Highlighted
Contributor

I have a managed IRA and other managed funds with USAA  working towards retirement. I don't have enough experience with this sort of planning and am unsure if staying with USAA is best for me. This is especially true with what i've recently heard about their fees being higher than others suchs as Vanguard or Fidelty. Can anybody steer me in the the right directions or offer some suggestions?

6 REPLIES

Highlighted

Brix281,

Thanks for reaching out in Community. I certainly understand your concerns when it comes to your retirement account. A specialist will reach out to you to discus in more detail your concerns and answer any additional questions you may have.

Highlighted

Brix281,

 

From a non-USAA employee perspective:  It depends on how much time you want to put into managing your IRA.  USAA is average in both performance and fee structure.  Many people like the customer service USAA provides so having an IRA with the same place you do your banking and insurance is a positive.  Also, USAA understands unique military situations that large corporations may not, which may ease some administrative management.

That being said, if you invested some time into researching mutual funds, index funds, and Exchange Traded Funds (ETFs), you could find better performance and fee management with Fidelity and/or Vanguard.  Morningstar and Motley Fool offer great information about other IRA options.  Hope this helps!

 

Brandon J (not a Certified Financial Planner)

Highlighted
Look up and read Dave Ramsey's book free at your local library " Total Money Makeover"
The principles he teaches you are priceless. Investing your retirement funds in ANY bank will cap your return to less than 8% when you could have an average return of 12% or more. The key is to get out of debt and stay out of debt first before you ever invest a dime. Only then can you ever expect to have financial freedom.
Semper Fi,
Kevin
Highlighted

Dave Ramsey is good for motivating people to get out of debt and start saving money, but when it comes to investment advice he is makes a number of significant false claims that lead people very wrong. Do not take any investment advice from him. He steers people into high-cost, loaded mutual funds that give kickbacks to him and his business partners. When it comes to long-term performance, meaning more money you keep for you, the very best thing you can do is choose a reasonable low-cost index fund and then ignore it. Don't trade, don't panic and sell, and by all means don't get into a fund with an expense ratio of anything more than about 0.3%.

 

That said, investing yourself can be very easy. I highly recommend you start by doing some reading here: Bogleheads Investment Startup Kit. I recommend steering clear of most of the USAA funds because on average they are quite expensive. Vanguard is a fantastic option and Fidelity has a number of very good fund choices as well. The easiest thing for you to do would be to dump your IRA into a target date retirement fund at Vanguard. If you feel comfortable after your online DIY investment education to get a bit fancier, you can create your own lazy portfolio from a few low-cost index funds and also get great results.

Highlighted

On a related note, here are some more sources to back up my claims about the importance of low-fee index investing and more.

 

The Case for Index Investing: Why low-cost index funds historically and fundamentally give the best performance for the vast majority of investors (yes, you included) :)

Why paying attention to fees when investing is so important, from the SEC

 

A few discussions on how DR's investing advice is poor:

http://whitecoatinvestor.com/dave-ramsey-doubles-down-on-his-bad-investment-advice/

http://www.fool.com/investing/general/2013/06/03/dangerous-retirement-planning-advice-from-financia....

https://www.thebalance.com/why-dave-ramsey-is-wrong-on-mutual-funds-2466582

Highlighted
Ysette9,
I'm only sharing my results from following Dave Ramsey's principles. Debt free over 3 years and have averaged 10.4% return on my Class A shares in the market via my Edward Jones account for the last 6 years. On track to be a millionaire 2023. Oh, I have $50,000 in a savings account and invest $20,000 every time my share price drops over 10%. 2023 is a very conservative guess to when I expect to pass the million mark. Don't take this as me "bragging " because I want folks to know it's possible to accomplish. You need discipline and a good work ethic along with a Plan. Sounds like you're on your way as well. Good luck and God speed! Don't forget to share your success with others.
Semper Fi Yvette9,
Kevin