Where to Open a Roth IRA

juliettejoy · Post by **juliettejoy** » Tue May 10, 2011 11:21 pm

I am 30, and currently have small amounts in 2 different 403(b) accounts, from previous jobs. One in AIG VALIC ($300) and the other in TIAA Cref ($1000).

No longer in either of these two jobs, I want to Roll over both amounts into a Roth IRA account. I planned to do this at VALIC, just since my husband's current 403(b) account is wtih them, rather than because I know anything about the company. I had called (Valic) today to see if I could move the money / open Roth IRA, and pretty much tomorrow am supposed to be sending back the forms.... BUT I started to do some online research as to WHERE TO OPEN A ROTH IRA... DOES IT MATTER?

As a Stay-at-home mom for now, I feel overwhelmed at all the options... and from vague online exploring I seem to be getting the idea that possibly moving my TIAA Cref 403 b money to a new Roth IRA at Valic may not be a good idea... it may be better at a company like Vanguard? Is this true, and, if so why?

Note: This NEW ROTH IRA I open will then be the only retirement account I will have. My husband (30) has his 403(b), but will also start a Roth IRA, with the goal of us eventually contributing the maximum to each of these accounts each year. We will pay off our $4000 credit card debt before that, but I want to get my random small amounts into one Account for now, and at least try to maximize its earning. We have 1000 emergency fund in place.

Any help advice would be GREATLY appreciated.

Also, we plan to open an ESA for our kid/kids ... where is a good place to do this, and do we open one for each child, or one for both?

Thanks for ALL advice~~

jmbkb4 · Post by **jmbkb4** » Tue May 10, 2011 11:41 pm

C) None of the above?

letsgobobby · Post by **letsgobobby** » Wed May 11, 2011 12:00 am

with $1300 I would choose Schwab. You can buy their ETFs for free and they have many good, inexpensive ones.

You didn't ask for this particular advice, but I would definitely pay off credit cards and increase retirement savings, not to mention establishing a solid emergency fund, long before contributing to college savings.

555 · Post by **555** » Wed May 11, 2011 1:33 am

Vanguard. And buy a mutual fund (don't mess with ETFs). You can buy the STAR fund or a Target Retirement fund.

Sunflower · Post by **Sunflower** » Wed May 11, 2011 2:49 am

Juliettejoy,

You should know this is a pro-Vanguard group so the responses will be pretty predictable. But Vanguard is a good choice and it has a very good reputation.

Vanguard is known as having very low expense ratios/fees/overhead so you get to keep more of the money that is gained than you would with other mutual fund companies.

The STAR mutual fund WAS the only one with a minimum of $1,000 but now there are others including Target Retirement funds.

If I were you I would purchase a Target Retirement fund with a stock/bond allocation to my liking. It is a "set it and forget it" type of fund.

Good luck!

Carl53 · Post by **Carl53** » Wed May 11, 2011 5:35 am

juliettejoy

Welcome to the Bogleheads forum.

Vanguard does charge an annual maintenance fee for low balance accounts, as do many institutions although I have no first hand knowledge about Valic or TIAA Cref.

This $20 fee can be avoided by going with online file management as described by Vanguard.
"For nonretirement accounts, traditional IRAs, Roth IRAs, UGMAs/UTMAs, SEP-IRAs, and education savings accounts (ESAs):
We charge a $20 annual account service fee for each Vanguard fund with a balance of less than $10,000 in an account. This fee doesn’t apply if you sign up for account access on Vanguard.com and choose electronic delivery of statements, confirmations, and Vanguard fund reports and prospectuses. This fee also doesn’t apply to members of Flagship®, Voyager Select®, and Voyager Services®."

Die Hard · Post by **Die Hard** » Wed May 11, 2011 5:45 am

Which funds can now be opened with less than $3,000?

Could someone name these or post a link?

Thanks!

dbltrbl · Post by **dbltrbl** » Wed May 11, 2011 6:24 am

Juliete,

Run from Valic. TIAA is not much better. Yes this board is pro Vanguard but with less than $3000.00 you may consider STAR fund at vanguard or if your total is about $2500.00 , T. Rowe price is ok too besides Schwab. Once you reach $3000.00, move to Total Stock Market index.

jpark1982 · Post by **jpark1982** » Wed May 11, 2011 7:46 am

Die Hard wrote:Which funds can now be opened with less than $3,000?

Could someone name these or post a link?

Thanks!

http://news.morningstar.com/articlenet/ ... ?id=380967

I would suggest Schwab as well, since you can build a really well diversified portfolio that you control the AA for less than $1,000.

hand · Post by **hand** » Wed May 11, 2011 7:50 am

Vanguard, see the recent discussion on lowered fund minimums!

http://www.bogleheads.org/forum/viewtopic.php?t=74450

House Blend · Post by **House Blend** » Wed May 11, 2011 9:44 am

juliettejoy,

Stay away from ETFs at any brokerage whether it is Schwab or anyone else. The people who should be using ETFs are the ones who don't need to ask for advice.

I would use Vanguard for your Roth IRA. Pick a Target Retirement fund and be done with it.

In terms of process, you should initiate things with Vanguard, not TIAA-CREF or Valic. It is in their interests to make it happen.

Welcome to the forum.

atomicrc11 · Post by **atomicrc11** » Wed May 11, 2011 12:35 pm

From a fee standpoint, TIAA-CREF is higher than Vanguard. However, in terms of availability of funds and investment minimums, TIAA-CREF is better than most. Their IRA's allow you to start with as little as $100 and invest $100 for further investments and split it among as many funds as you like.

Starting out with them was nice. However, if you want a single fund solution, go with Vanguard. The TIAA-CREF target date funds are far more expensive than Vanguard.

I use TIAA-CREF for my employer sponsored plan and have been happy with the service. The expense ratio's are a higher than Vanguard for their IRA's but the simplicity is key for me as both my accounts and my spouses' are at TIAA-CREF.

DSInvestor · Post by **DSInvestor** » Wed May 11, 2011 12:43 pm

Here's a link to a Vanguard announcement - Vanguard cuts fund minimums, opens door to new investors:
https://personal.vanguard.com/us/insigh ... t-05112011