Help with portfolio

[NewToFiLateStarter]

Emergency funds: We do have emergency funds in a HYSA account, but it likely is more than we need. $76 k.

Debt:

My husband has a student loan around 45k at 2.7%, but he will potentially have the remainder forgiven with PSLF. We had 300k student debt, which we paid off using the Dave Ramsey method over a period of 20 years. Now I regret not putting some of that into retirement.

Mortgage: 359,221 30 year fixed, 2.75 %. I pay an extra 150 to the principal every month

We do not have any car payments as our cars are 20 plus years old. We pay off cc debt every month, but I need to get the spending under control. We do not budget, which I realize is a major issue.

Tax Filing Status: We mfs last year because my husband's loan needed to be on an IBR plan for PSLF. But now that the SAVE plan has been frozen, we are in limbo.

Tax Rate: My rate is 24%, his is 12 %

State of Residence: Washington state

Age: 47/48

Desired Asset allocation: I was thinking 60 stocks/40 bonds

Desired International allocation: Unsure

Please provide an approximate size of your total portfolio: 300,000


Current retirement assets


My husband has a pension with the school district. I do not know any details, and he doesn't understand either. His income is low, so I don't expect this will pay well. He is a school bus driver, and is paid hourly, which is why his income fluctuates. I will have him reach out to HR to find out more information, and to see if other retirement options are available to him.


His IRA at Fidelity run by Raymond James:
This is being managed by a broker, I do not know expense ratio but I am sure it is high. 82k approximately
Edited to add:
CCIZX 0.95%
FGSIX 0.85%
FINSX 0.40%
FCIGX 0.97%
FBND 0.36%
FXO 0.62%
FEX 0.60%
GSINX 0.60%
GIUSX 0.47%
RSP 0.20%
MTUM 0.15%
GLIFX 0.97%
FRFZX 0.75%
HYSZX 0.75%
PDBZX 0.49%
WCPBX 0.45%

Management fee: 1.15%

Her SIMPLE IRA at Edward Jones: (I have reached out to find out what type of simple IRA this is, and what the fees are)

invested in AAGTX: 30,869 approximately. This plan has been in place 1 year.
edited to add: AAGTX American Funds 2040 Target Date Retire A: Expense ratio 0.710%. Share class: Front load
1% employer match

Edited to add:

I asked, and found out that my employer is paying the management fee. The account is a 5304 plan, they said.

Her Traditional IRA at Fidelity (Broker at Raymond James):

This is being managed by a broker. 118,604 approximately
Again, I do not know expense ratio, but it is invested in many different things.

Edit to add information for her IRA:
FADIX 1.43 %
FAEGX 1.21 %
FEIRX 1.1 %
FTMKX 1.46 %
FAGOX 0.96 %
FLSTX 1.27 %
FCTGX 1.47%
FSIAX 0.95 %
These all says they have a front load.

Management fee: 1.15%

We have a shared investment account at Raymond James/Fidelity with both my name and my husband's on it. approximately 64k

Edited to add:
ABBVIE INCORPORATED ABBV
AMGEN INCORPORATED AMGN
BLUE OWL CAPITAL CORPORATION OBDC
CALAMOS STRATEGIC TOTAL RETURN COM SH BEN INT CSQ
COHEN & STEERS TOTAL RETURN RL RFI
COTERRA ENERGY INCORPORATED CTRA
EATON VANCE TAX ADVT DIV INCM EVT
FLEX LNG LIMITED SHS (BERMUDA) FLNG
HONDA MOTOR LIMITED ADR ECH CNV IN 3 (JAPAN) HMC
INVESCO MUN OPPORTUNITY TR VMO
ISHARES TR NATIONAL MUN ETF MUB 0.05%
ISHARES TR US HOME CONS ETF ITB 0.39%
KEYCORP KEY
KINDER MORGAN INCORPORATED DEL KMI
NUVEEN ALL AMERICAN MUNICIPAL BOND FUND CL I N/L FAARX 0.56%
NUVEEN HIGH YIELD MUNICIPAL BOND FUND CL I N/L NHMRX 0.59%
NUVEEN STRATEGIC MUNICIPAL OPPORTUNITIES FUND CL I N/L NSIOX 0.61%
NYLI MACKAY DEFINEDTERM MUNI MMD
WELLS FARGO COMPANY NEW WFC

Many of the above seem to be stocks. I was surprised to see so many stocks in this joint investment account. I didn't see expense ratios for stocks. Management fee: 1.15%

ibond 11,148 at current 2.96%. I purchased this in August 2022 when rates were 9.62%

I also have a few paper EE bonds that I need to turn in, probably less than 500 dollars worth, however.

My children have 529s with the same broker, but sadly, it is not much.
Edited to add: I emailed the broker asking what the management fee was, and his assistant wrote back this response:

"As far as the fees on the 529 accounts, they are roughly a nickel out of every dollar, or a little above 5%. Most of that 5% goes to the mutual fund company with a sliver going to the advisor on the account. If you would like to have a more extensive conversation of these 529 accounts, we can set up a time for you and your broker to discuss. Just a heads up, he is leaving the country for a few weeks coming up here shortly."

I love how they downplay the cost, to "only a nickel". Oh and he's on a nice vacation too. So eye opening now..

I saw the fee for a 529 at Vanguard is significantly lower, unless there are additional fees once I pick the particular plan, that I am not aware of?

Contributions

New annual Contributions:

We both are contributing 10 percent. We both have variable incomes.

I am sorry, I don't have percentages for the above, or more information regarding the costs but I assume with a broker, as I am learning, he is likely taking over 1 percent?

Questions:

I am completely new to investing. I have recently read the Boglehead's guide to investing, JL Collins' blog, and Quit like a Millionaire. I am terrified we will never be able to retire. Any advice is appreciated.

1. I was considering moving my accounts from the actively managed fund at Raymond James/Fidelity, to Vanguard. I was considering 60 percent VTSAX, and 20 percent VBTLX. Thoughts? I am unsure how to do this however, if my husband and I both have our names on the investment account.

