I'm looking to consolidate my 401(k) accounts at previous employers into an IRA along with funding a Roth. I use IB for my trading account but realize they may not necessariy be the best for this type of account - but perhaps they are. I am wondering if anyone had any good reasons for using one broker over another for this. I appreciate any feedback.
All depend on what you do, what instrument you trade, frequency of trades, etc, etc. So you have to be specific.
wrong...thinkorswim allows trading in your IRA and all defined risk option trades as well as stock/mutual funds...daytrade all you want
The problem with IB is the minimum trading commission or monthly charge. If you invest long-term with your IRA account and make very little trades each month, they charge you $10 each month. Otherwise I don't see any reasons why not use IB since you have been using IB for your regular trading account (and assume you are comfortable with their service and their platform). TOS is great for option traders too.
True, that sort of drive my question - But it is still less than an adviser or full-service broker's fee. Is anyone aware of any brokers with no inactivity fees on IRAs?
I am never charged at Fidelity to act as custodian for my IRA accounts. They will even give you some FREE trades with 25K of new assets, for six months. el surdo
Since you are already familar with IB I'd look at their Friends and Family Account (advisor account). You'd be responsible for producing a total of $30 in commissions across all three accounts. If you currently produce $30 in your trading account you are covered. If you generate less than $30 you'd have to make up the difference (and maybe a little more) each month. It is a little tricky. This would probably be you - You, the advisor, have the US non pro data package. ($10/waived for $30 in commissions) Example 1 Sub 1 = $20 commissions Sub 2 = $9 Commissions Sub 3 = $0 Commissions Monthly Charges Master = $10 Market data Sub 1 = $0 charged to account Sub 2 = $1 charged to account Sub 3 = $10 charged to account ---------------------------- Example 2 Sub 1 = $20 commissions Sub 2 = $10 Commissions Sub 3 = $0 Commissions Monthly Charges Master = Market data waived (total commissions >= $30 Sub 1 = No charges Sub 2 = No charges Sub 3 = No charges Notice that your charges can go from $0 to $$40 depending on whether or not you traded a bunch or not at all. IB does not charge an annual fee for IRA type accounts, some firms do. It is unlikely that idle cash in the IRA's would make any money as IB does not pay interest on credit balances under $10K and does not aggregate the free cash held in all of an advisor's accounts to determine the $10K Each stands alone, so IB makes out. An advantage is your ability to allocate trades. Say you have $100K in equities in your IRA and fund a new Roth with $3K in January. Say you sell your RIMM stock and have $20K in your IRA. You want to buy GOOG at its then current price of $700. You buy 32 shares for $22,400 + $1 for commission. Because you've setup "allocate on available equity", IB puts 28 shares in the IRA and 4 in the Roth and allocates the commission as well.. You do not need to allocate if you don't want to. If you are going to trade enough IB is the way to go. If you don't trade much you'll have to look at the other guys and do a trade-off between their commissions and charges and IB assuming paying them some default amount monthly. One additional thing. If you go with IB, do not open the Roth until you can fund it. Do the paperwork but do not complete. Avoid any inactivity fees. Some years back I had a Datek account that transferred to Ameritrade. As I recall there was no IRA or inactivity fee. Jack
Daytrade at thinkorswim for $.015 per share ($5.00 minimum) IB only charges $.005 per share ($1.00 minimum)
if trading FUTURES, you need to use a trust company + broker to handle your money. For example, trust company Millennium (mtrustcompany.com).