui2.fs.ml.com/RIMutualFundsUI ... mbol=VTTSX, click on the Expenses tab, and you can see you will be charged a transaction fee. I pretended to buy it in my Roth IRA and found they would charge a $19.95 transaction fee.

So if you're intent on buying Vanguard mutual funds at Merrill Edge, you'll be charged $19.95. Maybe not much if you do it just once per year, that's the cost of convenience. Or as the previous posters suggested, use ETFs to get the same stock/bond exposure.
Hyperchicken
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Re: Transferring Merrill Roth IRA to Vanguard Roth IRA?

Post by Hyperchicken »

Not something you asked directly, but there is no reason for you to limit yourself by investing in target date funds. Not that they are bad, but you can do better with a simple portfolio.
placeholder
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Re: Transferring Merrill Roth IRA to Vanguard Roth IRA?

Post by placeholder »

On your account web page in the upper right corner there should be a box that says Search Quote or Trade so put in VTTSX to get info and trade options (it appears to have a transaction fee).
placeholder
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Re: Transferring Merrill Roth IRA to Vanguard Roth IRA?

Post by placeholder »

Unless the roth is all of your investments then you should probably use it to hold the most appropriate portion of your portfolio rather than a target fund.
investor997
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Re: Transferring Merrill Roth IRA to Vanguard Roth IRA?

Post by investor997 »

placeholder wrote: Tue Jan 12, 2021 4:43 pm On your account web page in the upper right corner there should be a box that says Search Quote or Trade so put in VTTSX to get info and trade options (it appears to have a transaction fee).
There's no point in trying to buy a Vanguard mutual fund at Merrill (or any brokerage that isn't Vanguard for that matter). Just buy their ETF equivalents, or in the case of target date funds, the component ETFs which make them up. A 2060 target date fund is basically 90/10 and will stay that way for a long time. That's why I suggested not to overthink it. Just buy VTI, VXUS and BND in the correct ratios and call it a day.
placeholder
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Re: Transferring Merrill Roth IRA to Vanguard Roth IRA?

Post by placeholder »

investor997 wrote: Tue Jan 12, 2021 4:49 pm There's no point in trying to buy a Vanguard mutual fund at Merrill (or any brokerage that isn't Vanguard for that matter).
I agree but the op was having trouble navigating the website.
Topic Author
rsolby
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Joined: Tue Jan 12, 2021 12:24 pm

Re: Transferring Merrill Roth IRA to Vanguard Roth IRA?

Post by rsolby »

investor997 wrote: Tue Jan 12, 2021 3:59 pm I say keep it at Merrill. That way the balance will contribute to BofA/Merrill Premium Rewards status. You can buy Vanguard ETFs. I wouldn't over think it; just buy 70% VTI, 20% VXUS and 10% BND, then instruct Merrill to reinvest dividends automatically.
Thank you for the help! I appreciate the guidance on this.
Topic Author
rsolby
Posts: 5
Joined: Tue Jan 12, 2021 12:24 pm

Re: Transferring Merrill Roth IRA to Vanguard Roth IRA?

Post by rsolby »

sycamore wrote: Tue Jan 12, 2021 4:34 pm
rsolby wrote: Tue Jan 12, 2021 12:43 pm
Welcome to the forum, rsolby!

Are you talking about Merrill Edge specifically, or some other Merrill Lynch account?

At merrilledge.com, when I search for "Vanguard Target Retirement 2060 Fund" it says No Results Found. If I search for the fund's ticker VTTSX, at least it gives a price quote. Meh, so Merrill Edge doesn't have the best user interface.

If I actually login to merrilledge.com, I get a little further with search results. Browse to https://olui2.fs.ml.com/RIMutualFundsUI ... mbol=VTTSX, click on the Expenses tab, and you can see you will be charged a transaction fee. I pretended to buy it in my Roth IRA and found they would charge a $19.95 transaction fee.

So if you're intent on buying Vanguard mutual funds at Merrill Edge, you'll be charged $19.95. Maybe not much if you do it just once per year, that's the cost of convenience. Or as the previous posters suggested, use ETFs to get the same stock/bond exposure.
Thanks for the reply, I really appreciate it. A once per year $19.95 charge isn't too much, but you're right, I may explore buying specific percentages of the other ETFs to get the same ratio of exposure in my portfolio and avoid that charge.
Topic Author
rsolby
Posts: 5
Joined: Tue Jan 12, 2021 12:24 pm

Re: Transferring Merrill Roth IRA to Vanguard Roth IRA?

Post by rsolby »

Really appreciate this forum's support. Very grateful to tap into such a knowledgeable network of people with great advice!

I think what makes the most sense is to invest in specific percentages of different ETFs (e.g., VTI, VXUS, etc.) and structure my portfolio that way as opposed to selecting a target fund.

Thanks again, and if people have other thoughts on this feel free to share!

Best,

Robert S.
Topic Author
rsolby
Posts: 5
Joined: Tue Jan 12, 2021 12:24 pm

Re: Transferring Merrill Roth IRA to Vanguard Roth IRA?

Post by rsolby »

Hyperchicken wrote: Tue Jan 12, 2021 4:37 pm Not something you asked directly, but there is no reason for you to limit yourself by investing in target date funds. Not that they are bad, but you can do better with a simple portfolio.
After doing some additional research and reading, I think you're right! Thanks for responding!
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