2. I am new to this, forgive my ignorance. With the traditional IRAs, do they just get merged to Vanguard IRAs, and then do I have to pick the percentages for the IRA portfolios as well?

3. If my broker is handling the 529s, I assume he is also taking a percentage that I am not aware of? He also holds my term life insurance.

4. Most of the books I have read talk about 401ks, which neither of us have. I was told because of our income, that I will not be able to contribute to another IRA on top of my simple IRA, including Roth IRAs, which I have never had. I am unsure what to do, since I do not have many tax deferred options in my portfolio. If I put both stocks and bonds in the taxable account, does this mean that I pay taxes every time I readjust the ratios?. If I open up an account with VTSAX in my taxable account, is this still ok? Or is this a bad idea?

5. Recommendations for the ibond, now that it has decreased in percentage. Do I leave it for the 5 years, or withdraw and reinvest it?

6. New question: How would I roll over all of the investments, and switch to index funds, and bonds, especially now that I know that they include stocks?


9/29/24: I think we are ready to make our move in kind. I plan to call Vanguard tomorrow. What I am a bit unsure on, is how I will proceed with the distribution. If we make too much to contribute to our existing traditional IRAs, then whatever funds we place in there will have to just sit, and I won't be able to add to them. So does this mean that in our taxable account I would want to place VTSAX, VBTLX and VTIAX so that I am able to contribute to all of those accounts? I am thinking potentially 50 percent VTSAX, 40 percent VBTLX, and 10 percent VTIAX. Thoughts? Is that percentage in each of the "buckets" or only throughout the whole account?

Thanks again for helping us learn. I am ready to take this plunge.

[retired@50]

Welcome to the forum.

Mortgage: 359,221 30 year fixed, 2.75 %. I pay an extra 150 to the principal every month

If I were in your shoes, I'd stop paying $150 extra on the mortgage. I'd use this "wiggle room" to increase the contributions to your retirement account(s).

My husband has a pension with the school district. I do not know any details, and he doesn't understand either. His income is low, so I don't expect this will pay well.

I would suggest that your husband do some reading at the school district's website or employee portal or wherever the plan details are published. If that doesn't work, I'd suggest that he start asking questions of co-workers or speak to someone in human resources or payroll. This is too important to just shrug your shoulders.

His IRA at Fidelity
This is being managed by a broker, I do not know expense ratio but I am sure it is high. 82k approximately

Same idea here. Don't just say "I do not know", you're going to have to do some reading and scrutinize the quarterly or annual statements from every account you or your husband hold. All the details are likely contained in the fine print. If you still can't find them, ask the "broker". Same idea holds for the fees or commissions you're paying to the broker. As we all know, nobody works for free in the financial industry.

Her SIMPLE IRA at Edward Jones:
invested in AAGTX: 30,869 approximately. This plan has been in place 1 year.
1% employer match

Her Traditional IRA at Fidelity (Broker at Raymond James):
This is being managed by a broker. 118,604 approximately
Again, I do not know expense ratio, but it is invested in many different things.

We have a shared investment account at Raymond James/Fidelity with both my name and my husband's on it. approximately 64k

Please include fund names, ticker symbols, and expense ratios for all investments held in all the retirement and investment accounts. Ticker symbols alone just force forum contributors to look up each one. That's work that many forum members won't perform.

Questions:
I am completely new to investing. I have recently read the Boglehead's guide to investing, JL Collins' blog, and Quit like a Millionaire. I am terrified we will never be able to retire. Any advice is appreciated.

1. I was considering moving my accounts from the actively managed fund at Raymond James/Fidelity, to Vanguard. I was considering 60 percent VTSAX, and 20 percent VBTLX. Thoughts? I am unsure how to do this however, if my husband and I both have our names on the investment account.

2. I am new to this, forgive my ignorance. With the traditional IRAs, do they just get merged to Vanguard IRAs, and then do I have to pick the percentages for the IRA portfolios as well?

3. If my broker is handling the 529s, I assume he is also taking a percentage that I am not aware of? He also holds my term life insurance.

4. Most of the books I have read talk about 401ks, which neither of us have. I was told because of our income, that I will not be able to contribute to another IRA on top of my simple IRA, including Roth IRAs, which I have never had. I am unsure what to do, since I do not have many tax deferred options in my portfolio. If I put both stocks and bonds in the taxable account, does this mean that I pay taxes every time I readjust the ratios?. If I open up an account with VTSAX in my taxable account, is this still ok? Or is this a bad idea?

5. Recommendations for the ibond, now that it has decreased in percentage. Do I leave it for the 5 years, or withdraw and reinvest it?

Thank you so much for your time.

No need to be terrified. You'll get there but it will involve some work, some reading, and some learning.

1. Moving accounts to Vanguard sounds like a good idea to me. IRAs are individual accounts, so those cannot be held jointly. Other accounts can be held jointly.

2. It's possible to merge assets, assuming they have comparable tax treatment. Yes, you'll have to choose an asset allocation.

3. Read the statements for the 529. Find out what fees, if any, you're paying. If the statements don't explain it well enough, ask questions of the broker.

4. Without knowing all the current investments, and where the money resides now, it's difficult to make a recommendation at this point. It appears you have several IRAs which could be used for bond investments. This might allow you to use stock index funds in your taxable account.

5. No opinion.

Edit: Typo.
Regards,

[Nyc1967]

I would keep track of ALL spending for the next couple of months, then write out a budget and STICK to it

[bonesly]

Emergency funds: We do have emergency funds in a HYSA account, but it likely is more than we need. $76 k.

Generally an Emergency Fund (EF) is to cover monthly expenses (not gross income) if one or both of you lost your jobs. The sizing of the EF is matched to how many months it would take to find a replacement job at similar salary with your knowledge, experience, and age as considerations for the job-search time frame (higher salaries and/or age generally take longer to find a replacement job). 6-18 months of expenses is a generic recommendation, but that should really be tailored to how long you think it would take you to find replacement jobs (do a Google search on "job search time for $XK salary with Y years of experience" or something like that if you don't have a good feel already for the time frame).

