No. of Recommendations: 1
Thanks everyone for your responses and advice. I have opened a new account at Fidelity. The next question is what to move the funds into.

The existing account is spread across multiple funds that are high dividend & income funds.

I'm going to speak to an advisor at Fidelity - but open to my Fools Community suggestions!

Thx again!


The main thing is to check the ER fees for each fund that they are currently in. If they are above .5%, I would personally sell them all and convert them to lower-cost funds at Fidelity or the iShares ETF's since they are both commission free and have low ER fees. Obviously, the inherited funds should ideally fit in or match your overall portfolio strategy. However, since they are IRA BDA, you are required to take the RMD's for this stretch IRA and the longevity of your inheritance isn't going to last too long. If selling and reinvesting to lower cost funds/ETF's or even stocks, probably best to leave the 2017 RMD in the money market fund as you are going to have to withdraw that soon anyway. The rest could be deployed to meet your desire/needs with this IRA.

We inherited two IRA's in the past 20 months from our parents, and I immediately adjusted things to low cost funds, ETF's, and a mix of growth stocks, and stocks paying dividends in an effort to match our overall investment portfolio and to make them "stretch" as far as possible. One of the inherited IRA's was filled with high ER funds with a back end load that had to be paid to sell the shares. So I had to bite my lip and "just do it" to convert it to better, lower cost investments. My parents got fleeced on those, but I figured I owed it to them and to myself to turn it around. Thanks to the strong bull market last year and this year, I've managed to turn it around and make up about 5 years of RMD's in lower cost investment choices.

The other IRA was totally filled with individual stocks, so I adjusted the holdings to meet our needs and throw off enough dividends to cover the RMD. You have to remove all emotional attachment to your parents and how/why they ended up in the funds/stocks for their needs, or at the guidance of the financial planner that put them there. You have to decide what is best for you, and not worry about any attachment to what they were invested in.

Beware of speaking with the Fidelity rep. They will simply try to "sell" you funds that have higher expense ratios. Been there, done that. We are Fidelity customers and have a rep assigned to us, but I ignore all of his suggestions as they all carry high ER fees. I'm a Boglehead (Vanguard Funds and ETF's) when it comes to index fund investing.

At Fidelity, to keep costs low, I would suggest just using a 3 fund approach with commission free Fidelity, low cost funds - or the commission free Blackrock iShares:

Fidelity Total Market Index Fund Investor Class (FSTMX) or Premium Class (FSTVX)
Fidelity Total International Index Fund Investor Class (FTIGX) or Premium Class (FTIPX)
Fidelity U. S. Bond Index Fund Investor Class (FBIDX) or Premium Class (FSITX)

iShares Core S&P Total Market ETF (ITOT)
iShares Core MSCI Total International Stock ETF (IXUS)
iShares Core Total U.S. Bond Market ETF (AGG)

You could adjust your asset allocation based on your needs - be it 70/30, or 60/40 stocks/bond with these three funds, or put 1/3 in each, or 50/50. That's up to your risk tolerance.

Just be aware that whether you have gains or losses in a year, the RMD must take place. So whatever investments are in there are going to be shorter lived.
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No. of Recommendations: 0
You should be able to move this account to any broker or mutual fund company you like. I would suggest Vanguard or Fidelity. I am most familiar with Vanguard and I believe you should be able to have an account with them with no annual fees. The administrator of the account is very important, but so is how the money is invested.
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No. of Recommendations: 1
1) The fees seem high to me since I'm used to paying about $15/annual for my Motley Fools Fund.

No argument. They seem high to me, too.

2) Can I roll this over into another account or move it to another firm?

Just about any firm that handles IRAs will be delighted to help you roll this to them. You may (probably will) have to pay an account closing fee to the current custodian. You may have to supply a copy of the death certificate to the new custodian. It's likely cleaner to do the transfer after you take your RMD for the current year. Talk to whoever you decide on as the new custodian about this before you pull the trigger.

I rolled an inherited IRA from a local firm based where Dad had lived to Fidelity. The actual custodian-to-custodian transfer wasn't any big deal. Fidelity is happy to treat me right, but that is likely based on the level of assets I have with them across all accounts. The inherited IRA is minor, about $22K, and I doubt that I'd receive the same level of service if that were all I had with them.

