My husband has his money with Schwab; I have mine with Merrill Lynch; my brother says it’s dumb to pay their management fee. He manages his own money via Vanguard index funds. I feel too anxiety-prone to do that. I don’t have a lot to invest ($400k at last count). I plan on working forever (I’m 57 now; self-employed).
Anyone have a good solution or plan on how to invest pre-retirement?
Check how much you spend on fees, it DOES have a strong impact on lifetime savings.
In answer to your questions, the bulk of all our savings is split between Vanguard and Schwab. I still have my Fidelity 401K, but would move it to Schwab in a heartbeat if they charged fees.
We believe that indexed funds are the way to go, there is much less risk than buying stocks individually. you can still invest in socially responsible funds. Risk and fees are the drivers for us. Even after the big drop in 2008, our funds are up a lot.
You can plan on working forever, but you plan, gods laugh is a good mantra. Investing in long term insurance is also something to investigate.
Vanguard. It is all in various products there. Investment professionals in the family - all have their $$ at Vanguard.
We have money at Schwab and Fidelity with a bunch at Thrift Saving Plan as well. We moved out money from Dean Witter as we kept losing money tigers, even during roaring bull markets.
Schwab is good because they have a brick & mortar office. Fidelity is good because they have good customer service reps and allow you to execute a true durable power of attorney. They all have low fee broad index funds which is where we have stashed much of our $$.
@esobay --thanks – I am pretty sure their fee is 1% and I have been getting 5% yield (have to check). I take your point (about working forever). Thank you!
What kind of investments does your account contain? If it contains mutual funds, then 1% plus whatever expenses the mutual funds have seems quite high compared to those from low cost companies like Vanguard or those engaging in the current price war like Fidelity or Schwab.
Are you getting any good customized financial planning advice or investment strategy for the money you are paying?
I have to look but I believe I am 60% in stocks and the balance in bonds or money markets. I realize you are asking the right question (am I getting any good customized financial planning for the money I’m paying) but I want to pose the alternative question – what is the yield people are getting for investing on their own with no investment strategy? I asked my brother; he declined to answer. I would be fine with a no fee index fund as long as the return exceeds what I’m getting now.
We use Ayco for advising. Money primarily in Goldman-Sachs vehicles.
Vanguard (big fan of John Bogle) and Fidelity (former employer set it up and no inertia to move it to Vanguard).
I use American Century. 0.9% fee, with any fund fees rebated quarterly. The managed account fee is less than what I was paying in fund fees, and they handle diversifying for me.
We use Janney Montgomery Scott for most of our tax-free muni bonds - another good vehicle for retirement income.
@Classof2015 … a possibly different way of looking at your fees since 1% doesn’t seem like “much” … but for every $5 you are earning for your $100 invested then you are giving up a dollar or 20 % of that return) THAT seems like a big hit to me. Or was your 5% after fees?
I am still studying our ROI vs fees because yes the funds we have do have some management fees, all less that 1% though.
I have most of my retirement savings (multiple IRAs) and bulk of brokerage account at Schwab. Also use Schwab Bank, but have a bank account at B of A as well. I also have an investment account at Fidelity which I funded solely because I was uncomfortable having too much in one place. It’s all electronic blips, and if Schwab had a systems problem or a hacking event those blips could disappear (!) I just think it’s prudent to diversify a little bit.
Most everything in Vanguard. Example: Index 500 admiral shares has fees of 0.04%. For every dollar you are paying (1%)I have 96 cents more to invest.
H’s 403b is with a broker, 5% of our retirement $$.
Fees make a huge difference over time.
DH and I have everything at Schwab. Everything. Well, except for a little BofA account that we use for our ATM cash.
We’ve been with them since 1998. Because we have assets over a certain amount (I think it might be $500,000 but I’m not sure) we’re handled by their Private Client group. We pay about 1/2% of our assets per year for their investment management. So there is some purported incentive for them to manage us well, since if our investments go up, so do their fees.
We’ve been very happy.
This is a very timely thread! Thank you for starting it.
Most of our personal IRA and investment accounts are with Vanguard. We have a Thrift Savings Plan, and my husband has 28 years on active duty. We are hoping to make it another two years to mandatory retirement at 30 years / age 62. There will be a military pension.
I have an inherited Trust - investments and an IRA with Merrill Lynch. My portion has grown well but not spectacularly over the years, and has been handled by one particular financial advisor and now by his son since my parents originally set it up in the 1980’s.
Our present Merrill Lynch financial advisor just this week notified me that he has left Merrill Lynch and has moved to RBC. He would like to take my (pretty large but not not enormous) accounts with him. Meanwhile Merrill Lynch has assigned a new financial advisor to my accounts. I haven’t done anything yet. I haven’t even returned the phone calls from either financial advisor. My accounts have fees at ML, and would also have fees at RBC. I haven’t compared the fee structures yet.
Anyone know anything about RBC? In comparison to Merrill Lynch? I’d need some compelling reasons change the trust from one to the other financial institution.
Any advice?
Vanguard target retirement (2030!) for me and Fidelity for my husband.
We (a retired couple) have had almost all of our retirement accounts at Vanguard for a very long time.
As background. H is an investment guy and worked for Vanguard for roughly two decades until going with another employer. We still live in the suburban Philly area near Vanguard’s corporate offices and can meet with Vanguard advisors in person easily.
We knew Jack Bogle personally and thought highly of him – a real class guy. Vanguard’s sensible approach, with the low fees – what’s not to like?
H still has a 401-K from his last employer that we will eventually move to Vanguard – just haven’t gotten around to it yet. I prefer to keep things simple and mostly with one firm so we don’t risk losing track of anything as we age and might get befuddled.
Aside from that, we both have defined benefit pensions (mine not so big as I worked part-time many years) and, of course, Social Security. We keep a checking account and a money market fund at a local bank for convenience and for our bills and automatic deposits processing.
Simple and sensible works for us (so far!)
I agree with your brother about self management and favoring index funds. I have a variety of different investments. One of my largest has been in the Schwab S&P 500 index, which has only a 0.02% expense ratio and no transaction charge. I believe Fidelity has one with a slightly lower expense ratio. Vanguard has many great options as well, including their target retirement funds, which have expense ratios on the order of 0.12%
We’re a Fidelity family and one feature I do like is the brick and mortar branches where I can walk in if needed (very rare). Vanguard lacks that branch network unless you live near their headquarters. I’m sure I’d be just as easily pleased with Vanguard or Schwab, though.
My kids have accounts w/Fidelity as well. It makes it very easy to move money among accounts, especially when they were still in college for rent/food, etc.
“One of my largest has been in the Schwab S&P 500 index, which has only a 0.02% expense ratio and no transaction charge. I believe Fidelity has one with a slightly lower expense ratio.”
Yes, completely free. All these companies are racing to retain assets by lowing or dropping trading fees, expense ratios, etc. Good for us consumers.
Unless you want and need some form of hand holding, I’d recommend sticking to one of the big 3 “discount” brokers - Fidelity, Vanguard or Schwab. But, even then, they offer advisory/account management services as well at competitive rates. They all offer excellent service as well.