Mortgage: 359,221 30 year fixed, 2.75 %. I pay an extra 150 to the principal every month

I concur with Retired@50's suggestion to re-direct this $150/month towards increasing contributions towards your retirement accounts (assuming you do not both already max out your 401k & Roth IRAs).

We do not have any car payments as our cars are 20 plus years old. We pay off cc debt every month, but I need to get the spending under control. We do not budget, which I realize is a major issue.

Unless one of you is a car mechanic or have a friend that does your repairs at cost, the age of your cars is likely a liability. How will it impact you if one flat out dies and you're down to one vehicle? Plus advances in car safety are very are pretty significant. However, you may not have the "spare" budget line item for new cars and don't want to take on a car loan. Not sure what to suggest, but aging cars that are already 20 years old seem like a looming issue that you should develop a plan to address.

While I think Dave Ramsey's advice on investing is not good, his advice on getting out of debt and budgeting seems Ok. You might start with a simple 5-minute read of the Wiki topic on Household Budgeting. If you like the simple spreadsheet approach, there are templates for Excel and GoogleSheets. If you don't mind a phone app then You Need a Budget (YNAB) is supposedly pretty good.

Desired Asset allocation: I was thinking 60 stocks/40 bonds
Desired International allocation: Unsure

Since you're thinking on 60/40 and unsure of an international allocation, consider one or both of the options below to help clarify your Asset Allocation (AA) among stocks & bonds. Ideas on Int'l are typically 40% of stocks, 20% of stocks, or 0% (see discussion below the first chart).

Control Your Risk
1) Read the Wiki article for Assessing Risk Tolerance, take the Vanguard Investor Questionnaire, then tailor the asset allocation (AA) that was recommended by the quiz based on your knowledge of your personal risk tolerance having read the Wiki article.

2) Alternatively (or in addition to), ask "How much of a drop in portfolio value as a % of total value can I handle?" cut that % in half to get standard deviation, then lookup that std. dev. on the X-Axis of the chart below, and finally scan up to see what AA that corresponds to. As an example, if you can only stomach a -24% drop in portfolio value, that's a ±12% std. dev, which corresponds to an AA of 60/40. The return you get is an average and you'll get what you get with your unique sequence of returns (there's a lot of variance in outcomes due to the associated volatility of stocks so it probably will NOT be the average, but something more or less).


Value of Int'l Diversity from US

There's essentially two camps among Bogleheads: a) Those that are on board with the global market cap weighting, which is about 60% US stock and 40% ex-US stock; and b) those that have a home bias (US will usually outperform), which is about 80% US stock and 20% ex-US stock (some even omit Int'l altogether). I'm in camp a) based on the chart below from WisdomTree, the white paper from Vanguard, and the more recent article from Vanguard.


Vanguard White Paper: International Equity - Considerations and Recommendations
Vanguard Web Article: Making the case for international equity allocations

Her SIMPLE IRA at Edward Jones
...
1. I was considering moving my accounts from the actively managed fund at Raymond James/Fidelity, to Vanguard. I was considering 60 percent VTSAX, and 20 percent VBTLX. Thoughts? I am unsure how to do this however, if my husband and I both have our names on the investment account.

Moving away from Edward Jones & Raymond James are likely good ideas as those are costly advisor shops and Costs Matter. Vanguard was founded as a Do-It-Yourself (DIY) kind of shop and while it was the leader on low-cost index funds, others have followed that lead (Fidelity and Schwab are often cited here). I agree with Retired@50 that moving to Vanguard would be good, but you could also consolidate at Fidelity and just transition from advisor-managed to self-directed accounts. Fidelity might even be able to set up a Solo 401k to replace your SIMPLE IRA (at lower cost that EJ is likely charging you). Vanguard got out of the Solo 401k business (not sure about SIMPLE and SEP, but they seem to want to deal with institutional retirement accounts, rather than individual employer plans).

I have most of my assets at Vanguard and would recommend them for a DIY investor that does not need a lot of hand holding and can figure things out without calling customer service very often (Vanguard has no local offices to visit a rep in-person if that matters to you).

Reasons to consider staying with Fidelity (and transitioning to self-directed accounts): better customer service & local offices; you already have some assets at Fidelity (established relationship).

2. I am new to this, forgive my ignorance. With the traditional IRAs, do they just get merged to Vanguard IRAs, and then do I have to pick the percentages for the IRA portfolios as well?

I concur with Retired@50's response; Trad IRAs can be transferred "in-kind" and then sold to cash at Vanguard and then re-invested in low-cost Vanguard index funds (you would choose which funds and how to split the IRA balance among those funds). If the assets cannot be transferred "in-kind" (e.g., proprietary holdings at EJ or RJ of Fido Advisor accounts), then those would have to be liquidated where they are and then the cash within the Trad IRA can be moved to Vanguard. If you can execute a secure-upload of your statements with Fido, EJ, and RJ to a representative at Vanguard, they can tell you what can and can't be moved "in-kind" and can start the transfer process for you (they will pull the assets that they can take, and tell you which ones you'll have to direct your advisor to liquidate). Be sure not to take a withdrawal, you just want to sell proprietary holdings to cash inside the IRA so you don't get a tax bill.

3. If my broker is handling the 529s, I assume he is also taking a percentage that I am not aware of? He also holds my term life insurance.

I don't have anything to add to Retired@50's response on the 529s. Read the last 12 statements and look for where the fee is being deducted to assess how much it is relative to total 529 portfolio size.

If you end your relationship with your advisor, you can likely keep your term life insurance. Check with the insurance company directly (they likely don't care as long as you continue to pay the premiums). Call the customer service # on the policy, not your broker.

