sycamore wrote: Thu Oct 02, 2025 1:05 pm
If you do transfer the Fidelity mutual funds as-is, the question becomes how much you’d pay to sell those funds at Vanguard. Look at Vanguard’s commission schedule to see how much it is. Maybe it’s $75 or $100 (?) per fund to sell at Vanguard.
FSKAX at Vanguard (Fido Total US Stock Index), as an example, is a Transaction-Fee (TF) Fund. While that page says there’s no purchase fee, it does say there’s a transaction fee (so buying, selling, exchanging will have a separate fee).
Van’s Fee Schedule shows that for a TF Fund, the commission for any trade (buy or sell) is $20/trade online if total assets in Vanguard MFs/ETFs are <$1M or $0/trade for the first 25 trades if Van MFs/ETFs are ≥$1M. While that’s less than $75 or $100, it’s still an unnecessary fee so for the OP, I agree with @sycamore’s suggestion to sell-to-cash at Fidelity (not tax consequence as it’s in an IRA and is not a withdrawal), buy the Van ETFs you want (presumably VTI, VXUS, and BND, with maybe VOO and VEA to avoid wash sales with Taxable holdings), and then transfer the ETFs “in-kind” to Van.
silasmarner wrote: Thu Oct 02, 2025 10:57 am
I had wanted to transfer my wife’s IRA at Fidelity to Vanguard and then put everything into LifeStrategy Moderate for the sake of simplicity.
I do kind of wonder why you’re not consolidating at Fidelity, rather than at Vanguard, since most of your funds are Fido funds. Is it just for access to LifeStrategy funds, which you could build yourself for lower cost with VTI, VXUS, BND, and BNDX?
Vanguard LifeStrategy Moderate Growth Fund (VSMGX, ER=0.13%)
-OR-
37% Van Total US Stock Index (VTI, 0.03%)
27% Van Total US Bond Index (BND, 0.03%)
25% Van Total Int’l Stock Index (VXUS, 0.05%)
11% Van Total Int’l Bond Index (BNDX, 0.07%)
Weighted Average ER = 0.04%
Cost savings of 0.09% (9 basis points) for a 4-fund portfolio that requires 10-20 minutes of management effort once a year (see the spreadsheet link at the end of this post). I think you could do that at Fidelity with the Van ETFs and get better customer service and lower cost than using a LifeStrategy fund, although I will admit a single auto-balancing fund is the ultimate in simplicity (I just would pay 9 basis points forever for that convenience, but you have to do what’s best for you & your spouse).
silasmarner wrote: Thu Oct 02, 2025 10:57 am
I’ve thought about either rolling this [cumbersome] 401K into an IRA or shifting funds so that all of the stock funds are in Brokeragelink and all of the bond funds are in the base account. I suspect that rolling everything into an IRA would be simpler in the long run, but I do like having access to a Stable Value fund. Is it worth hanging onto this 401K for the sake a Stable Value fund?
Can you roll the cumbersome 401k into the “good” 401k? Rolling it out to a Trad IRA means you lose your access to backdoor Roth. That might not be a concern if your joint AGI is never expected to exceed $236K (MFJ threshold in 2025, adjusts for inflation). If your AGI is anywhere close to that, I’d probably want to keep backdoor Roth access open in case a good year pops you over the threshold but you still want to contribute the full $7K to a Roth regardless of being over the income threshold. That might also not be a concern if you have a Roth 401k option at your “good” 401k plan (could just put more into Roth if your AGI precludes the full $7K to a Roth IRA).
I agree with @sycamore that keeping the cumbersome 401k just for a stable value fund is likely not a good enough reason (if it was the Federal TSP G-Fund, then sure, but most other stable-value funds are not anywhere near as good as the G-Fund).
silasmarner wrote: Thu Oct 02, 2025 10:57 am
3. What to do with a large HSA given that our portfolio is almost entirely pre-taxI paid all of our medical deductibles out of W2 income the last several years that I worked and have saved all of our receipts. As a result, we have a nice balance that can be withdrawn tax-free. The puzzle now is what to do with this account.
I would probably treat it as a retirement account that you can draw from tax-free after age 65 with no conditions (don’t have to find qualifying medical expenses to avoid the 20% non-medical penalty). So it’s like a Roth, but instead of free access at age 59.5, it’s at age 65. Put it at 100% stocks, just like you would for Taxable and Roth accounts (and all bonds/cash are held in Trad Tax-Deferred accounts per Tax-Efficient Fund Placement).
All your questions are related to simplifying your various accounts (401k, IRA, HSA). If you look at all your accounts as a unified whole, then you’ll likely have a better overall picture of what you have and where you’d like to be. You didn’t list a desired asset allocation, so for the portfolio analysis below I’ve assumed it’s close to what you already have at 65/31/4 with 20% of stocks in int’l (which may not be what you want).
Your Current layout has a potential for Wash Sales with VSMGX in Taxable and also in Her Trad IRA (highlighted in red). All bonds & cash should ideally be held in Trad Tax-Deferred accounts per tax-efficient placement, so the bonds in VMSGX in a Taxable account are not tax-friendly (highlighted in purple). There are a few expensive funds with an expense ration (ER) > 0.30% that are highlighted in yellow with the ER in red; these should be replaced with a similar index fund at lower cost since Costs Matter. There are bonds in the HSA, but if you treat similarly to a Roth, then this account should be 100% stocks (again highlighted in purple). It’s a bit cluttered at 24 holdings, which is probably the root of your general questions on how to simplify.
The Proposed layout leaves most of your stuff at Fidelity and uses a 3-Fund Portfolio concept of US Stock, Int’l Stock, and US Bonds to exactly meet an AA of 63/31/4 with 20% of stocks in int’l (again you can change this if you determine your current AA is not really what you desire for your risk-tolerance and remaining life-expectancy). Taxable, Roth, and HSA are 100% stocks to be tax-efficient and maximize the tax-free nature of Roth & HSA. It’s assumed that that 401k-1 will accept a rollover “in” from 401k-2 as long as you’re still working for Megacrop #1, so the two 401ks are consolidated into 401k-1 (just labeled as His 401k). This account will hold all your int’l stock and all your bonds for the unified portfolio across all accounts. Her Trad IRA hold 4% cash (about what you were holding in your Current layout) with the rest in US Stock. I didn’t move any account to Van or Fido… since most of the assets are at Fido, I’d probably consolidate there if you really want fewer accounts (not strictly necessary, but you could move her $90.72K Trad IRA, Her Taxable, and Her Roth IRA, highlighted in light-blue, to Fido if you want everything at one brokerage). This also simplifies from 24 holdings down to 10 and “Simplicity is the master key to financial success.” — John C. Bogle
Also note that while you’d improve tax-efficiency by selling LifeStrategy Moderate Growth and reinvesting the proceeds in Total Stock Market in the Taxable account, there would be a Tax Cost to Switch Funds. In the long run that’s likely to pay off (maybe 15+ years; I didn’t run the numbers), but if the tax-hit is unacceptable, then you’d probably just stick with LS Mod Growth in Taxable generate income that’s fully taxed at your ordinary income rate rather than the more favorable long-term capital gains (LTCG) tax rate.
A template spreadsheet (not your data) to help with asset allocation assessment and rebalance planning is linked below. Make a copy in your local GoogleSheets space to edit (or download to your local machine if you have Excel). It should only take about 10-20 minutes once a year to update your balances and plan a shuffle among funds if any deltas are off by more than ±5% (or whatever your personal rebalance threshold is).
Asset Allocation Sheet
