VG is nagging about transitioning account

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Topic Author
Gatto Bialetti
Posts: 28
Joined: Fri Sep 06, 2019 4:45 pm

VG is nagging about transitioning account

Post by Gatto Bialetti »

First when logging in, and now in hardcopy they're mailing.

What can you tell me about this transition to their new investment platform? They say it's going to happen automatically anyway in 2022, maybe earlier. Should I care about this? I don't do any purchasing or selling anymore; my investments ride in my fairly conservative allocation, and we live on pensions and SS. So the platform, I would guess, doesn't really matter much in my case.

What's your take? Have you done this?
livesoft
Posts: 75166
Joined: Thu Mar 01, 2007 8:00 pm

Re: VG is nagging about transitioning account

Post by livesoft »

They are not nagging us. We have a mix of old / new style accounts. We don't notice any difference. Others have noted that one cannot have dividends in one fund automatically re-invested in a different fund, but they can be sent to the cash sweep (money market). We have dividends sent directly to our checking account because we do not want to add anymore to money at Vanguard.
Wiki This signature message sponsored by sscritic: Learn to fish.
alex_686
Posts: 7837
Joined: Mon Feb 09, 2015 2:39 pm

Re: VG is nagging about transitioning account

Post by alex_686 »

Vanguard wants to retire its mutual fund only platform and move everybody to the brokerage platform.

Its is cheaper to run and maintain 1 system rather than 2. It is a much contested topic here but the writing is on the wall. Having been in operations I totally understand why Vanguard us doing this.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
buhlaxtus
Posts: 234
Joined: Wed Apr 20, 2016 1:55 am

Re: VG is nagging about transitioning account

Post by buhlaxtus »

I did this some time ago and it was not a big deal.
backpacker61
Posts: 499
Joined: Wed May 20, 2020 6:36 am

Re: VG is nagging about transitioning account

Post by backpacker61 »

Gatto Bialetti wrote: Thu Dec 17, 2020 8:42 pm First when logging in, and now in hardcopy they're mailing.

What can you tell me about this transition to their new investment platform? They say it's going to happen automatically anyway in 2022, maybe earlier. Should I care about this? I don't do any purchasing or selling anymore; my investments ride in my fairly conservative allocation, and we live on pensions and SS. So the platform, I would guess, doesn't really matter much in my case.

What's your take? Have you done this?
Yes, I have done this.

I had to when I wanted to consolidate some individual stocks and non-Vanguard mutual funds into a Vanguard Brokerage Account. The only limitation I'm aware of is that on the mutual fund platform, you could invest dividend and capital gain distributions from one mutual fund into a different mutual fund. On the brokerage platform, you can only re-invest those into the same mutual fund, or send them to the sweep (federal money market) account.

i can understand the attractiveness of that feature, but it's not one that I ever planned to make use of.
“Now shall I walk or shall I ride? | 'Ride,' Pleasure said; | 'Walk,' Joy replied.” | | ― W.H. Davies
sycamore
Posts: 1825
Joined: Tue May 08, 2018 12:06 pm

Re: VG is nagging about transitioning account

Post by sycamore »

I made the transition for my 3 accounts (taxable, Trad IRA, Roth IRA) and I'm happy I did. There are some features that only exist in the mutual fund platform but I never made use of them, so no loss from my perspective. And I was already used to having a brokerage account and settlement fund, so no learning curve for that.

We haven't bothered to transition my wife's accounts.

I'm not concerned about what might happen in 2022. I think mutual fund accounts will continue to exist for many years to come, but using the website (or getting customer service) for them will become slower and/or buggy as Vanguard seems to be indicating their IT investments will be prioritized on the brokerage platform.

Suggest you read Vanguard's document describing what the transition is like so you get some idea of what you're in for.
tomd37
Posts: 3545
Joined: Thu Mar 01, 2007 10:39 pm
Location: Middle Tennessee

Re: VG is nagging about transitioning account

Post by tomd37 »

If I am going to do it in 2021 or by 2022, should I consider going ahead and doing it this month anyway? My only concern might be the year-end reporting and what it is going to look like. I understand there will no longer be a year-end all inclusive year-to-date annual report, but rather four separate and not cumulative quarterly reports which will have to be retained for each year instead of one annual report to be retained.

