Simple IRA rollover

My old employer offered an IRA through Fidelity and I just passed the 2 year maturity date on that account. With Simple IRAs you have to wait 2 years before the funds are available to rollover. I’m sure regular investment accounts at Fidelity are fine, but this IRA was an “Advisor” account and I didn’t really have much control over it and the investment options were limited. Some of the fees are a little steep considering how much I have in the account. I think I just have a money market fund in it that hasn’t done much, but I did double my investment from the employer match.

The Fidelity IRA will be rolled over to a Traditional IRA at Vanguard and I’m contemplating putting the money into the Total International Stock Index Fund. I’ve got the Target Retirement 2045 in my Roth which is heavy in domestic large caps and only has 18% of its holdings in international stocks. I’d be willing to go a little higher than that, maybe 30-35% international. My rollover just barely meets the minimum $3000 in the international fund and maxing out my Roth IRA for 2008 would put my portfolio at 39% international. Next year I’ll buy more of the 2045 fund and bring that percent down.

If anybody is interested I put together a little spreadsheet to help calculate asset allocation based on a fund’s holdings. With funds of funds, this can be tough to figure out, especially if you have overlap in different funds. Since I’m in broad market index funds I don’t have to worry about being too heavy in a certain sector or single company.

Yeah yeah I know, index fund blah blah blah, asset allocation blah blah blah.

2 Replies to “Simple IRA rollover”

  1. Good choice to do the rollover. Don’t forget about non-traditional asset classes. All of my clients have some exposure to gold, commodities, and domestic and international real estate. Keep in mind that more than half the global economy is outside of the US. Also – you can use the extended market indices, including domestic and int’l, to give yourself a small company tilt. Otherwise you’ll be underexposed to the asset classes. Given your retirement goal is so far off, this is a good idea. -Brendan

  2. Thanks for the tip on asset classes, once I have more money to move around I’ll be looking at more than just domestic/international/bond indexes. At this point I’m just trying to get it packed away where I can’t spend it.

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