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This is my first post and I am just getting started with the Fool!

My question is as follows:

My wife has an IRA Account with a full service broker that she rolled over from a 401k when her previous employer let her go. (She didn't go back to work for about a year and had to do something with the 401k!) Anyway, the IRA with the FSB is just not performing and since she went back to work she has a 401k so doesn't want to make any contributions to the FSB IRA. I want to transfer that IRA into something that performs and need information on where to go and what to do? HELP!!


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I held back answering, wanting one of the experts to come along. But, with your first post, you ought to get a quick response. Here goes.

I think full service brokers are rarely or never worth what they charge customers. "Where are the customers' yachts?" indeed. So, as I see it, the sooner you get away from them, the better. Illustrative story: a dear friend of mine and I had IRA's of about the same value two years ago. Hers is with a FSB and today has the same value as then, although she has taken nothing out of it. My IRA is with Vanguard has made more than 50% in that two year period. In my experience, FSB's are incapable of putting the clients' interests ahead of their own.

When I quit working in 1993, I rolled all of my 401k funds over into an IRA at Vanguard, in their Index 500 Fund, VFINX. The investment there has tripled without any further deposits, just reinvested dividends. My experience does not necessarily amount to advice for you, but I'll say this much -- I plan to leave all these funds in VFINX for the forseeable future, except that I may start withdrawing the dividends (or about 2%) annually now that I'm 60.


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If you are satisfied with your current 401k u can rollover you FSB ira to your present 401K to consolidate your accounts. If not, put it in VFINX, vanguard 500 there is no sweat on this fund. If you want an individual stocks start with a discount brokerage.
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