4. Most of the books I have read talk about 401ks, which neither of us have. I was told because of our income, that I will not be able to contribute to another IRA on top of my simple IRA, including Roth IRAs, which I have never had. I am unsure what to do, since I do not have many tax deferred options in my portfolio. If I put both stocks and bonds in the taxable account, does this mean that I pay taxes every time I readjust the ratios?. If I open up an account with VTSAX in my taxable account, is this still ok? Or is this a bad idea?

The IRS Site says you can contribute to a Roth IRA independent of a SIMPLE IRA. There are income limits for contributing directly to a Roth IRA of AGI, but that seems to be exacerbated because you are MFS ($10K AGI) rather than MFJ ($230K AGI). A drop from $230K AGI to $10K AGI is a pretty sever penalty for MFS vs MFJ. When his student debt is taken care of and you can file joint, this may no longer be an issue. Having a SIMPLE or SEP IRA with a non-zero balance will greatly complicate backdoor Roth contributions so if your joint AGI would be over $230K then the Trad IRAs might be the reason your broker told you you will not be able to contribute to a Roth IRA. A Solo 401k could solve that issue.

Generally you want to hold only stocks in your Taxable and Roth Tax-Free accounts and hold all your bonds (and the rest of your stocks) in Tax-Deferred accounts. It might be worth looking into an advice-only flat-fee/hourly-fee advisor (with a CFP designation) that does not manage accounts, but could tell you if there is a better option than a SIMPLE IRA for your retirement account, such as a SEP IRA or Solo 401k, that would allow you to make higher contributions or (for a 401k) clear off your Trad IRA balances so that you can contribute to a Roth IRA (assuming you make too much to directly contribute to a Roth).

A comparison of Solo 401k, SIMPLE, and SEP is at Sharebuilder401k which can be cross-checked against the IRS Self-Employed Plans article.

5. Recommendations for the ibond, now that it has decreased in percentage. Do I leave it for the 5 years, or withdraw and reinvest it?

The reason to hold bonds is not for the specific yield, but as an uncorrelated investment relative to stocks. When stocks and bonds are both present in a total portfolio, there's a risk-adjusted improvement in return because (mostly) stocks and bonds move independently. Series I US Savings Bonds are a fine bond investment and if bonds are appropriate for you, then they're a good choice for a Taxable account because you can elect to have the interest deferred until you cash them (so they act like they're in a Tax-Deferred account, which is the ideal placement for bonds).

I'd probably re-invest unless your updated AA calls for less bonds. Make sure interest is deferred by checking that option in your TreasuryDirect account.

Take a look at this Asset Allocation template sheet... it's not your data, but if you filled it out with your holdings for the Current section, that's a big part of the info we ask for in the template for Asking Portfolio Questions, which in turn allows us to make more meaningful and relevant suggestions about your situation.

Asset Allocation Sheet
AA Current and Proposed

[delamer]

The priority should be to get your IRAs and taxable account away from the brokers.

Do you have a Fidelity branch office near your home? If so, conisder making an appointment there to get the staff’s help in moving your existing accounts held at Fidelity from under the broker’s control.

They also can assist in moving the Edward Jones IRA.

I suggest this because you seem very uncomfortable with this process (understandably) and having a local contact to help will be valuable. Remember that Fidelity has a financial incentive to help to keep your accounts with them. If there is no local office, I’d contact the Fidelity national customer service to get things moved.

Fidelity is generally considered to have better customer service than Vanguard, especially for the inexperienced. You can transfer assets as is (“in kind”) from your brokers. If for some reason a specific asset isn’t transferable, Fidelity can help you deal with that.

Once the accounts are under your control, then you can make decisions about changes to your portfolio. But take one step at a time, or you’ll get overwhelmed. Fidelity has portfolio management services that may be useful to you, but that’s separate from the transfers. Once the transfers are done, come back here for suggestions.

Good luck.

(I am curious as to how someone who works for a school district can have a variable income.)

[NewToFiLateStarter]

I have been reading all of your responses, and I wanted to thank you so much for taking the time to respond. I have been pouring over the statements online, and I have had no luck finding the expense ratios. When I figure this out, I will edit my post above. From a quick google search, it seems like I might have to look each one up individually on Morning Star, and that will take some time. Or maybe I am missing the information in the statements because I don't know what I am looking at.

I was able to find the management fee from looking at the quarterly statements. It is 1.15 %.

Thanks again

An overwhelmed newbie

[retired@50]

I have been reading all of your responses, and I wanted to thank you so much for taking the time to respond. I have been pouring over the statements online, and I have had no luck finding the expense ratios. When I figure this out, I will edit my post above. From a quick google search, it seems like I might have to look each one up individually on Morning Star, and that will take some time. Or maybe I am missing the information in the statements because I don't know what I am looking at.

I was able to find the management fee from looking at the quarterly statements. It is 1.15 %.

Thanks again

An overwhelmed newbie

Expense ratios will be numbers presented in a percentage format, like 0.05% or 0.73% or 1.14%. Generally speaking, the smaller the number, the better.

Looking up each fund at Morningstar based on the ticker symbol (3 to 5 letter code) would certainly do the trick. Since advisers tend to use lots of funds, it may take a bit of time. I'd suggest you capture all of it in a document or spreadsheet so you don't have to do it more than once.

Keep at it, you'll get there with the help of the forum.

Regards,

[ruralavalon]

Welcome to the forum

We will need some more information to be able to help you.

Emergency funds: We do have emergency funds in a HYSA account, but it likely is more than we need. $76 k.

Debt:

My husband has a student loan around 45k at 2.7%, but he will potentially have the remainder forgiven with PSLF. We had 300k student debt, which we paid off using the Dave Ramsey method over a period of 20 years. Now I regret not putting some of that into retirement.

Mortgage: 359,221 30 year fixed, 2.75 %. I pay an extra 150 to the principal every month

We do not have any car payments as our cars are 20 plus years old. We pay off cc debt every month, but I need to get the spending under control. We do not budget, which I realize is a major issue.

