consolidating accounts

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veena9111
Posts: 69
Joined: Sat Jan 10, 2015 6:54 pm

consolidating accounts

Post by veena9111 » Sun Nov 12, 2017 2:04 pm

Good afternoon,
My husband and I would like to transfer our accounts from one of the brokerages to Vanguard. It will be about $ 1,000,000.Most of it is in individual stocks. Should I liquidate all the stocks and pt them in a 3 fund portfolio, or leave the stocks as they are. If I liquidate them then what will the tax implications be. We are 64 and 57 yrs old respectively.About 600,000 are in various IRA's and a minimal amount in HSA's.
Thank you for your assistance

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: consolidating accounts

Post by dbr » Sun Nov 12, 2017 2:11 pm

There are no tax implications for moving an IRA from one broker to another as long as it is done as a custodial transfer and not as a distribution. Others can chime in on the details if Vanguard is not able to explain. I assume assets in an HSA can be transferred equally well, but someone else will know.

In general diversified index funds are preferred over collections of individual stocks to the extent the stock collection is not very many stocks or too concentrated in one industry or company. You would want to compare the sales commissions for selling where you are compared to Vanguard. There are no tax costs to sell and buy assets in an IRA.

If you have stocks in taxable accounts there could be a capital gain that would be taxed. Before you do anything you need to tabulate the cost basis for all your holdings and see what tax cost there might be from selling those holdings.

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oldcomputerguy
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Re: consolidating accounts

Post by oldcomputerguy » Sun Nov 12, 2017 2:14 pm

veena9111 wrote:
Sun Nov 12, 2017 2:04 pm
Good afternoon,
My husband and I would like to transfer our accounts from one of the brokerages to Vanguard. It will be about $ 1,000,000.Most of it is in individual stocks. Should I liquidate all the stocks and pt them in a 3 fund portfolio, or leave the stocks as they are. If I liquidate them then what will the tax implications be. We are 64 and 57 yrs old respectively.About 600,000 are in various IRA's and a minimal amount in HSA's.
Thank you for your assistance
Without knowing more it's going to be difficult to give you good answers. I suggest you re-post following the format in this "Asking Portfolio Questions" post. Folks here are eager to help. If you post in this format, it'll give them the information needed to give you a better answer.

You'll likely get a large number of recommendations that you sell individual stocks and purchase broad-market index funds. But depending on capital-gain issues, it won't be quite that simple. Anything liquidated inside a tax-advantaged account such as an IRA should not incur tax liabilities from the sale. Anything outside such accounts, such as stocks held in a brokerage account, may incur capital gain taxes, depending on the increase in share price since you bought them and your current tax bracket.
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

veena9111
Posts: 69
Joined: Sat Jan 10, 2015 6:54 pm

Re: consolidating accounts

Post by veena9111 » Mon Nov 13, 2017 6:33 pm

Thank you, I will do it this weekend
Appreciate your assistance
V

billfromct
Posts: 719
Joined: Tue Dec 03, 2013 9:05 am

Re: consolidating accounts

Post by billfromct » Mon Nov 13, 2017 7:43 pm

With the "various IRAs", you would want to convert them to cash in each IRA account then do a "trustee to trustee" transfer. Your present brokerage should make the check out to "VFTC FBO veeba" for each separate IRA. Abbreviations are: Vanguard Fiduciary Trust Company & For Benefit Of.

The check will be sent you, then you will forward it to Vanguard with a cover letter listing all the particulars. This is the way I transferred my 401k into my Vanguard Rollover IRA a couple of years ago.

Contact Vanguard & they will walk you through it & be on the phone with you when you talk to your current brokerage, if you want them to.

You may want to sell your individual stocks after you retire (maybe in the 15% Federal tax bracket so you can take advantage of the 0% long term capital gains rate) but before SS & RMDs (required minimum distributions) at age 70.

bill

livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: consolidating accounts

Post by livesoft » Mon Nov 13, 2017 7:57 pm

What is your intention with the individual stocks? While there are no tax consequences to selling stocks in an IRA, there are still commissions. Vanguard would charge you commissions to sell those stocks if that is your intention. Your existing financial institutions may charge lower commissions than Vanguard or even no commissions to sell the stocks you own.

Even with one million dollars of stocks, one will not get so-called Flagship status at Vanguard. That's because only Vanguard products are included in whether one gets Flagship status.

Personally, I would recommend liquidating the stocks and using broad-market index funds (i.e. 3-fund portfolio) to anyone who has to ask whether to use individual stocks or a 3-fund portfolio.
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Earl Lemongrab
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Re: consolidating accounts

Post by Earl Lemongrab » Tue Nov 14, 2017 12:34 pm

billfromct wrote:
Mon Nov 13, 2017 7:43 pm
With the "various IRAs", you would want to convert them to cash in each IRA account then do a "trustee to trustee" transfer. Your present brokerage should make the check out to "VFTC FBO veeba" for each separate IRA. Abbreviations are: Vanguard Fiduciary Trust Company & For Benefit Of.

