I'm currently weighing a shift from Betterment to Vanguard Target Fund for my Roth IRA. I was wondering if anyone has made a switch from Betterment to Vanguard and what there thoughts were.
My retirement strategy is a combination of three things.
1. Pension: I have a pension plan that I'm 14 years away from qualifying for. There is a caveat. I can't collect the pension until I'm 59.5. But I would have the option in 14 years of retiring early and knowing that money is coming down the road. I don't think I want to retire in 14 years. But it would be nice to have the option.
2. Dividend Growth Investing: Just knowing my personality, I will find more money to save with this style of investing. I like the control that comes with it, and the research behind it. I also like the predictability that comes with it. That you can produce a certain income while keeping a principle of stable blue chip companies that should appreciate over time.
3. Low Cost Index Funds: At my core I'm an educator and not a finance expert. I've learned a lot. But a year of being a dividend growth investor doesn't make me an expert. On my budget I also know that I'm not going to achieve the level of diversification investing in individual stocks that I can by putting a good junk of my money in index funds. (I also have a good chunk of change trapped in a Roth IRA from back when I was young and dumb).
Right now I'm weighing option No. 3. I currently have my Roth IRA and a portion of my house savings in a Betterment account. Both accounts have been performing well. The original plan was to wait until I had 10k in the Roth IRA and switch into a Vanguard Admiral fund. Right now I'm not paying a lot to Betterment. It's only .25% in account fees. The combination of the house fund and the Roth is over 10k. But the Roth is less than 10k. My question is would I be better off not paying the management fee and moving my IRA to a Vanguard Target Fund? It would also allow me to take advantage of Tax Loss Harvesting in my Betterment house fund. It doesn't seem like I'm paying very much at all to Betterment. But my thoughts are why pay any fees that aren't necessary.
Please share your thoughts? Should I make the move now. Or wait until I have more saved and move into an admiral fund.
Sunday, July 9, 2017
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