Tax Filing Status: We mfs last year because my husband's loan needed to be on an IBR plan for PSLF. But now that the SAVE plan has been frozen, we are in limbo.

Tax Rate: My rate is 24%, his is 12 %

State of Residence: Washington state

Age: 47/48

Desired Asset allocation: I was thinking 60 stocks/40 bonds

Desired International allocation: Unsure

Please provide an approximate size of your total portfolio: 300,000


Current retirement assets


My husband has a pension with the school district. I do not know any details, and he doesn't understand either. His income is low, so I don't expect this will pay well.


His IRA at Fidelity
This is being managed by a broker, I do not know expense ratio but I am sure it is high. 82k approximately


Her SIMPLE IRA at Edward Jones:

invested in AAGTX: 30,869 approximately. This plan has been in place 1 year.
1% employer match

Her Traditional IRA at Fidelity (Broker at Raymond James):

This is being managed by a broker. 118,604 approximately
Again, I do not know expense ratio, but it is invested in many different things.


We have a shared investment account at Raymond James/Fidelity with both my name and my husband's on it. approximately 64k

ibond 11,148 at current 2.96%. I purchased this in August 2022 when rates were 9.62%

I also have a few paper EE bonds that I need to turn in, probably less than 500 dollars worth, however.

My children have 529s with the same broker, but sadly, it is not much.

Contributions

New annual Contributions:

We both are contributing 10 percent. We both have variable incomes.

I am sorry, I don't have percentages for the above, or more information regarding the costs but I assume with a broker, as I am learning, he is likely taking over 1 percent?

Questions:

I am completely new to investing. I have recently read the Boglehead's guide to investing, JL Collins' blog, and Quit like a Millionaire. I am terrified we will never be able to retire. Any advice is appreciated.

1. I was considering moving my accounts from the actively managed fund at Raymond James/Fidelity, to Vanguard. I was considering 60 percent VTSAX, and 20 percent VBTLX. Thoughts? I am unsure how to do this however, if my husband and I both have our names on the investment account.

2. I am new to this, forgive my ignorance. With the traditional IRAs, do they just get merged to Vanguard IRAs, and then do I have to pick the percentages for the IRA portfolios as well?

3. If my broker is handling the 529s, I assume he is also taking a percentage that I am not aware of? He also holds my term life insurance.

4. Most of the books I have read talk about 401ks, which neither of us have. I was told because of our income, that I will not be able to contribute to another IRA on top of my simple IRA, including Roth IRAs, which I have never had. I am unsure what to do, since I do not have many tax deferred options in my portfolio. If I put both stocks and bonds in the taxable account, does this mean that I pay taxes every time I readjust the ratios?. If I open up an account with VTSAX in my taxable account, is this still ok? Or is this a bad idea?

5. Recommendations for the ibond, now that it has decreased in percentage. Do I leave it for the 5 years, or withdraw and reinvest it?

Thank you so much for your time.

I have been reading all of your responses, and I wanted to thank you so much for taking the time to respond. I have been pouring over the statements online, and I have had no luck finding the expense ratios. When I figure this out, I will edit my post above. From a quick google search, it seems like I might have to look each one up individually on Morning Star, and that will take some time. Or maybe I am missing the information in the statements because I don't know what I am looking at.

I was able to find the management fee from looking at the quarterly statements. It is 1.15 %.

Thanks again

An overwhelmed newbie

In my opinion a 60% stock/40% fixed income is probably a reasonable asset allocation at "Age: 47/48".

I agree with the suggestion that you stop the paying the extra $150 per mouth on the mortgage principal.

Both Fidelity and Vanguard are good choices for your accounts. Both fund companies offer good index funds with very low expense ratios. It may nott be necessary to move the accounts, you might just change the funds used in the accounts and rid yourself of both Edward Jones and Raymond James and their fees.

1) He should contact Human Resources at his school district and get any available description of the pension.

2) Collect recent account statements for all of the accounts -- IRAs, SIMPLE IRA, and joint account. Add the fund names, ticker symbols and expense ratios of all funds used in each account to your original post.

3) What fees are charged by Edward Jones? What are the fees charged by Raymond James? Which accounts have the 1.15% management fee that you have mentioned? Which accounts does Raymond Jones manage?

4) Is the SIMPLE IRA a 5304 plan or a 5305 plan? It makes a difference when you change funds or providers. Wiiki article, SIMPLE IRA. If you do not know ask Edward Jones and your employer.

5) About how much (in dollars) do you feel that you might be able to contribute annually to investing (total, all accounts)?

Please simply add any new information to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.

[mhadden1]

My husband has a pension with the school district. I do not know any details, and he doesn't understand either. His income is low, so I don't expect this will pay well

Is your husband a full-time teacher/counselor/librarian etc? I don't know anything about Washington state but teacher pensions for long-time teachers tend to replace a lot of income and thus are quite desirable. Also public employees like teachers are often eligible for other savings programs like 403b or 457 so you should look into that. Sometimes these are not aggressively promoted, in fact almost hidden so it may take digging to find out.

You can think of retirement income as a three-legged stool. One leg is pension income so the details of husband's pension are important to understand. The next leg is Social Security - you should establish an online account with SSA to check your recorded earnings and estimate your future benefits. Last leg is your own retirement savings which, admirably, you are now trying to get on top of.

Don't worry, it will take some time but you will figure all this out. Good luck!

[NewToFiLateStarter]

Thank you all! I have updated my original post with new information.

[retired@50]

Thank you all! I have updated my original post with new information.

Have you settled on a new custodian?

With the management fees of 1.15% and the expense ratios in the .70% range and higher in some cases, you simply need to break away from Edward Jones and/or Raymond James. This savings of around 2% annually will make a big difference in your retirement balances over time.

You can move to Vanguard, Fidelity, or Schwab and set up a much simpler, self managed, portfolio if you desire one.

Generally speaking, when moving accounts away from an adviser, you should contact the NEW custodian and tell them what you'd like to do. They will need to know the particulars of each account you intend to move.

