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Deb19

Please Help With Move

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I am trying to move a traditional IRA from a high fee brokerage account to doing it on my own through ameritrade or something similar..... It contains 1 stock and 2 mutual funds. I have read things about ameritrade, etc. that scare me. A Mass. Mutual rep wants me to move it to a morningstar managed account. Please help as I am ready to do this just because I have been working on this for 2 weeks and just keep going around in circles. I have explored so many options I can't find my way out. I am fairly knowledgeable and currently do most investing on my own with success.....however I am stuck on this.....and feeling panic-stricken. I would appreciate any help you could give me.

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You're not confusing TD Ameritrade with the insurance company Ameriprise are you? I don't think there's anything to be scared about with TDA, it's a respected discount broker. I think I'd prefer to use either Vanguard or Fidelity, but that's just me. Where are your IRAs located? Hopefully at a low-cost provider, and it is convenient to have accounts in the same provider if possible.

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You can always find negative comments about a provider. Just like you can always find advice to sell it all and get out of the market! Unless you tell us what specifically you think might be a problem with TDA, nobody can say much. As long as you don't hook up with an advisor, I don't think TDA is going to take advantage of you. I've never used them. As long as you are a DIY investor, buying mutual funds (hopefully index!) and and maybe an occasional stock, they should leave you alone. Will they offer other expensive services? Probably. So will Fidelity and other vendors.

 

Remember, IRAs are portable! You can move them to other vendors repeatedly. It just involves filling out some forms and doing a trustee to trustee transfer. There's no tax consequences to selling the contents and buying something different! Such FREEDOM! You know that you will be doing a lot better leaving EJ if you move to TDA, Schwab, Fidelity, Vanguard, etc.!! Relax!

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Remember, IRAs are portable! You can move them to other vendors repeatedly. It just involves filling out some forms and doing a trustee to trustee transfer. There's no tax consequences to selling the contents and buying something different! Such FREEDOM! You know that you will be doing a lot better leaving EJ if you move to TDA, Schwab, Fidelity, Vanguard, etc.!! Relax!

Deb 19

 

This is all you really need to know. You don't have a problem but why are you getting advice from a Mass Mutual rep-yuck!!

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Deb 19

 

I admire the way you ask questions here instead of blindly making mistakes and finding out the hard way that you were given biased or inaccurate advice.

 

Tony

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Thanks, Tony...but trust me I have done the blind thing too.

 

Another question....cost basis concerns?? By transferring this IRA say to Vanguard.... do I need to be worried about my cost basis, especially since one is a stock? I am planning on at the very least selling one fund to buy a Vanguard fund. I know at E.J they may have helped keep track of this sort of thing. Is this on me now? If so....how do I do this. Thank you.

 

Deb

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Also....one reason I have lagged in getting this done is because I was angry that E.J. would charge me 135 bucks to close it. That is infuriating to me and at the time, all holdings were doing well/ok. It will take me over 3 years to recoop my $135 in annual fees I will be saving from no longer having to pay their annual maintenance fees. Still makes me ill.....but even with this fee, it still makes more sense in the long run....correct?

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There is no cost basis. Once you decide to cash it in before age 70.5 it will count as income. Don't dwell on the 150.00 ,thats small potatoes. Even Vanguard (I think) still charges an IRA maintenance fee on some accounts unless they have eliminated them. The bigger point is the fees you don't see that are cleverly hidden behind the scenes. With Vanguard your expense ratio will be very low and upfront.

 

I know some teachers that moan and groan about a 45 dollar once a year charge but don't realize they are paying over 2% a year in expense ratio. The 2% expense ratio is much more damaging.

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Deb19, you don't have to worry about cost basis in a tax-deferred account like an IRA, 403b etc. It doesn't matter if it's stocks, bonds, mutual funds or ETFs. Cost basis applies to taxable accounts only because you need it to figure out your capital gains (or losses?) when you sell something.

 

I agree with Tony on the EJ closing fee. You should just rip off the band-aid and move on. We've all had to pay for our financial education, often in the $1000s!

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