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I've got a secret.
I'm nervous handling my Roth IRA.
For the past year, the wife and I have had Roth IRAs with Ameriprise. We didn't start out with a lot of financial knowledge, and since we had just gotten married, we wanted to start out on the right track and save money.
One free lunch later, we met with some Ameriprise financial advisors, who helped us open Roth IRAs.
Yes, we purchased their RiverSource funds. Yes, we had some reservations — especially when they started to pitch us on insurance. And yes, the fact that they were sued concerning poor disclosure notices did weigh on our minds.
But we needed to get started … and we did.
One year later, I'm ready to move on to bigger and better things. With more financial knowledge under my belt, I'm ready to move into Vanguard index funds.
But for some reason … I just can't pull the trigger.
Is it nerves about managing my funds? Maybe. But I know that index funds are designed to be fairly hands off.
Is it nerves about leaving Ameriprise? Maybe. Despite the relatively shady practices, our guys did tell us about ING and, in general, seemed to provide solid financial advice.
Is it nerves about screwing up? Probably.
I (generally) know what I have to do: open two Roth IRAs with Vanguard, get our money out of Ameriprise, and get it into Vanguard. But what if something goes wrong? Are our retirement funds going to disappear somewhere in Internet limbo?
Part of me wants to do nothing — procrastinate and forget about it. But I know I shouldn't. The other part of me says to suck it up and make it happen.
Why is this so hard? Help!
[...] The most personal of the personal finance articles this week comes from Online Savings Blog. They are worried about moving their money to Vanguard. I'd suggest moving a small amount to start just to get comfortable with moving money online. Overall, I wouldn't be too worried. Billions of dollars move from financial institution to financial institution each day. I'd call up Vanguard and voice your concerns. I'm sure they'll walk you through the process. Also make sure you have all the documentation for your RiverSource funds. [...]
Why not start small? Transfer some and get used to it?
Vanguard is a huge company with billions in assets, they are at the top of the market with their inexpensive funds. I'd say you have very little to worry about.
I can understand being concerned about it disappearing though — no matter the size of your retirement account.
[...] Online Savings Blog: Why am I Worried About Mobing My Roth IRA to Vanguard? [...]
It's called procrastination, my friend. Fear not, may have fallen to this scurge of investing. I suggest the following strategy: just do it!
Regarding fearing the Internet, don't. It is perfectly safe. That is the only way I will make financial transactions anymore.
[...] The most personal of the personal finance posts is from Online Savings Blog, as they worry about transferring Roth IRAs to another company. [...]
[...] The 92nd Carnival of Personal Finance is hosted by Lazy Man and Money this week with a wonderful line-up of articles. Some really interesting stuff includes ProBargainHunter's look at what's hot on eBay through the new eBay Pop! tool for trending the most popular items. Great idea… and wouldn't it be interesting to trend the price averages from month-to-month and year over year? I know… lets call it the EPI for "eBay Price Index"… then we can analyze and trend eBay inflation data…. well, they probably do that already somewhere. Hey, maybe I can coin that term for posterity… has it been done yet? I'm also a believer in long-term investing to which Fire Finance's article on Investing- The Mistake of Timing the Market really drove the point home. I enjoyed BluntMoney's look at budgeting, or rather a Confession on not budgeting! I wonder how many people really, truly use a budget? For many it's just a reference point… something to aim for. Like Blunt Money, I use software and tracking tools primarily. It's a budget per se, but realistically I operate from a thorough knowledge of where I am at all times. I may start a more accoutable budget this year to see if it makes a difference on the savings end. It was interesting to read that Online Savings Blog is concerned about moving their IRA's to Vanguard. Moving money and retirement accounts around can be intimidating, but I have to say Vanguard is the one place I've been most satisfied with over the years. I think you'll really be happy after you've completed the transfer. I've moved and modified many accounts on Vanguard without a hitch, and it has always been flexible, reliable and staffed with helpful people. Believe it or not though- I did catch an omission on Vanguard's part one month a couple years ago. They somehow forgot a monthly dividend reinvestment on one fund… I looked and looked, and finally called them. They researched it within a day and said, "You're right!" and corrected it asap. So I check my accounts at least every quarter to make sure any dividends and reinvestments are credited properly. Shows that you can't, or shouldn't, simply leave your finances on auto-pilot even with the best of companies… it's your money, make sure it's doing what it's supposed to! But with Vanguard's low cost structure and helpful staff, I wouldn't be anywhere else. Finally, a shameless plug for Sushi Money's article Get Ready to Sell That Home. If you're a prospective home-seller, do everything you can to stand out from the rest! [...]
Thanks for posting your thoughts on this… you are far ahead of most in that you are thinking about the details. Personally, I think you'll really be happy once you've completed the transfer. Vanguard has always been great to me, and the flexibility you'll have once you are there is terrific. Good luck!
Kevin - I'm trying to get rid of Ameriprise completely, so I'm going to transfer both my wife and my Roth IRAs in full to Vanguard.
Shadox - You're right, it should just be done. And I just started the process this weekend. Thanks for the encouragement!
Junger,
I just went through the same thing: I transferred 4 accounts from Ameriprise to Fidelity, an IRA and roth for both myself and my wife. My guy at ameriprise is pretty nice, but nice does not make up for poor fund performance. It did take a little while to transfer over, because the riversource funds would not directly transfer, so I had to cash out to a money market account first. I transferred my two accounts first, and once they went through, I felt a little more comfortable about transferring my wife's accounts. It did take a while, but everything went smoothly, just a little slowly. I was procrastinating for a few months, but I'm glad I did it. My advice is to just do it and get it over with. You'll feel a lot better about getting it done and have one less thing to worry about. As long as you keep records of your accounts, you should be fine. Good Luck!
Jason - nice to hear from someone in a similar situation. Would you say that there was any feet-dragging on the part of Ameriprise to transfer, or was it solely a fund issue?
Junger,
The fact that it took so long makes me suspect that a physical check was mailed from Ameriprise to Fidelity, rather than transferring electronically, but I'm not sure. There is a Fidelity office where I live, so was able to handle everything easily on that end, and I was able to check online to find out the status of the transfer. The longest part was "awaiting receipt of funds" which took almost two weeks. When you do your transfer, don't be worried if it takes a while. I'm looking forward to seeing how it goes.
You're doing the right thing by taking action. If Ameriprise is not the best solution for your financial future, then make the switch. Don't be afraid of switching; be afraid of retaining an account that doesn't be suit you.
As other readers have mentioned, Vanguard is excellent, and one of the best fund family in the world. As long as your roth IRA account is in their hands, you probably don't have much to worry about. I'm in Fidelity, and still have dreams of Vanguard.
Best of Luck!