I personally have a traditional IRA account, a Roth IRA account, and a joint taxable investment account with my spouse. My spouse has a traditional IRA account as well. In these accounts we invest in only three Vanguard mutual funds; Total Stock Market Index (VTSAX), Intermediate-Term Bond Index (VBILX), and Real Estate Index (VGSLX) if these matter in your comments. We reinvest any dividends in all the accounts and do not depend on those dividends to supplement our pension and Social Security income.
Tom D.
User avatar
climber2020
Posts: 1704
Joined: Sun Mar 25, 2012 8:06 pm

Re: VG is nagging about transitioning account

Post by climber2020 »

Gatto Bialetti wrote: Thu Dec 17, 2020 8:42 pm What's your take? Have you done this?
I'm ignoring it and will stay on the old platform as long as possible. Much easier and faster to do a Backdoor Roth on the old platform.
User avatar
Monster99
Posts: 465
Joined: Tue Aug 29, 2017 10:28 am

Re: VG is nagging about transitioning account

Post by Monster99 »

I transitioned awhile back and there was no issues. If I had to do it again I would transition early in the year before distribution of dividends and capital gains - I did it mid year and ended up with 2 1099's for the year, one for each platform.

Edit - The only thing I notice is ths tax forms appear mid-Feb instead of late Jan....
Last edited by Monster99 on Thu Dec 17, 2020 9:41 pm, edited 1 time in total.
livesoft
Posts: 75166
Joined: Thu Mar 01, 2007 8:00 pm

Re: VG is nagging about transitioning account

Post by livesoft »

climber2020 wrote: Thu Dec 17, 2020 9:14 pmI'm ignoring it and will stay on the old platform as long as possible. Much easier and faster to do a Backdoor Roth on the old platform.
We have our IRAs on the new platform. Roth conversions are trivial, so I am not sure how they could be easier and faster on the old platform.
Wiki This signature message sponsored by sscritic: Learn to fish.
livesoft
Posts: 75166
Joined: Thu Mar 01, 2007 8:00 pm

Re: VG is nagging about transitioning account

Post by livesoft »

Monster99 wrote: Thu Dec 17, 2020 9:38 pm I transitioned awhile back and there was no issues. If I had to do it again I would transition early in the year before distribution of dividends and capital gains - I did it mid year and ended up with 2 1099's for the year, one for each platform.

Edit - The only thing I notice is ths tax forms appear mid-Feb instead of late Jan....
Or perhaps do a transition AFTER distributions in 2020, but before 2021 starts.
Wiki This signature message sponsored by sscritic: Learn to fish.
tomd37
Posts: 3545
Joined: Thu Mar 01, 2007 10:39 pm
Location: Middle Tennessee

Re: VG is nagging about transitioning account

Post by tomd37 »

Livesoft - The late December transition is a question I have and look forward to comments.
Tom D.
nano
Posts: 11
Joined: Sat Dec 05, 2020 1:04 pm

Re: VG is nagging about transitioning account

Post by nano »

I opened my account at vanguard a few months before the new platform was available. I transitioned when it was available. I was only on the old platform for a few months so I can't compare to that, but the newer platform works well for me. The only problem I ran into was that the initial tax forms vanguard sent me did not have income from the old platform accounts - I had to request them... then check for accuracy... then wait while they fixed the errors. That was over 5 years ago though.
User avatar
climber2020
Posts: 1704
Joined: Sun Mar 25, 2012 8:06 pm

Re: VG is nagging about transitioning account

Post by climber2020 »

livesoft wrote: Thu Dec 17, 2020 9:41 pm
climber2020 wrote: Thu Dec 17, 2020 9:14 pmI'm ignoring it and will stay on the old platform as long as possible. Much easier and faster to do a Backdoor Roth on the old platform.
We have our IRAs on the new platform. Roth conversions are trivial, so I am not sure how they could be easier and faster on the old platform.
There are several extra steps with the brokerage account and it takes longer.

