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Northwest Mutual IRA Advice

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  • Avatar neuroresident92 
    Participant
    Status: Resident
    Posts: 3
    Joined: 06/07/2019

    I’m about to begin my residency within the next month. I have term life insurance and long-term disability set up with Northwest Mutual, which I am satisfied with as far as rates and policy wording (I’ve read the warning about Northwest Mutual disability insurance but am not too concerned about it, as I will be a neurologist). The main question I have is about a Roth IRA that I recently set up with Northwest Mutual. At the time of setting it up, I wasn’t aware how high their fees were compared to Vanguard. There is currently $300 in the Roth IRA with NWM, and if transferred to a Vanguard IRA I believe the total fee would be $95. Would you guys recommend continuing with the Roth IRA at NWM or transferring that money to a Vanguard IRA?

    #219859 Reply
    Avatar artemis 
    Participant
    Status: Physician
    Posts: 568
    Joined: 12/02/2016

    I’d transfer it to a lower-cost provider now, while the balance is still small.  Why draw out the pain?  Get it over with now!

    #219863 Reply
    Andrew Musbach Andrew Musbach 
    Participant
    Status: Financial Advisor, Small Business Owner
    Posts: 35
    Joined: 10/19/2017

    The one time transfer fee is annoying, but you’re also likely being charged a management fee, and have more expensive investment funds, that will cost you more over time than the $95 transfer fee. If the only ongoing reason you are using the NWM advisor is simply to have a Roth IRA account they are investing for you, then it’s worth moving to Vanguard to avoid paying more fees. If you understand the investments you are in, fees you are currently paying, and are still comfortable with the advisor/value that you’re getting, then don’t feel like you have to make a switch. I would guess that once you look at the fees/investment expenses relative to the value that you’re getting, you’ll want to move to Vanguard though.

    Andrew Musbach, CFP® | [email protected]
    MD Wealth Management, LLC | http://www.mdwmllc.com

    #219870 Reply
    Avatar Michael Scarn 
    Participant
    Status: Physician
    Posts: 21
    Joined: 12/09/2018

    Since I assume most of this is contribution rather than gains, can you just pull all the contributions out and then deposit into a new Roth with Vanguard? Then just close the northwestern mutual account? Someone who knows more about this please jump in. Just a thought.

    #219873 Reply
    Vagabond MD Vagabond MD 
    Participant
    Status: Physician
    Posts: 3418
    Joined: 01/21/2016

    Pay the $95 or whatever (who are you paying it to?) and consider this a very inexpensive lesson in your financial life. Most of us have made much, much costlier mistakes.

    "Wealth is the slave of the wise man and the master of the fool.” -Seneca the Younger

    #219876 Reply
    Avatar Peds 
    Participant
    Status: Physician
    Posts: 4198
    Joined: 01/08/2016
    Would you guys recommend continuing with the Roth IRA at NWM or transferring that money to a Vanguard IRA?

    Click to expand…

    no get out.

    lesson learned.

    #219885 Reply
    SerrateAndDominate SerrateAndDominate 
    Participant
    Status: Physician
    Posts: 463
    Joined: 02/01/2018
    alpha investing

    I know you’re just looking for IRA advice, but did you see if your residency has any discounts for individual disability policies? And did this insurance agent cold call you or get your number from a classmate? It’s perfectly fine to be ok with their language, but you may be able to get better language at a cheaper or same price.

    Earn everything.

    #219897 Reply
    Faithful Steward Faithful Steward 
    Participant
    Status: Financial Advisor, Small Business Owner
    Posts: 480
    Joined: 06/12/2017

    Transfer. The $95 fee is one-time. The much higher fund expenses are forever!

    Michael Peterson, CFP® | Faithful Steward Wealth Advisors
    https://ProsperousPhysician.com | (717) 496-0900

    #219900 Reply
    Liked by Vagabond MD, Peds
    Avatar afan 
    Participant
    Status: Physician
    Posts: 79
    Joined: 05/07/2017

    I have to ask

    How much term insurance do you have and how much do you need?

    #220198 Reply
    Avatar neuroresident92 
    Participant
    Status: Resident
    Posts: 3
    Joined: 06/07/2019

    From what I understand right now it’d be $95 to Northwestern Mutual to close the account.

    #220442 Reply
    Avatar neuroresident92 
    Participant
    Status: Resident
    Posts: 3
    Joined: 06/07/2019

    I know you’re just looking for IRA advice, but did you see if your residency has any discounts for individual disability policies? And did this insurance agent cold call you or get your number from a classmate? It’s perfectly fine to be ok with their language, but you may be able to get better language at a cheaper or same price.

    Click to expand…

    I knew this insurance agent since he has worked with my parents for most of their lives. They actually gave a decent discount based on the residency program I was associated with, and it was a good price compared to a few other options I looked at.

    #220443 Reply
    Vagabond MD Vagabond MD 
    Participant
    Status: Physician
    Posts: 3418
    Joined: 01/21/2016

    Right or wrong (mostly right), my loathing and distrust of Northwestern Mutual is so strong, that I was just on FB looking at the wedding photos of a doc friend/acquaintance’s daughter, clicked on his new son-in-law’s name, and it turns out he works for NWML. My gut reaction was, “Dude, how can you let your daughter marry into that?”

    "Wealth is the slave of the wise man and the master of the fool.” -Seneca the Younger

    #220599 Reply

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