Fee Free IRAs
Mr. Money and I both have Roth IRAs with a brokerage account at the bank I currently work at. Since they are in mutual funds, there is an annual fee for having the accounts. Every year it’s been $15 since I’m an employee, and he’s my spouse. Imagine my surprise when this year I received the bills and they were each $40! I almost had a heart attack. I didn’t mind paying $15 a year, but $40 a year is way too much because the balances we have in those accounts doesn’t make up for it. My account has around $400 (I put $500 in about 7 years ago and left it at that). Mr. Money’s has more, which is good because he’s older.
When I went to talk to the broker about it, he told me that the fee had gone up and they would try to get it waived for me. However, if I wanted to close the accounts, there is a $75 fee. Nice. So not only would I be out the annual fee if they can’t get it waived, I’m also out $75 each account. Really? I am exploring these options:
-Finding a new brokerage company that doesn’t charge annual fees or other stupid fees. I’m fine with paying trading fees, since I don’t think there’s really any way around those at any company. I just can’t stand the idea of paying $40 a year just for them to hold my account.
-Opening up a Roth IRA for each of us with ING. With ING, they have an IRA savings account that has no minimum balance and no fees. I really like that idea. I’ve thought about starting one of those for each of us, and then contributing what we can each month. When the balance builds up to say $10,000 (which will probably take quite awhile!), then I could always look into transferring it into a brokerage account.
-I’m thinking about just closing out my account totally and just using the money to buy baby things. Of course, I’d have to claim this as income, which would be a pain, but I wouldn’t have to pay that much in taxes since the balance is so small.
I am waiting to see what happens with the annual fee. If they can get it waived, then I’ll probably just leave the accounts as they are. However, I’m worried that once I terminate my employment that they will realize that and remove the waiver and I’ll be right back in the same situation. I think it would be easiest to just close out the accounts and move them to ING because of the no minimums and no fees, but I’m worried about lost opportunity in the mutual funds. Of course, if my account has been in mutual funds for 7 years, and I’m $100 less than what I put in, it’s really not doing that well any way!
Planning for retirement can be such a headache. I’m glad we’re getting it done now, but I’m hoping there’s an easy solution so I don’t have to do too much work after we get it squared away!
Do you have an IRA? What is your favorite place for a fee free IRA?