Patzer
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No. of Recommendations: 2
Open the account at the new broker and have them “collect” the funds from the old broker. If you withdraw the money yourself and deposit it in the new account, you’ll lose the IRA designation and have to pay income tax on the entire amount in the year that you make the withdrawal.

Trini
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No. of Recommendations: 0
Just confirming what the others have posted. Fees are high.

I inherited my Dad's IRA that was with Franklin ($25K) and moved it to Fidelity where my other investments were. I did not even have to sell the investment - Fidelity could move it. I did have to open a separate Inherited IRA account though.

Fidelity made it quite easy to do. I am sure Vanguard could as well.

Good Luck.
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I inherited my Dad's IRA that was with Franklin ($25K) and moved it to Fidelity where my other investments were. I did not even have to sell the investment - Fidelity could move it. I did have to open a separate Inherited IRA account though.

Fidelity made it quite easy to do. I am sure Vanguard could as well.


Yup moved mom's to TDAmeritrade. Easy to do. They all are well versed in making it happen. Might even get a small bonus for moving to some brokers.

Teri
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Thanks everyone for your responses and advice. I have opened a new account at Fidelity. The next question is what to move the funds into.

The existing account is spread across multiple funds that are high dividend & income funds.

I'm going to speak to an advisor at Fidelity - but open to my Fools Community suggestions!

Thx again!
Print the post Back To Top
No. of Recommendations: 1
Thanks everyone for your responses and advice. I have opened a new account at Fidelity. The next question is what to move the funds into.

The existing account is spread across multiple funds that are high dividend & income funds.

I'm going to speak to an advisor at Fidelity - but open to my Fools Community suggestions!

Thx again!


The main thing is to check the ER fees for each fund that they are currently in. If they are above .5%, I would personally sell them all and convert them to lower-cost funds at Fidelity or the iShares ETF's since they are both commission free and have low ER fees. Obviously, the inherited funds should ideally fit in or match your overall portfolio strategy. However, since they are IRA BDA, you are required to take the RMD's for this stretch IRA and the longevity of your inheritance isn't going to last too long. If selling and reinvesting to lower cost funds/ETF's or even stocks, probably best to leave the 2017 RMD in the money market fund as you are going to have to withdraw that soon anyway. The rest could be deployed to meet your desire/needs with this IRA.

We inherited two IRA's in the past 20 months from our parents, and I immediately adjusted things to low cost funds, ETF's, and a mix of growth stocks, and stocks paying dividends in an effort to match our overall investment portfolio and to make them "stretch" as far as possible. One of the inherited IRA's was filled with high ER funds with a back end load that had to be paid to sell the shares. So I had to bite my lip and "just do it" to convert it to better, lower cost investments. My parents got fleeced on those, but I figured I owed it to them and to myself to turn it around. Thanks to the strong bull market last year and this year, I've managed to turn it around and make up about 5 years of RMD's in lower cost investment choices.

The other IRA was totally filled with individual stocks, so I adjusted the holdings to meet our needs and throw off enough dividends to cover the RMD. You have to remove all emotional attachment to your parents and how/why they ended up in the funds/stocks for their needs, or at the guidance of the financial planner that put them there. You have to decide what is best for you, and not worry about any attachment to what they were invested in.

Beware of speaking with the Fidelity rep. They will simply try to "sell" you funds that have higher expense ratios. Been there, done that. We are Fidelity customers and have a rep assigned to us, but I ignore all of his suggestions as they all carry high ER fees. I'm a Boglehead (Vanguard Funds and ETF's) when it comes to index fund investing.

At Fidelity, to keep costs low, I would suggest just using a 3 fund approach with commission free Fidelity, low cost funds - or the commission free Blackrock iShares:

Fidelity Total Market Index Fund Investor Class (FSTMX) or Premium Class (FSTVX)
Fidelity Total International Index Fund Investor Class (FTIGX) or Premium Class (FTIPX)
Fidelity U. S. Bond Index Fund Investor Class (FBIDX) or Premium Class (FSITX)

iShares Core S&P Total Market ETF (ITOT)
iShares Core MSCI Total International Stock ETF (IXUS)
iShares Core Total U.S. Bond Market ETF (AGG)

You could adjust your asset allocation based on your needs - be it 70/30, or 60/40 stocks/bond with these three funds, or put 1/3 in each, or 50/50. That's up to your risk tolerance.

Just be aware that whether you have gains or losses in a year, the RMD must take place. So whatever investments are in there are going to be shorter lived.
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