I have the old version, and my spouse has the new version. I do both Backdoor Roths each year, and it's much faster with mine. Eventually if I'm forced to convert it won't be a big deal, but given the choice I'm going to stay with what I have until it's no longer an option.
UpperNwGuy
Posts: 4776
Joined: Sun Oct 08, 2017 7:16 pm

Re: VG is nagging about transitioning account

Post by UpperNwGuy »

I would go ahead and make the transition because:
— The new platform is fine, nothing to be afraid of.
— It's going to happen anyway sooner or later, so get it done now.
User avatar
eye.surgeon
Posts: 814
Joined: Wed Apr 05, 2017 1:19 pm
Location: California

Re: VG is nagging about transitioning account

Post by eye.surgeon »

climber2020 wrote: Thu Dec 17, 2020 9:14 pm
Gatto Bialetti wrote: Thu Dec 17, 2020 8:42 pm What's your take? Have you done this?
I'm ignoring it and will stay on the old platform as long as possible. Much easier and faster to do a Backdoor Roth on the old platform.
Exactly. My wife's account was transitioned to the new format, mine is the old. For me a backdoor Roth is a couple clicks, and fast. For her it's a ridiculous jumping through multiple hoops and several days of pointless waiting.
"I would rather be certain of a good return than hopeful of a great one" | Warren Buffett
User avatar
Eagle33
Posts: 1216
Joined: Wed Aug 30, 2017 3:20 pm

Re: VG is nagging about transitioning account

Post by Eagle33 »

Does anyone know what year VG' MF/ETF patent runs out - maybe 2023? The push to brokerage accounts and ETFs seem to have unspoken agenda.
Rocket science is not “rocket science” to a rocket scientist, just as personal finance is not “rocket science” to a Boglehead.
pascalwager
Posts: 1903
Joined: Mon Oct 31, 2011 8:36 pm

Re: VG is nagging about transitioning account

Post by pascalwager »

I made the transition this summer for three accounts. Went smoothly, no problems.
16% TSM | 16% TISM | 7% LV | 7% SV/SC | 7% ISV/ISC | 7% EM | 20% TIPS | 20% STIG | Bonds 9.1 years duration
User avatar
Watty
Posts: 21855
Joined: Wed Oct 10, 2007 3:55 pm

Re: VG is nagging about transitioning account

Post by Watty »

tomd37 wrote: Thu Dec 17, 2020 9:08 pm If I am going to do it in 2021 or by 2022, should I consider going ahead and doing it this month anyway? My only concern might be the year-end reporting and what it is going to look like.


I would assume that their customer service department will be very busy in December and January with people doing things before year end and right after year end. I would wait until at least late January so that they may be less busy if you do need to call them for some reason.
Broken Man 1999
Posts: 5827
Joined: Wed Apr 08, 2015 11:31 am
Location: West coast of Florida, inland on high ground!

Re: VG is nagging about transitioning account

Post by Broken Man 1999 »

I transitioned as soon as I could. After transitioning, our account total was cut in half, as we have investments that require a brokerage account. IIRC, the previous brokerage account was via Pershing.

Never looked back, great change for us. Fewer accounts to manage was a big plus.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go. " -Mark Twain
tibbitts
Posts: 12884
Joined: Tue Feb 27, 2007 6:50 pm

Re: VG is nagging about transitioning account

Post by tibbitts »

They've stopped nagging me for now, but my question is why are there some features that still only exist on the older platform after all this time? Fixing that would silence most of the objections.

At Fidelity I have a brokerage account and admittedly that platform can't seem to do what Vanguard's mutual fund platform can either, although from what I understand it comes closer. But that doesn't mean Fidelity has the best possible platform and that Vanguard couldn't improve on it.
jebmke
Posts: 12283
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: VG is nagging about transitioning account

Post by jebmke »

Watty wrote: Fri Dec 18, 2020 8:05 am
tomd37 wrote: Thu Dec 17, 2020 9:08 pm If I am going to do it in 2021 or by 2022, should I consider going ahead and doing it this month anyway? My only concern might be the year-end reporting and what it is going to look like.


