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I Moved Money Out Of Vanguard

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Dan

 

You sound guilt ridden that you moved some money out of Vanguard. Its alright. You know what your doing and so does your friend Scott. Its more concerning when folks who don't know what they are doing are talked into making poor decisions like moving money out of vanguard and into terrible loaded or high fee choices. I've known it to happen.

 

I was surprised that you had to call Vanguard so much and wait so long for your money transfers. Perhaps its a sign of how big they have gotten. I worry sometimes that their growth may change them.

 

Enjoyed reading your post and yes your title to your post/essay caught my attention.

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Dan and Tony,

I had no trouble at all moving a couple hundred thousand from my Vanguard Total Bond Market index to TIAA traditional annuity a year ago. Vanguard and my rep were very professional and understood what I was doing and they apologized that Vanguard did not have some type of guaranteed, 100% liquid account that paid 3.0%.

 

Just to be very clear--TIAA annuities are great products and should NEVER EVER be compared to annuities sold by all of the other insurance companies. Even their annuities that take 7 years to withdraw your money are great products paying 4.25%. I would have put it into that 7-year frozen fund but it was not on my former employer's plan, so I could not use it. TIAA annuities are more like mutual funds, no commissions charged, complete liquidity (except those higher interest rate products), and no surrender charges. I absolutely love TIAA!

 

I wanted to lower my bond risk by having a guaranteed 3.0% return with absolutely no costs except the spread.

Part of the seamlessly probably had to do with my old 403(b) account from LAUSD which TIAA still had in my name, even though I had no money as I rolled it all over to VG when I retired in 2008.

 

I am so lucky I have my money in two of the greatest companies ever created for us. Andrew Carnegie is not such a bad guy after all when he created TIAA a century ago next year.

 

Steve

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I wanted to lower my bond risk by having a guaranteed 3.0% return

 

Hard to beat that 3% guaranteed. You got me thinking of copying your move. Did not know Andrew Carnegie started TIAA.

 

Steve, its awful what those wildfires did in California. I really feel bad for all those folks there that lost their property and lives. This has not been a great time. Puerto Rico, Florida, Los Vegas, and CA are going through some tough times. Its very sad. We should all be grateful and count our blessings. Life can change in an instant.

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I wanted to lower my bond risk by having a guaranteed 3.0% return

 

Hard to beat that 3% guaranteed. You got me thinking of copying your move. Did not know Andrew Carnegie started TIAA.

 

Steve, its awful what those wildfires did in California. I really feel bad for all those folks there that lost their property and lives. This has not been a great time. Puerto Rico, Florida, Los Vegas, and CA are going through some tough times. Its very sad. We should all be grateful and count our blessings. Life can change in an instant.

 

 

I live next to the biggest earthquake fault in the world, and it could cause a massive quake where I live. I think about the suffering of all those people, as you said. Makes me sad too, and grateful.

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Tony,

 

It's true. I did feel guilty. It was like breaking up with a long time partner. Yet the breakup isn't total. Basically my fixed assets are with TIAA and my equities are with Vanguard and Fidelity. For my wife, it's also equities in Vanguard and Fidelity. It seems very similar to what Steve is doing.

 

To Vanguard's credit they did tweet the following below. As you point out, I probably slipped through the cracks because of their tremendous growth.

 

Replying to @teachretirerich @meridianwealth and 8 others

We're sorry for any inconvenience, Dan. We appreciate you taking the time to give this feedback & have shared it with the appropriate team.

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FWIW, I'm doing the same thing, though I no longer have access to the TIAA version--I've got the largest part of my bond allocation in the VOYA stable value fund offered by Calstrs Pension2. Scott D has said he thinks this is a good product. Currently pays 3.25% minus a .25% fee; that's about to drop by another .25%. But it is also liquid, so if it starts looking unattractive, I can transfer the money to Vanguard.

 

Vanguard is great and I recommend it to everyone, but I think we should avoid becoming Vanguard cultists. It is possible that good, or even superior, offerings can appear elsewhere--though there is so much deceptive marketing in the financial services field that one is easily misled--and it is also good to keep a critical eye on Vanguard; there may be things they should do better (the fact that they are charging three times as much as Fidelity to maintain 403b accounts is an example).

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I think we should avoid becoming Vanguard cultists.

 

I agree 100%, but I will reserve some space for Vanguard loyalty that some may think is unwarranted.

 

If another company offered a superior product then I'd be forced to abandon Vanguard because superior products are how Vanguard won my support in the first place. However, until that happens I will vote with my dollars and support the only company to take an ethical stand on behalf of investors. Fidelity and Vanguard both offer fantastic total market index funds, but given the choice, I don't need a nanosecond to know that I'm going to use Vanguard and I'd encourage others to do the same. I'd even be (happily) willing to put up with some rough edges if need be (slower customer service, less fancy website, etc).

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