Vanguard IRA Review 2017
Vanguard IRAs: Traditional IRA, Roth IRA, SEPs, SIMPLEs & i401(k) IRAs.
Fees, commissions, investment options. Advantages and disadvantages of opening IRA at Vanguard.
- Stocks & ETFs: $7 for the first 25 trades, $20 for subsequent trades for accounts with < $50,000
- Options: Standart Service $20 + $1 per contract, Voyager Services $7 +
$1 per contract, Voyager Select, Flagship, and Flagship Select Services $2 + $1 per contract
- Mutual Funds: Standard - $35 Voyager® and Voyager Select® - $20 Flagship - $8 Vanguard Mutual Funds - Free
Minimum to open: $1,000 for a cash account.
Open an account: Open an account with Vanguard.
Vanguard IRAs Review: Types of Individual Retirement Accounts
I opened my first IRA in 2002 with Vanguard. After contributing for a few years I let my account sit idle because I was eligible for my employer’s 401(k),
which had both an employer match and higher contribution limits, plus a tax benefit in every paycheck instead of having to wait until the end of the year.
I later moved to a new job, and in 2010 my new employer decided to terminate their 401(k) plan. Suddenly Vanguard was back at the forefront of my
In the meantime, I had opened a Roth IRA account with Vanguard in addition to my traditional IRA. I also rolled over two different 401(k accounts
into my traditional IRA. And last year, wanting the ability to trade on some specific market trends, I opened a brokerage account within my
Vanguard IRAs Review: Setting Up An Account
Originally opening my account (and subsequently opening others) was straightforward and hassle-free, and I was able to do almost all of it online.
(I had to mail in some signature documents initially.) At the time I took the automatic contribution option, which deducted a set
amount from my checking account every month and transferred it into my IRA. Doing that waived the minimum purchase requirements for the investments
I had chosen.
The two 401(k) rollovers I made later were seamless. Vanguard has assistance available by telephone, but I can’t recall that I’ve ever had to use it.
I’m one of those people who would rather do it myself online than deal with a real human, and so far with Vanguard I’ve been able to with no problems.
Vanguard IRAs Review: Brokerage Account
Finally, opening the brokerage account was also easy. Vanguard has stock and ETF trading commissions about average among
best brokerage firms —
$7 per trade, that what Scottrade offers. (If your overall account has less than $50,000 in Vanguard funds and ETFs—not just the total balance—you only get 25 $7 trades per year;
after that the commission is a much steeper $20 per trade. Of course, a brokerage account inside an IRA isn’t exactly meant for active trading,
so I’ve never heard anyone complain that this is an issue. But if you’re looking for a brokerage account where you can do lots of trading,
this isn’t the place for you.)
Vanguard IRA Review 2017: Mutual Funds
Vanguard is known for its mutual funds, and of course there is a definite preference for those funds cost-wise. In its more popular funds, Vanguard
offers “Admiral” shares, which for a minimum investment of $10,000 in that fund give you lower expense ratios. Of course, Vanguard is pretty much
the king of the index fund, so it has plenty of mutual funds with low expense ratios even in its standard funds.
If you want simplified investing, you can do that, too. They offer the “LifeStrategy” funds, which are targeted to a particular retirement date
and automatically adjust the investment mix as you get closer to retirement. (I have a Target Retirement Fund in my Roth.) There are also the
Total Stock Market Index Fund, the Total Bond Market Index Fund, and the Total International Stock Index Fund, which are all exactly what
their names say. (Ben Stein, the comedian and actor best known as the economics teacher in Ferris Bueller’s Day Off who also happens to be an economist and a lawyer, recommends a mix of just two funds—the Total Stock Market Index and the Total Bond Market Index—as the most basic retirement portfolio for those who just aren’t interested in managing investments or paying someone else to do it.)
Vanguard offers plenty of non-Vanguard funds and ETFs and other investments, like annuities. I have been very happy with the extremely low
expense ratios on Vanguard funds.
Vanguard IRA Review 2017: The Website and Tools
I’ve always found the website pretty easy to navigate. Vanguard recently changed the look and layout a bit, but it was nothing too jarring.
The account home page shows you your account balances at a glance (I see my traditional IRA, traditional IRA brokerage, and Roth IRA
accounts listed separately) and your current asset mix compared to the mix recommended for people your age (although you can set your own target
asset mix if you prefer), along with transactions within the past 30 days.
There are good tools for researching mutual funds, stocks, and ETFs. I also have a Scottrade account ($7 per stock)
(Scottrade brokerage review), and while the Vanguard tools don’t
quite rise to the level of a dedicated brokerage site, they’re reasonably capable—and Vanguard was never meant to be a brokerage first and
Scottrade Offer: Open Scottrade account today.
Vanguard IRA Review 2017: Account Balance and Management Fee
When I first started with Vanguard, my low account balance meant a $10 quarterly account management fee. Vanguard later offered an option to waive
that fee in return for going paperless, which I immediately jumped on. (Without that or meeting the minimums, it’s $20 now.) On a side note,
I use Quicken for my personal finances, and Vanguard downloads easily into that software.
All in all Vanguard is a decent company for an IRA. But it has just too many fees.
There are much better options available for investors, both cost-wise and feature-wise.
Vanguard IRA Review 2017: Features and Offerings
Open Vanguard Account
- Stock and Bond trading
- Vanguard Mutual Funds – Stocks and Bond Funds low cost
- Choices both Index and Actively managed
- Vanguard ETF’s – over 60 from which to choose
- No commission trading
- Reduced risk from stocks
- More liquid than mutual funds
- Resources for decision making such as Research and data on Stocks, ETF’s and Mutual Funds
- Information comparing traditional IRAs to Roth IRAs
- Interactive advice investment decisions
- Deals on rollover from existing 401k or 403b accounts
- If previous account allows transfer - typically no cost (if requiring a check a fee is assessed)
- Includes takeover of inherited IRAs
- Online management of accounts and cash management available
- Portfolio analysis tool
- Breaks down investment distribution based on Investment type (i.e. Short-term reserves, stocks, or bonds)
- Further analysis of investment markets (Domestic or International)
- Allows for refinement of an investment goal to inform analysis
- Delineates investment tendencies based on holdings
- Retirement planning worksheets – for proactive decision-making
- Real-time On-line quotes
- Mobile (app) management
- Allowing for access and control anywhere
- Includes most account features
- On-line quotes