It most likely not possible to move your current workplace plan, at your current job(s). That's okay as we can help you make the best of what's actually available in the current workplace plans. All other money, that isn't tied to your current employer, should likely be moved to a low-cost custodian.

Regards,

[NewToFiLateStarter]

Thank you for your reply. I am torn between switching to management at Fidelity without active management, vs switching to Vanguard. The other question I am not sure of is that the stocks in the taxable account have been purchased and reinvested by the broker periodically, and some of them have not been held a year yet. Concerned about what that would mean with taxes. I will reach out to Fidelity and discuss this with them. Thank you.

[mhadden1]

With the management fees of 1.15% and the expense ratios in the .70% range and higher in some cases, you simply need to break away from Edward Jones and/or Raymond James. This savings of around 2% annually will make a big difference in your retirement balances over time.

+1

[retired@50]

Thank you for your reply. I am torn between switching to management at Fidelity without active management, vs switching to Vanguard. The other question I am not sure of is that the stocks in the taxable account have been purchased and reinvested by the broker periodically, and some of them have not been held a year yet. Concerned about what that would mean with taxes. I will reach out to Fidelity and discuss this with them. Thank you.

In a taxable account, there is the possibility of capital gains taxes.

To determine the impact, you'd have to know the cost basis and the current share price to get a sense of how much gain or loss there is in any of the stock or fund positions you hold.

Your instinct about short term vs. long term gains is on target. Long term gains would be taxed at a lower rate than short term gains. However, if any of the positions are currently losses and you sell them, then those losses will offset gains on your income taxes.

To get a sense of the magnitude of all of this, you might be able to use the website where your stock and fund positions are revealed to you. You'd be looking for cost basis or unrealized capital gains and/or unrealized capital losses.

About the Fidelity vs. Vanguard decision... I would imagine that using an adviser while holding low cost index funds is possible at either place, but Vanguard certainly does more of the index investing than Fidelity. Most Fidelity advisory clients that post in this forum seeking help find themselves in Fidelity actively managed mutual funds.

You might find the wiki page on paying a tax cost to switch funds helpful.
https://www.bogleheads.org/wiki/Paying_ ... itch_funds

Regards,

[bonesly]

Share class: Front load
...
average expense ratio around 0.81% including some >1%
FADIX 1.43%
FAEGX 1.21%
FEIRX 1.10%
FTMKX 1.46%
FLSTX 1.27%
FCTGX 1.47%
...
Management fee: 1.15%

Can NOT stress enough what a good move you're making to get away from this sheer robbery of your future financial well-being that's just lining the pockets of these financial "managers." Please update us when the money is under your self-direction at Fidelity (or Vanguard) and we can continue to help suggest a simple, low-cost index portfolio that meets your desired asset allocation. Then the magic of compounding over time can start working more effectively for you rather than your (very costly) broker.

[ruralavalon]

Thank you for your reply. I am torn between switching to management at Fidelity without active management, vs switching to Vanguard. The other question I am not sure of is that the stocks in the taxable account have been purchased and reinvested by the broker periodically, and some of them have not been held a year yet. Concerned about what that would mean with taxes. I will reach out to Fidelity and discuss this with them. Thank you.

Both Vanguard and Fidelity are good choices in my opinion. It's largely a matter of personal preference. My personal preference is Vanguard.

Both Vanguard and Fidelity offer very diversifed index funds with very low expense ratios. Vanguard offers the largest array of low cost mutual funds and ETFs to choose from, has better money market funds with higher yields because of lower expense ratios, and a better selection of all-in-one balanced funds if that is what you prefer.

Switching the IRAs to another provider and then changing the funds used in the IRAs will not have income tax consequences. Contact Vanguard or Fidelity, whichever you choose, and ask them to help you with rollovers of those accounts.

For the taxable account, what is the UNrealized capital gain/loss status and amount for each investment? Be sure to get the cost basis information on the investments in the taxable account before any transfer. Contact Vanguard or Fidelity, whichever you choose, and ask them to help you with a transfer "in kind" of the Investments in the taxable account.

[NewToFiLateStarter]

I called Fidelity customer service and the person I spoke with had no clue how to help me drop the broker and keep the funds at Fidelity only. The local offices near me have very poor reviews online. I have set up an appointment with the local to talk to them in a few weeks. I think I am leaning towards Vanguard. Would I move all things as is, and then switch them to index funds once things are moved over?

To figure out cost basis, would the Investment Gain/Loss column in my joint account be what I need? Overall, the joint account has lost money, most things are in the red.

Ideally, would the IRAs have bond index funds, and then VTSAX for example, would be in the taxable joint account? I will reach out once I get things moved over.

Thank you all once again.

[retired@50]

I called Fidelity customer service and the person I spoke with had no clue how to help me drop the broker and keep the funds at Fidelity only. The local offices near me have very poor reviews online. I have set up an appointment with the local to talk to them in a few weeks. I think I am leaning towards Vanguard.

Would I move all things as is, and then switch them to index funds once things are moved over? <- I would, assuming the new custodian will accept the particular mutual funds. In some cases, a fund is exclusive to a certain broker like Edward Jones. You can call the new custodian and ask them about each individual fund.

To figure out cost basis, would the Investment Gain/Loss column in my joint account be what I need? <- This sounds like you're on the right track.
Overall, the joint account has lost money, most things are in the red. <- This is both a blessing and a curse. Obviously you invest to make money, but when funds you don't really want to own anymore are showing as losses, then the conventional wisdom is to dump them, harvesting the loss for income tax purposes and move on.

Ideally, would the IRAs have bond index funds, and then VTSAX for example, would be in the taxable joint account? <- Maybe. The first order of business is to decide what you'd want your overall asset allocation to be, then implement that allocation in the most tax efficient way possible based on the account types you hold.

I will reach out once I get things moved over.

Thank you all once again.

See responses above, in blue.

Regards,

[NewToFiLateStarter]

A few updates above. I think we are ready to make a move. As they say, the best time to plant a tree was 20 years ago, and the next best time is today.

