* All fund accounts with a balance of less than $10,000 will be assessed a yearly fee of $20.
Now that’s straightforward. In the old configuration, my recently-opened 2006 SEP IRA would have been charged $20 anyway. So why am I so happy with this change?
Because there are several ways the new $20 fee can be avoided completely by
* keeping each fund account balance over $10,000;
* maintaining total assets at Vanguard at $100,000 or more; or,
* signing up for electronic delivery of all documents, like prospectuses and statements.
With my assets at Vanguard totaling up to only about $3,000, it’s pretty clear which option was my choice.
I have a Roth IRA and another SEP IRA at TIAA-Cref. The problems I’ve had with this organization, while they have settled down except for a request from their lawyers to remove their logo from this page, are well documented. Most importantly, the mutual funds at Vanguard that match up with the mutual funds at TIAA-Cref have lower expense ratios.
The two funds currently invested in my Roth IRA at TIAA-Cref can theoretically be transferred to Vanguard because the balances are each above the $3,000 threshold. My 2005 SEP IRA isn’t above that level, but I may be able to combine it with my 2006 SEP IRA, already at Vanguard, if I don’t mind changing my asset allocation. The 2005 SEP IRA is invested in an international index fund, and the 2006 SEP IRA is invested in the total stock market index fund.
I’d rather have all of my accounts at Vanguard, so I’ll be looking to make this transfer in the next few weeks.
Updated February 6, 2012 and originally published April 27, 2007. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.