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Financial Planning Question – Schwab and Vanguard Options

 

Q: I am totally invested in WFOBX (401 – Wells Fargo Target 2020) here at work. What do you think about transferring a portion of this account to Schwab where I have a rollover IRA & Roth? I was thinking of VWELX & VWENX, also VGSTX (Star), all Vanguard accounts. I am mid-seventies. Our company only offers VINIX in the Vanguard choices.

A: Thanks for your email and for listening. A couple of points on your question below:

1. It is very difficult for us to give you specific investment advice without knowing your entire situation including risk tolerance, time horizon, expectations, etc. So I cannot offer specific recommendations on any mix of securities without knowing all the details. That being said, we offer free one-hour consultations if you’d like to meet with one of our advisors.
2. Be advised that purchasing Vanguard mutual funds at Schwab will incur a fee, therefore, you must determine whether the fee paid to purchase the mutual funds is worth the POTENTIAL incremental return that could be possible with a move like this.
3. Overall, we like the Vanguard mutual funds you listed a lot, but again, we cannot suggest that these are a good combination for you and your family unless we know more about the specifics of your situation.
4. The target date funds offered in 401K plans are typically very fine choices. Specifically, the fund you mention has relatively low fees (0.5%) and gives you automatic diversification. This may not be a bad choice for you.


 

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