Wow, my first post. Ive had an IRA for 25 years and I've had it managed by at least 5 different broker/financial planners. It is currently in mutual funds. Seems like I'm swimming against the tide lately. I think the aggregate of all the fees and internal costs blah blah blah are somewhere around 2.15%. Is this acceptable? I feel like I should know more about my retirement account but I've spent the last 30 years trying to make my business go and left this detail up to the experts. Probably hurt myself?
Most discount brokers won't charge you a fee for holding your IRA, especially if the amount in it is over $10000 or so. The "full service" brokers will--plus they will charge a lot more when you make a switch.The fees charged by the mutual funds also vary a lot. The lowest in Vanguard, but Fidelity and T. Rowe Price are two others with low fees.You don't say who is the custodian of your IRA, but one of the above three would be a good choice. You could easily move your IRA to one of them--probably the current custodian will charge you $50 or so to close the account. You can talk to your new custodian about whether you can transfer the mutual funds you now own to them or whether you would need to sell them and then get different funds from the new custodian. Best wishes, Chris
Costs of 2.15% sounds high to me, but, it may depend on what all goes into that percentage and whether you are receiving a benefit from the "experts" that are collecting the fees you are paying. As a goal I suggest you look at low cost mutual funds and an account that doesn't charge a maintenance fee. Since I invest in index funds my fund expenses are about 0.2%. None of my accounts charge a maintenance fee.
2.15% sounds high to me as well. A fee that high would only be justifiable if the funds were consistently outperforming their benchmark index (ex. is a large cap value fund consistently beating the S&P 500 index).I'd try comparing your various funds to their benchmarks and see how they stack up. If they're not at least matching their benchmarks over time without fees you'd likely be better off just investing in index funds or ETF's.Mike
Basically I'm not out performing anything. I appreciate everyone's feedback on this since I always have to view a response from my financial advisers as having to be at least a little bit self serving. I don't know maybe I'm being too cynical. Thanks again.
2% in TOTAL fees may actually be cheap. A typical managed account fee would be between 1 and 1.5%. Toss in the fees on the funds (.5 - 1.5) and you could easily be over 3% in total.Personally I would need to know more about what you have to be able to form an opinion on whether you are getting what you pay for. You may not need active management at all or you might be getting a good deal of service for your holdings. No way to say simply based on the fee.
It might help if we knew exactly what the 2%+ fees are that you are talking about.There are a number of costs that might be involved such as:Commissions and transaction fees that might be charged with any purchase or sale.Expense ratios associated with mutual funds.Account maintenance fees charged by the institution holding the account.A wrap fee which is usually a percentage of the assets under management.And probably some others that I've left out.
That's what I'm talking about. There are 20 some funds in my IRA. Sounds like my adviser needs to advise me. I don't think I have time or enough inside info to come up with the true figure. Thanks.
There are 20 some funds in my IRA. (I wonder whether the broker churns them a lot ... I wonder whether they have loads ....)Sounds like a lot of funds to me. You could probably do as well with a much lower number of funds in Vanguard, maybe even just one fund: a target date fund.culcha
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