Setting up an IRA

[Superfan97]

I have 2 different 401k accounts, managed by my current and prior employer company providers, but am looking at opening up a separate IRA. I've managed all my retirement savings for the last 15 years through the 401ks, so IRAs are new to me, and not only do I not understand the mechanics very well, I'm not even sure I know what questions to ask/how to evaluate the pros and cons of my options.

One thing I do know is that I want to control it myself-- don't want it tied to a particular agent, whom I have to call if I want to move money around or change the details, and of course want the lowest fees I can get.

A cursory google says look at something with the likes of Vanguard, Fidelity, or T Rowe Price. I already have one of the company 401k managed by one of those companies, but this begs the question: better to have all the eggs in one servicer's basket, or to diversify not just among tax instruments but also among providers?

Anybody got any advice for a newbie on either
a) what I should do, or
b) what questions I should be asking going into this little venture?

 

[Nolester87]

Check out Clark Howard's site. He has some pretty good info on the subject.



Clark Howard

 

[ncnole1975]

I see no reason to diversify by provider. Especially if you will be controlling the funds and asset allocations.
Posted from Rivals Mobile

 

[seminole4life1]

Fidelity or Vanguard will pretty much check all the boxes you require. Shop the different funds to determine which would have lower expense fees for what you are interested in. I personally use use Vanguard and their Admiral shares. I know there is a minimum balance to get the admiral shares (really really low expense ratio) if you aren't hitting that point yet look into Schwab also.

IRA is really not that much different than a 401k regarding mechanics you just generally have more fund options.

Check income limits, I don't get any tax break for traditional IRA and just am under the income cap that still allows me to use Roth IRA so my $5,500 a year goes in my Roth. I have a traditional from back when I made very little and consider it two sides of the tax strategy.

My advice, call Vanguard (or Fidelity or Schwab) and ask them all the "stupid" questions you have that really aren't stupid questions. They will help you out and then dig around on the three websites, you really can't go wrong with any of those three and finding the right one for you is all relative but in reality they will all do what you need.

 

[SKSnole]

401k or IRA - I would avoid target date funds. Their fees are typically absurd.

 

[More Kirk Less Spock]

Target date funds assume that everyone with that target date has the same risk tolerance.

 

[Thebear612]

Open an etrade or schawb IRA....you can fill out the forms in minutes. You must transfer the 401k to the IRA...do not take position of the 401k assets by selling them.... the forms will have info on where the 401ks are and you can fill out the info to transfer the account from the 401k into the IRA. However, you may want to read up on combining them. I would suggest keeping them separate for now...gives you flexibility in the future...you can read up on it if need be.

 

[nole71911]

Originally posted by ncnole1975:
I see no reason to diversify by provider. Especially if you will be controlling the funds and asset allocations.

Posted from Rivals Mobile

^^^^^^^^^^^See Above^^^^^^^^^^^^^^^^^^

If you still have access to a 401K I would role everything into that. If you do not like your 401K options, then a IRA makes sense. You could also seriously consider paying the taxes and roling that 401K money into a Roth IRA if you think your taxes today will be substantially lower today than in the future.