Like many I am paying (1.3%) a fund management fee, in this case for my IRA/Roth retirement money.Universal advise is to invest through Index Funds. Please help me learn how to move my money to index funds without tax liabilities.

Terry Says:

Actually, moving your account is a simple process.  If it is an IRA, you can do a direct rollover to Vanguard or Fidelity.  They will handle all the details.  You do NOT take the cash!

If it is an after-tax investment account (not an IRA) then you can either move your positions to a brokerage account at Vanguard or Fidelity, or you can sell your investments, deal with the tax consequences, and move the cash to one of their index funds.  (If you sell and move cash, your broker is going to get another round of commissions on the sales!)

But before you make this move, do check and see how your account has been performing.  If you are getting good advice from a broker or investment advisor, it may be worth paying 1.3 percent!  But if you have fallen behind the market averages consistently, then you might consider a move.  Do remember to check the tax consequences of a sale of stocks that are not inside a retirement plan.  You can offset gains against losses, but then may have to pay taxes on gains (or get a writeoff against ordinary income).  Do the calculations first.

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