[ruralavalon]

A few updates above. I think we are ready to make a move. As they say, the best time to plant a tree was 20 years ago, and the next best time is today.

Form 5304-SIMPLE plans give each employee the freedom to select the financial institution that will act as custodian for their SIMPLE plan account. Using the "Model Salary Reduction Agreement" that their employer gives them at least once a year (no later than 60 days before the beginning of the next calendar year), the employee is allowed to select the financial institution that will serve as the trustee, custodian, or issuer of their SIMPLE IRA. Even if their employer has a "preferred" financial institution, the employee is nevertheless free to request that an account be set up for them at an alternative institution. If taking advantage of this option, the employee must allow their employer time to set up their new account.

[NewToFiLateStarter]

A few updates above. I think we are ready to make a move. As they say, the best time to plant a tree was 20 years ago, and the next best time is today.

Form 5304-SIMPLE plans give each employee the freedom to select the financial institution that will act as custodian for their SIMPLE plan account. Using the "Model Salary Reduction Agreement" that their employer gives them at least once a year (no later than 60 days before the beginning of the next calendar year), the employee is allowed to select the financial institution that will serve as the trustee, custodian, or issuer of their SIMPLE IRA. Even if their employer has a "preferred" financial institution, the employee is nevertheless free to request that an account be set up for them at an alternative institution. If taking advantage of this option, the employee must allow their employer time to set up their new account.

Wow.. so that would mean, that I could ask Edward Jones to switch from the high ER investment to say, VTSAX and or VBTLX?

[ruralavalon]

A few updates above. I think we are ready to make a move. As they say, the best time to plant a tree was 20 years ago, and the next best time is today.

Form 5304-SIMPLE plans give each employee the freedom to select the financial institution that will act as custodian for their SIMPLE plan account. Using the "Model Salary Reduction Agreement" that their employer gives them at least once a year (no later than 60 days before the beginning of the next calendar year), the employee is allowed to select the financial institution that will serve as the trustee, custodian, or issuer of their SIMPLE IRA. Even if their employer has a "preferred" financial institution, the employee is nevertheless free to request that an account be set up for them at an alternative institution. If taking advantage of this option, the employee must allow their employer time to set up their new account.

Wow.. so that would mean, that I could ask Edward Jones to switch from the high ER investment to say, VTSAX and or VBTLX?

You can use the "Model Salary Reduction Agreement" which your employer gives you to select a new custodian, like Vanguard [Ascensus] or Fidelity, to hold your SIMPLE IRA.

Vanguard, SIMP.E IRA

[NewToFiLateStarter]

A few updates above. I think we are ready to make a move. As they say, the best time to plant a tree was 20 years ago, and the next best time is today.

Form 5304-SIMPLE plans give each employee the freedom to select the financial institution that will act as custodian for their SIMPLE plan account. Using the "Model Salary Reduction Agreement" that their employer gives them at least once a year (no later than 60 days before the beginning of the next calendar year), the employee is allowed to select the financial institution that will serve as the trustee, custodian, or issuer of their SIMPLE IRA. Even if their employer has a "preferred" financial institution, the employee is nevertheless free to request that an account be set up for them at an alternative institution. If taking advantage of this option, the employee must allow their employer time to set up their new account.

Wow.. so that would mean, that I could ask Edward Jones to switch from the high ER investment to say, VTSAX and or VBTLX?

You can use the "Model Salary Reduction Agreement" which your employer gives you to select a new custodian, like Vanguard [Ascensus] or Fidelity, to hold your SIMPLE IRA.

Vanguard, SIMP.E IRA

I see. Thank you. But since there's a 2 year rule about transferring money with simple IRAs, would that mean that I would need to leave the current account at Edward Jones, and start a new one, then after the 2 years, transfer the EJ one? Thanks

[ruralavalon]

A few updates above. I think we are ready to make a move. As they say, the best time to plant a tree was 20 years ago, and the next best time is today.

Form 5304-SIMPLE plans give each employee the freedom to select the financial institution that will act as custodian for their SIMPLE plan account. Using the "Model Salary Reduction Agreement" that their employer gives them at least once a year (no later than 60 days before the beginning of the next calendar year), the employee is allowed to select the financial institution that will serve as the trustee, custodian, or issuer of their SIMPLE IRA. Even if their employer has a "preferred" financial institution, the employee is nevertheless free to request that an account be set up for them at an alternative institution. If taking advantage of this option, the employee must allow their employer time to set up their new account.

Wow.. so that would mean, that I could ask Edward Jones to switch from the high ER investment to say, VTSAX and or VBTLX?

You can use the "Model Salary Reduction Agreement" which your employer gives you to select a new custodian, like Vanguard [Ascensus] or Fidelity, to hold your SIMPLE IRA.

Vanguard, SIMP.E IRA

I see. Thank you. But since there's a 2 year rule about transferring money with simple IRAs, would that mean that I would need to leave the current account at Edward Jones, and start a new one, then after the 2 years, transfer the EJ one? Thanks

Wiiki article, SIMPLE IRA.

Does the 5304 plan document from u our employer state a 2 year rule?

[NewToFiLateStarter]

Wow.. so that would mean, that I could ask Edward Jones to switch from the high ER investment to say, VTSAX and or VBTLX?

You can use the "Model Salary Reduction Agreement" which your employer gives you to select a new custodian, like Vanguard [Ascensus] or Fidelity, to hold your SIMPLE IRA.

Vanguard, SIMP.E IRA

I see. Thank you. But since there's a 2 year rule about transferring money with simple IRAs, would that mean that I would need to leave the current account at Edward Jones, and start a new one, then after the 2 years, transfer the EJ one? Thanks

Wiiki article, SIMPLE IRA.

Does the 5304 plan document from u our employer state a 2 year rule?

I thought that was for all Simple IRAS. I will find out then. Thank you

[ruralavalon]

A few updates above. I think we are ready to make a move. As they say, the best time to plant a tree was 20 years ago, and the next best time is today.

