Finally did it!! I initiate the transfer of my IRA to Vanguard by sending in the paper work earlier this week.
The old busted…
I was in a SIMPLE IRA from my previous employment. It was great then, I was new to this and it got me started. I should have put more in, I wasn’t taking full advantage of the employer matching. While I am entirely thankful for the my employer for the program it wasn’t without its issues. In hindsight The choice of Waddell might not of been the best (this is from my point of view as I don’t know all the ins/outs of setting it up, may have looked good from that perspective). For starters we were limited to Waddell mutual funds. I won’t go into all the history or how most funds under perform the market, lets just leave it at not a whole lot of choices.
The next issues was that they were load funds, paying a commission up front, also the annual fees were quite high. This is one reason why they underperform, you have less money invested. Finally the big kicker to me, especially now that Im on my own, is they make it difficult in this day and age to add funds to my account. With the internet today they really need to improve here. I could set up automatic investments I guess but they don’t have any way to do this online so no way to control either. With no online set up I can’t make lump investments either, have to go to their office or mail in a form and check. How 20th century is that?
The new hotness…
So this week I talked to Vanguard and opened an account (online!), filled out the paperwork and mailed it in. Takes about 2-4 weeks I guess but that gives me time to determine what I will be investing in (part 2). One of the main reasons I went with Vanguard as opposed to an online broker like share builder (another I was considering) was the fees, or lack of 
As long as Im doing Vanguard funds their are no commission fees, so all my money goes to investing. Also the annual maintenance fees are the lowest out there, averaging .21% compared to waddell’s 1.7%+.
I will be setting up an automatic weekly or monthly transfer in but the cool thing is Vanguard while being one of the oldest funds out there has welcomed the 21st century, I can transfer money in online! I can make changes online! I am in total control which a control freak like me really enjoys.
Whats next
While I wait for my money to arrive into my account I will be looking at Vanguard index funds and deciding where I’m going to a lot my money. Im leaning towards this instead of the target retirement funds again because I want more control. I have a good idea of what I’m going to do based quite a bit on what I read in Ramit Sethi book, made a lot of sense and gonna try it out. More on that in a future post. After I get that set up then I will set up an automatic investment each week or month. Each quarter or annual I will see where I am at compared to the max investment allowed and any extra money I have and do some lump investments.
Oh that brings up another point. I was un able to roll it over to another SIMPLE IRA because apparently there is an OCT 1st deadline to do one this year so I just did a traditional IRA which has a max contribution of $5K a year. This is ok because when I was first looking at doing this thats what I was looking at and I see no problem making it out. If by chance I start making even more money and that 5K becomes to low I can then open a SIMPLE IRA with my business and have an additional $16.5k to work with.
How about you, where do you park your retirement money? are you paying to much in fees?
[...] out of my Waddell account and transferring to Vanguard which i discussed in t a previous post Rolling the IRA: Step 1. Now the money has arrived! It really was a quite painless process. Vanguard did all the work, I [...]