General feelings on UBS for an IRA account......

[redgtxdi]

Long story short.....

At work, we're leaving Morgan STanley/DeanWitter (so long) and they've been ok, (I took part in their *portfolio architect* thing which changed names a few times but basically allowed my little money to invest w/ the big boys, yada yada. Fees were hi @ MSDW tho so I won't miss them). We're going to UBS.

I don't know jack about UBS. I can't imagine they're any more expensive than MSDW.....BUT.....I need to decide how much I want to set aside as well as into what fund(s) of theirs.

I'll be moving approx $50K over and have always been an index investor (not a target-account guy, prefer to self-index). My work uses a SIMPLE IRA which allows 3% matching so I know I want to do at least 3% contributions, but do I want to do any more??

I also have a Roth IRA which I do on my own & max out (I think it's $5,500 for 2014) and have done so for almost 2 decades. It's a larger account & it's my primary but I'm always looking for more.

Any feedback/suggestions much appreciated.

TIA

 

[Newell Steamer]

Any feedback/suggestions much appreciated.

The Swiss are sleaze bags.

 

[Gunslinger08]

I think the general rules are:
1. Contribute to work account to matching limit.
2. Contribute to Roth IRA to federal limit.
3. Pay down debt.
4. Contribute to work account to federal limit and/or invest in a standard account.

You have 1 & 2 down. You didn't mention 3, but let's assume you don't have any debt. For me, the option I take with #4 would be dictated by several things:
a. My prediction of future income tax rates vs. today's rates.
b. The front-load and expense ratios of available funds/stocks in your work account.
c. The actual funds/diversity offered by your work account.

Personally, I'm a strong believer in low cost index funds. My experience with employer provided plans is that they don't offer much in the way of low cost index funds, such as Vanguard. If my employer only offered funds with a front load or high expense ratio (>1%), I would strongly consider investing my additional money in a standard account.

 

[CLite]

At $50k I'm fairly certain you won't be assigned an FA at UBS, I believe the line is around $1M in invested assets. Considering you also seem to prefer index funds I'm not sure why you don't just stick that $50k in Etrade or some other comparable low cost service? I just don't understand what value UBS would be providing your asset class.

 

[redgtxdi]

Gunslinger,

You and I think much alike. And, yes, you are correct in assuming no debt.

And I'll try to squeeze in time today to view what funds *might* be offered in this thing since I'm not sure & that would definitely help me decide. MSDW was ridiculous so I only offered up to matching. Since my deadline to submit paperwork (including pay deduction) might hit before I know for sure, I may just go w/ 3% now & if UBS turns out to be all unicorns & rainbows, maybe up the slice next quarter.

Thanks for the feedback!!

 

[redgtxdi]

At $50k I'm fairly certain you won't be assigned an FA at UBS, I believe the line is around $1M in invested assets. Considering you also seem to prefer index funds I'm not sure why you don't just stick that $50k in Etrade or some other comparable low cost service? I just don't understand what value UBS would be providing your asset class.

Refer to rule #1 listed below.......

I think the general rules are:
1. Contribute to work account to matching limit.

 

[Hacp]

Here are the rules regarding this kind of stuff since you ARE an index investor. If the expense ratios for whatever the investments UBS has are 1%+ higher than something you can find that's comparable at Vanguard, then don't even bother putting your money in the IRA. Just keep it in a taxable account.

The reason is that IRA protects against capital gains tax. Long term capital gains is 15% for normal people. Assuming that you would keep your money in those investments for 15-20 years, that's 1% money per year EXTRA that the fund is stealing from you. After 15 years, it would have been better to just have a taxable account.

 

[CLite]

Refer to rule #1 listed below.......

Sorry for some reason my eyes completely skipped over "at work" in your OP.

 

[redgtxdi]

Here are the rules regarding this kind of stuff since you ARE an index investor. If the expense ratios for whatever the investments UBS has are 1%+ higher than something you can find that's comparable at Vanguard, then don't even bother putting your money in the IRA. Just keep it in a taxable account.

The reason is that IRA protects against capital gains tax. Long term capital gains is 15% for normal people. Assuming that you would keep your money in those investments for 15-20 years, that's 1% money per year EXTRA that the fund is stealing from you. After 15 years, it would have been better to just have a taxable account.

Even with the company's matching??

Sorry for some reason my eyes completely skipped over "at work" in your OP.

No worries. I figured you'd missed that and thus my repeating it above to HACP too cuz I always just assume the employer matching is darn-near the only reason some of these high-cost folks are still in business. Cuz I damn-sure wouldn't have ever opted for MSDW myself. (Some of those stupid MSDW funds were almost 2%.)

 

[Hacp]

Even with the company's matching??

You should match with the company then avoid putting anything more IF the difference between UBS and Vanguard expense ratio is over 1%. Your original question was if you should to put any more after a match, which I answered.

There is one exception. If you're going to leave before 15 years, then go ahead and max the simple IRA out and stick it in something very low cost. You should be able to eventually roll over your Simple to a Traditional IRA after you leave your company.

 

[Exterous]

A lot of the advice is going to be dependent on the plans UBS and your employer choose to offer you. They may be good they may not be. (Larger companies can often get ERs much lower than you would on your own)

If they don't have plans with comparable or ERs less than a comparable Vanguard\Fidelity fund then move your $50k to one of those and fund your UBS plan up to the employer match.

As a small bonus $50k will likely get you some money for changing accounts - probably around $300 or 25,000 miles to your airline of choice at Fidelity