Form 5304-SIMPLE plans give each employee the freedom to select the financial institution that will act as custodian for their SIMPLE plan account. Using the "Model Salary Reduction Agreement" that their employer gives them at least once a year (no later than 60 days before the beginning of the next calendar year), the employee is allowed to select the financial institution that will serve as the trustee, custodian, or issuer of their SIMPLE IRA. Even if their employer has a "preferred" financial institution, the employee is nevertheless free to request that an account be set up for them at an alternative institution. If taking advantage of this option, the employee must allow their employer time to set up their new account.

Wow.. so that would mean, that I could ask Edward Jones to switch from the high ER investment to say, VTSAX and or VBTLX?

You can use the "Model Salary Reduction Agreement" which your employer gives you to select a new custodian, like Vanguard [Ascensus] or Fidelity, to hold your SIMPLE IRA.

Vanguard, SIMP.E IRA

I see. Thank you. But since there's a 2 year rule about transferring money with simple IRAs, would that mean that I would need to leave the current account at Edward Jones, and start a new one, then after the 2 years, transfer the EJ one? Thanks

Wiiki article, SIMPLE IRA.

Some SIMPLE plans (including those established with the IRS model plan Form 5305-SIMPLE) require the use of a "designated financial institution" as trustee or custodian of the employees' SIMPLE IRA's. In that event, the employees must be given the option of transferring their balances to any other SIMPLE IRA, or, after the 2-year period, any other IRA, without any cost or penalty. The financial institution may require notice prior to the start of a year. Cost-less transfers may be limited to new contributions; surrender penalties could be imposed on withdrawals of past contributions. Monthly transfers are sufficient for this purpose.

Does the 5304 plan document ot your employer require use of Edward Jones as a "designsted financial institution"? Even then you can require transfer to a SIMPLE IRA at a different custodian.

[NewToFiLateStarter]

My IRA is being moved over. I actually did it!

My children's 529's are also being moved. Does anyone have any thoughts on how to pick assets? One child is only about 2 years away from college, one is 6 years and the other is 10 years out. Would you choose your own options or choose a target portfolio based on graduation date? The expense ratios seem similar..

Thanks

[ruralavalon]

My IRA is being moved over. I actually did it!

My children's 529's are also being moved. Does anyone have any thoughts on how to pick assets? One child is only about 2 years away from college, one is 6 years and the other is 10 years out. Would you choose your own options or choose a target portfolio based on graduation date? The expense ratios seem similar..

Thanks

Congratulations on moving your IRA .

I have no opinion on the 529 question. 529s didn't exist when we were putting our children thru college.

[retired@50]

My IRA is being moved over. I actually did it!

My children's 529's are also being moved. Does anyone have any thoughts on how to pick assets? One child is only about 2 years away from college, one is 6 years and the other is 10 years out. Would you choose your own options or choose a target portfolio based on graduation date? The expense ratios seem similar..

Thanks

Congratulations on the progress.

I'd choose a target portfolio based on graduation date.

You wouldn't believe the angst and back and forth people go through in this forum to select 529 investments and asset allocations.

Regards,

[NewToFiLateStarter]

Running into some trouble transferring accounts. My husband's IRA transfer was rejected by Raymond James. He called Raymond James today to discuss, and they told him that he was setting it up as a joint account not an IRA, so it was rejected. But I checked again on the Vanguard website and it's clearly an IRA. I see that many of his holdings are Fidelity's mutual funds, etc. Could this be the issue? Would it be easier to ask them to sell all the assets in the IRA and then just move the money in the IRA over, since we aren't keeping these assets anyways?

Thanks again!

[retired@50]

Running into some trouble transferring accounts. My husband's IRA transfer was rejected by Raymond James. He called Raymond James today to discuss, and they told him that he was setting it up as a joint account not an IRA, so it was rejected. But I checked again on the Vanguard website and it's clearly an IRA. I see that many of his holdings are Fidelity's mutual funds, etc. Could this be the issue? Would it be easier to ask them to sell all the assets in the IRA and then just move the money in the IRA over, since we aren't keeping these assets anyways?

Thanks again!

You can call Vanguard and ask if any of the Fidelity funds cannot be held at Vanguard. If there are some funds exclusive to Raymond James, then sell those funds and transfer cash.

Just a guess, but that probably isn't the issue. Verify the Vanguard IRA account number and let Raymond James know it's fine on the Vanguard end. The cynic in me thinks this could be a shameless ploy by RJ in an attempt to hold onto the account. You typically want to work with the receiving custodian since they have a greater interest in the transfer working smoothly. Make certain Vanguard has the correct RJ account number and that the two accounts are titled identically. Either with full middle name, or middle initial. Even something that small can matter.

Regards,

[bonesly]

Raymond James ... told him that he was setting it up as a joint account not an IRA, so it was rejected.

Just a guess, but that probably isn't the issue. Verify the Vanguard IRA account number and let Raymond James know it's fine on the Vanguard end. The cynic in me thinks this could be a shameless ploy by RJ in an attempt to hold onto the account. You typically want to work with the receiving custodian since they have a greater interest in the transfer working smoothly. Make certain Vanguard has the correct RJ account number and that the two accounts are titled identically. Either with full middle name, or middle initial. Even something that small can matter.

Would not doubt the "shameless ploy" tactic, especially if you already have verified the account titles are individual retirement accounts (IRAs) on both ends (not joint like RJ claimed was the reason for the rejection). If they tell you it's a joint account, that's possibly a clerical error, but also could just be a straight-up lie from the less-than-scrupulous RJ advisors/managers. Recheck the account numbers as Retired@50 suggested and make sure Vanguard is pulling from RJ IRA to Van IRA (and not a mistake on Van's part).

The Fidelity funds not being transferrable "in-kind" may be the case (along with proprietary RJ funds), but that doesn't match the reason they gave you which is wrong account type (IRA to joint Taxable).