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URL:  http://boards.fool.com/actually-its-even-worse-than-barak0-suggests-the-17054769.aspx

Subject:  Re: Vanguard Roth Date:  4/12/2002  7:59 PM
Author:  jrr7 Number:  34183 of 75681

Actually it's even worse than Barak0 suggests!

The paperwork involved with starting an IRA is EXPENSIVE. Vanguard passes on that cost to you. To minimize fees, start out with only one fund, preferably a fund-of-funds like their LifeStrategy series.

Here is their list of fees, PER FUND:

- OUTSIDE AN IRA ONLY, $10/year if your account balance drops below $2500.
- INSIDE AN IRA ONLY, $10/year (can be paid using money inside or outside the IRA) if the fund balance is below $5000 AND the total funds at vanguard is below $50,000
- ANY INDEX FUND, an additional $2.50/quarter fee, taken directly from the dividends, if the fund balance is below $10,000.

In other words, if you have three index funds in an IRA, each with a balance of $1000, and no other Vanguard assets, you will be paying $60/year in fees.

If you want to have several funds with small balances, it might be better to pick a different IRA provider, and use them until your fund balances are high enough. Remember, there's no penalty to transfer between funds, or to transfer from one IRA provider to the other.
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