The check will be sent you, then you will forward it to Vanguard with a cover letter listing all the particulars. This is the way I transferred my 401k into my Vanguard Rollover IRA a couple of years ago.
Ugh. Why would you want to do that? It's much easier to fill out the form to do an ACATS transfer of the account to the new custodian. The assets can either be sent in-kind and dealt with at the new brokerage, or sold and just the cash sent.

Most custodians can do ACATS transfers in a week to ten days anymore.

If there are a lot of individual stocks to handle, I'd go to a custodian that will give a bonus and free trades (at least initially).
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veena9111
Posts: 69
Joined: Sat Jan 10, 2015 6:54 pm

Re: consolidating accounts

Post by veena9111 » Fri Dec 01, 2017 11:57 pm

Thank You all for your replies. I am sorry for not answering earlier .
I am self employed
Here is how the portfolio is

Three to six months of expenses (indicate if you have this, but it is generally not part of your asset allocation); yes $50,000

Debt: Indicate if you have any debt (credit card, school loans, car loans, mortgage) and the interest rate you are paying on each loan.

Mortgage: $110,000. Rate 3.25%. House Value : 425,000

Son's school loan: $80,000

Tax Filing Status: Married filing jointly
(Single, Married Filing Jointly, Married Filing separately, Head of Household, Qualifying Widow/Widower with Dependent Children)

Tax Rate:
Federal : 25%
State : 0%
State of Residence:Fl
Age: Me. 57 yrs
Spouse: 64 yrs
Desired Asset allocation: xx% stocks / xx% bonds: Not sure .Being in stocks has certainly increased my portfolio
Desired International allocation: xx% of stocks: I am hesitant about international stocks

If you want to give us a detailed breakdown within each asset class (xx% large caps, xx% mid caps, xx% bonds, xx% cash, etc.), go ahead. (Most people probably will not want to do this. If you are not sure what this means, please disregard.)

Please provide a hint as to the size of your current total portfolio (as in high four-figures, mid five-figures, low six-figures, etc.) What might be appropriate for a very large portfolio might not be appropriate for a new investor.

Providing the split of your assets and contributions between taxable and tax-advantaged accounts is also helpful. Please include all investment and retirement accounts (yourself and spouse or civil partner, if applicable) as it's important to look at the portfolio as a unified whole rather than look at accounts in isolation. Also include the available funds in your employer provided retirement plans. For example:

Current retirement assets

Taxable. All is in individual stocks. Joint Portfolio : $420,000.


His 401k
Vanguard Total stock market: $65,000
Etrade: All stocks $35,000
xx% fund name (ticker symbol) (expense ratio)
Company match?

His Roth IRA at TDA : $ 85,000
His SEP at TDA. $125,000
His Roth. at TDA $ 20,000

Everything is in stocks

xx% fund name (ticker symbol) (expense ratio)
xx% fund name (ticker symbol) (expense ratio)


HERS : All in individual stocks
Her SIMPLE IRA at TDA $160,000
Roth $ 80,000
Traditional IRA $ 152,000
Vanguard 401 K (VTSMX). $. 68,000
(Vanguard total stock market index fund)

Her Traditional IRA at Vanguard
xx% fund name (ticker symbol) (expense ratio)

Total of All Accounts Together (not each account individually) should equal 100%.

Contributions

New annual Contributions $
$xx his 401k (also specify any employer matching contributions) $. 30,000~35,000
$xx her 401k (also specify any employer matching contributions) $. 30,000~35,000
$xx his IRA/Roth IRA. $. 6,500
$xx her IRA/Roth IRA $. 6,500
$xx taxable (for retirement, not short term goals)

Available funds

Funds available in his 401(k)
Fund name (ticker symbol) (expense ratio)
Fund name (ticker symbol) (expense ratio)
Fund name (ticker symbol) (expense ratio)

Funds available in her 403(b)
Fund name (ticker symbol) (expense ratio)
Fund name (ticker symbol) (expense ratio)
Fund name (ticker symbol) (expense ratio)

1. Most of the portfolio is in conservative dividend stocks mostly Tech. I have a lot MSFT shares(2500) which were bought for a DCA of $40.00

2.The rest of the portfolio has 50~100 shares of DOW 30, popular Tech stocks like INTC,ORCL

3.A mixed portfolio of defense and banking stocks

4.We own a couple of rental properties outright Average rent collection $1500 per month

Questions:
1.I am a bit concerned about the current stock market valuation and would like to sell the stocks and go with the Vanguard 3 fund portfolio
2.I am not sure of the tax consequences if I sell all the stocks
3.Should I sell one third half or all the stocks , and cash out(I really want to do that) or should I sell them in percentages and then buy Vanguard
funds
My gut tells me to sell everything because the stock market may crash drastically Is it better to pay the taxes or lose 50%of the value
Thank you so much in advance
Regard


Key Points

* Please make sure that percentages add up to 100% across all of your accounts, not within each account.
* Please make sure that you've provided all the information requested above. Omitting information often results in delays and/or longer exchanges.
* Please post fund names, not just ticker symbols.
* If you have an account in a retirement plan with your employer, be sure to enter the expense ratios for the funds as they are in your company's specific plan; often the fund expense ratios in 401k/403b/457 plans are different from the "retail" expense ratios you will find for a fund when doing an internet search.
* If

2

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