Vanguard brokerage company rating


Vanguard IRA accounts: Roth IRA, Traditional IRA, SEP, SIMPLE and 401(k) rollover. Fees, commissions, and investment options. Advantages and disadvantages of opening IRA at Vanguard.

Vanguard IRA Review: Introduction

Besides regular brokerage accounts, Vanguard also offers a selection of IRA's. Retirement savers can open an Individual Retirement Account with the broker without depositing a dime. Let's take a look at the details of the firm's retirement offerings and see how they compare to some of the company's rivals.

Opening an IRA

Several different IRA versions are available at Vanguard. The broker offers Roth, Traditional, Rollover, Custodial, SIMPLE, and SEP versions. An on-line application form is available for all of these accounts except the SIMPLE version, which must be submitted the old fashioned way. The Rollover electronic application will lead you step-by-step through the process of moving an old employer's plan into a Vanguard IRA. If you have any questions during the application process, the broker has retirement specialists who can be reached at 1‑800‑551‑8631 during the week.

Vanguard ROTH IRA: Opening Account

Vanguard IRA Fees and Account Requirements

As already mentioned, Vanguard does not require any deposit of funds to open an IRA. There is no fee to establish a retirement account; and the broker does not charge a fee for inactivity. Vanguard also does not charge anything to close an IRA. This policy is really nice, given that many brokers nowadays do charge an IRA closeout fee. For example, Fidelity charges $50, Firstrade clients pay $50 (excluding SIMPLE accounts, which have an annual fee of $25), and Merrill Edge traders are charged $49.95.

Vanguard does charge a $20 yearly fee for both regular and retirement accounts. Another $20 fee is assessed if a Vanguard mutual fund has a balance under $10,000. The good news is that both of these charges can be avoided by enrolling in electronic delivery of account documents. The broker also waives the fees for IRA's with balances above $50,000.

A $25 fee is assessed annually for each SIMPLE IRA that has a Vanguard fund in it. The charge is applied to each Vanguard fund, so if one SIMPLE account had 5 Vanguard funds, it would be charged $125 per annum. The broker frequently gives discounts to large accounts, and the $25 charge is waived for clients who have more than $50,000 on deposit.

Vanguard ROTH IRA Review

IRA Tools

The Vanguard website has 10 IRA calculators. They cover several different areas. For example, one determines when distributions must begin from a Traditional IRA, and how much the withdrawals must be. Another evaluates whether a user should choose a Roth or Traditional account, based on several inputs. A third calculator looks at the advantages and disadvantages of converting a Traditional IRA to a Roth.

Vanguard Review: IRA Tools

IRA Educational Materials

Vanguard traders have access to an assortment of articles that discuss several IRA issues. One article, for example, looks at the benefits of converting an old 401(k) plan to an IRA. Another discusses Social Security payments. A pdf worksheet on retirement topics is also available to the firm's customers.

A selection of Vanguard videos that discusses a variety of retirement subjects can be found on YouTube. The videos are more difficult to find on the broker's website, so it's easier to do a search on YouTube for 'Vanguard retirement' or 'Vanguard IRA'.

Vanguard ROTH IRA Review: Education Materials

Comparison

E*Trade offers more IRA types than Vanguard. There are ten E*Trade IRA versions, including OneStop Rollover, Beneficiary IRA, and Complete IRA. These accounts will benefit certain investors in particular situations.

Although Vanguard waives certain IRA fees for accounts that are enrolled in e-statements, a Fidelity Investments IRA has no fees but still comes with paper statements. TD Ameritrade offers paper statements for free for accounts above $10,000, while Vanguard requires $50,000, and that amount must be strictly in Vanguard mutual and exchange-traded funds.

The ten IRA calculators on Vanguard's site are a larger selection than what other brokers offer. WellsTrade, by comparison, has zero; and Capital One Investing has one. The retirement information on TD Ameritrade's website is easier to find compared to the navigation required on Vanguard's site. A search field in the upper-right corner of the Vanguard site helps to find information, but the site is still not as easy to browse compared to the Merrill Edge and Fidelity sites. The Merrill and Fidelity sites also seem to have more educational material devoted to retirement topics.

Mutual fund investors have a good broker with Vanguard. The company has one of the largest selections of mutual funds in the industry. The brokerage arm of USAA comes close to Vanguard in total funds available. Most other brokers have far fewer. E*Trade offers around 8,000. And Ally Invest clients have access to less than 9,000.

ETF traders have 700 Vanguard funds that can be traded without paying any commissions. This selection is larger than Ally Invest, which offers 100. Firstrade clients have access to all ETF's (as well as stocks and mutual funds) commission-free.

Retirement savers may prefer meeting with a financial advisor in person for some extra guidance. Unfortunately, Vanguard doesn't operate any branch locations. TD Ameritrade, by comparison, has over 450.

Vanguard IRA Review Conclusion

Vanguard offers retirement savers a lot with its selection of IRA's, fee reduction policies, and investment advisory options. But many of Vanguard's benefits require at least $50,000 in assets. Smaller investors can find no-fee IRA's elsewhere with better trading tools and an ample supply of funds.

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Vanguard IRA reviewed by TopRatedFirms.com Rating: 3