Transferring USAA IRAs to Vanguard and TSP

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seadreamer
Posts: 6
Joined: Fri Dec 07, 2018 4:42 pm

Transferring USAA IRAs to Vanguard and TSP

Post by seadreamer » Sat Dec 08, 2018 4:47 pm

I'm new to the forum.

I have two IRAs at USAA I would like to move:

1) Roth IRA - $14K
2) Traditional IRA - $3K

I'm planning to move the Roth IRA over to Vanguard. I plan to continue to fund at $5500 per year through retirement (sometime after 2040). I still need to make a 2018 contribution. As far as funds, I'mconsidering Vanguard 2040 retirement fund. However, I was also thinking of a 60/40 Stocks/Bonds because the expense ratios are even lower (.07 vs. .15) on the Vanguard Balanced Index Fund Admiral Shares.

I would like to move the traditional IRA over to my Thrift Savings Plan (currently in lifecycle 2040). I am no longer in the military so I can't contribute directly but I like the ease of use and low expenses there.

My questions are:
1) Does anyone know what the expenses are when moving IRAs from USAA to Vanguard and TSP?
2) Is it easier to move the account to Vanguard first and then contribute my 2018 contribution later?
3) Do the Vanguard funds I have listed make sense? Others I should consider?
4) Has anyone intentionally started an IRA at another institution (such as USAA) w/the intention of regularly transferring it to TSP? Is this a bad idea?
5) Last, is there anything I should be careful of when moving funds?

Thanks for any advice. I've been reluctant to move any dollars around for fear of making a mistake. Although I'm fairly good with numbers long-term financial planning makes me nervous.

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Duckie
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Joined: Thu Mar 08, 2007 2:55 pm

Re: Transferring USAA IRAs to Vanguard and TSP

Post by Duckie » Sat Dec 08, 2018 6:05 pm

seadreamer, welcome to the forum.
seadreamer wrote:Does anyone know what the expenses are when moving IRAs from USAA to Vanguard and TSP?
Some custodians charge an account closing fee up to $100. Check with USAA to see if they do.
Is it easier to move the account to Vanguard first and then contribute my 2018 contribution later?
It's the same either way.
Do the Vanguard funds I have listed make sense? Others I should consider?
Do you have a current employer plan like a 401k? What are you planning to use in the TSP? Usually IRAs work around employer plans. Also, in general it's better to put assets with higher expected growth (stocks) in Roth accounts and assets with lower expected growth (bonds) in pre-tax accounts. That's because you've already paid the taxes in the Roth accounts so future growth is tax-free. So consider putting a total US stock fund (VTSAX) or total international stock fund (VTIAX) in the Roth IRA and using the TSP for bonds.
Has anyone intentionally started an IRA at another institution (such as USAA) w/the intention of regularly transferring it to TSP? Is this a bad idea?
Are you planning to make deductible contributions to a TIRA and roll to the TSP on a regular basis?
Last, is there anything I should be careful of when moving funds?
It's frequently better if you initiate the rollovers at the receiving custodian (Vanguard/TSP). They have an incentive to get it done quickly.

seadreamer
Posts: 6
Joined: Fri Dec 07, 2018 4:42 pm

Re: Transferring USAA IRAs to Vanguard and TSP

Post by seadreamer » Sun Dec 09, 2018 1:34 pm

Thanks Duckie for answering a lot of questions.

I am currently a stay at home mom - spouse has 401k (or 403b) through employer. In the TSP I'm using their L2040 fund.

02nz
Posts: 570
Joined: Wed Feb 21, 2018 3:17 pm

Re: Transferring USAA IRAs to Vanguard and TSP

Post by 02nz » Sun Dec 09, 2018 1:42 pm

Hopefully your transfers go smoothly, but double-check everything. Years ago I moved a Roth IRA from USAA to Vanguard. It went "missing" for weeks; finally it turned out that USAA didn't bother to put state and zip code on the address of the mail they sent to Vanguard. (USAA has been good with other services, but I swore off their investment services after that.)

More recently (within the past few months) I did a partial transfer from TSP to Vanguard. Vanguard credited the assets to my taxable brokerage account rather than to the rollover IRA I specifically created for the purpose (and despite clear written instructions). They did fix it when I pointed it out, but this (combined with some other stuff) dented my confidence in Vanguard's brokerage services, so I moved everything out. Not saying you're likely to have problems, but double-check everything Vanguard does, because Vanguard clearly doesn't.

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