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moving to Vanguard…looking for advice

Home Retirement Accounts moving to Vanguard…looking for advice

  • Avatar ChrisH 
    Participant
    Status: Physician
    Posts: 2
    Joined: 01/09/2019

    Just looking for a little input from others about making the move to Vanguard (or just starting fresh with them).  My wife and I met with a Fee-only FA over the summer for a little guidance in finances.  Our goals are pretty simple – pay off loans ASAP (we have about 3-4yrs left) and during that time we will max out 401k and do a backdoor roth for my wife and I and keep a 3-4month emergency fund.  The FA was a proponent of using Folio Investing so I started and funded an both IRAs there with the allocations being spread between BIL, S&P 500, VEA and Vanguard total bond market.   After browsing this forum, the facebook group and reading a couple books (Simple path to wealth and half way through Bogleheads guide) I plan on changing to Vanguard for my backdoor Roths and rolling over my 401k to a Roth IRA.  My plan is to keep it very simple and use VSTAX as there is not a whole lot of money in there yet and it just makes sense from what I read and see others doing to keep it pretty aggressive.

    would most of you guys be in agreement??  and also,  the process of starting/transferring everything to Vanguard seems very easy…did everyone find that to be the case?

    #179898 Reply
    Avatar Bmac 
    Participant
    Status: Physician
    Posts: 289
    Joined: 10/21/2017

    1. Moving to Vanguard should not be too difficult. Initiating any transfer via Vanguard will be the best route (rather than initiating the transfer from the current account custodian)

    2. Consider an aggressive target date fund or such (rather than VSTAX) in the Roth just so as not to complicate any potential future tax-loss harvesting in a taxable account.

    3. Back door Roth for both you and your spouse is a great idea.

    4. Is your current 401k a Roth 401k? Is it with a current employer? How much is in it? These questions impact whether or not you should consider rolling it over to a Roth IRA.

     

    Just some initial thoughts.

    #179907 Reply
    Avatar ChrisH 
    Participant
    Status: Physician
    Posts: 2
    Joined: 01/09/2019

    Thanks so for the insight!  my 401k is just a regular 401k with fidelity with a balance of about $7800 in it.

    #179908 Reply
    Avatar Bmac 
    Participant
    Status: Physician
    Posts: 289
    Joined: 10/21/2017

    Is this an individual 401k or through your current or a former employer as a W-2 employee? If it is with your current employer you can’t move it. Just keep maxing every year with pretax contributions. If it is with a former employer you could either rollover to a TIRA at Vanguard and then convert to a Roth (taxes will be due as contributions and gains all pretax) or transfer it to the 401k at your current employer (if that plan is good) or just leave as is at Fidelity. The second two options would not be taxed (now). I don’t know the rules for an individual 401k, but presumably it could be transferred to a similar vehicle at Vanguard.

    #180042 Reply

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