I would assume that their customer service department will be very busy in December and January with people doing things before year end and right after year end. I would wait until at least late January so that they may be less busy if you do need to call them for some reason.
if it is a taxable account, I'd be inclined to do it in January but before any 2021 dividends or other taxable distributions occur so that I didn't end up with two tax statements for 2021 to deal with.
When you discover that you are riding a dead horse, the best strategy is to dismount.
User avatar
David Jay
Posts: 10170
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: VG is nagging about transitioning account

Post by David Jay »

livesoft wrote: Thu Dec 17, 2020 9:41 pm
climber2020 wrote: Thu Dec 17, 2020 9:14 pmI'm ignoring it and will stay on the old platform as long as possible. Much easier and faster to do a Backdoor Roth on the old platform.
We have our IRAs on the new platform. Roth conversions are trivial, so I am not sure how they could be easier and faster on the old platform.
+1 Don't see how it could be any easier...
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
User avatar
TomatoTomahto
Posts: 11917
Joined: Mon Apr 11, 2011 1:48 pm

Re: VG is nagging about transitioning account

Post by TomatoTomahto »

We transitioned but “manually,” because the transfers-in-kind were going to accounts with changed ownership (moving assets to trust accounts).

One recommendation for Quicken users: delete the downloaded “Adds” to your account and use “transfer shares between accounts.” That’s the way to retain cost basis in Quicken. This is especially important if you have uncovered shares.
I get the FI part but not the RE part of FIRE.
User avatar
Picasso
Posts: 167
Joined: Fri Feb 01, 2019 2:19 pm

Re: VG is nagging about transitioning account

Post by Picasso »

Seems to me that VG is doing the right thing for ease of use and to keep fees low.
tibbitts
Posts: 12884
Joined: Tue Feb 27, 2007 6:50 pm

Re: VG is nagging about transitioning account

Post by tibbitts »

David Jay wrote: Fri Dec 18, 2020 9:36 am
livesoft wrote: Thu Dec 17, 2020 9:41 pm
climber2020 wrote: Thu Dec 17, 2020 9:14 pmI'm ignoring it and will stay on the old platform as long as possible. Much easier and faster to do a Backdoor Roth on the old platform.
We have our IRAs on the new platform. Roth conversions are trivial, so I am not sure how they could be easier and faster on the old platform.
+1 Don't see how it could be any easier...
At Fidelity, when I do a conversion, the brokerage platform seems to make me first place my converted amount into the Roth in the same fund it's coming from. I asked Fidelity and they told me that's just how it works. Then in another day I can move that money to a different fund. With Vanguard's old platform, I can both move across accounts (IRA types) and move to a different fund in one step. That hasn't been a huge problem for me, just annoying.
User avatar
David Jay
Posts: 10170
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: VG is nagging about transitioning account

Post by David Jay »

I do an “exchange funds” from tIRA>Fund A to Roth>Fund A. I get a warning that this is a taxable event. I acknowledge the warning and it asks if I want any IRS withholding. I say “no”. Done.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
tibbitts
Posts: 12884
Joined: Tue Feb 27, 2007 6:50 pm

Re: VG is nagging about transitioning account

Post by tibbitts »

David Jay wrote: Fri Dec 18, 2020 9:53 am I do an “exchange funds” from tIRA>Fund A to Roth>Fund A. I get a warning that this is a taxable event. I acknowledge the warning and it asks if I want any IRS withholding. I say “no”. Done.
So at Vanguard brokerage you can say "Fund B" for the destination? That's my question with Fidelity (brokerage.) At Fidelity, I use "Transfer", which is not "Exchange", and seems to be purely account (as in IRA type) to account. Exchange works within an account, seemingly not across accounts.
Scorpion
Posts: 357
Joined: Mon Sep 14, 2009 6:56 am

Re: VG is nagging about transitioning account

Post by Scorpion »

I already have both a Brokerage account at Vanguard and a mutual fund account. I get separate tax statements for both already. Does that mean I don't need to worry about the tax concern mentioned in this thread in terms of multiple tax statements depending on when I transition, or does it still matter? I haven't transitioned yet because:

(a) I perceive no benefit;
(b) I am worried it will mess up Quicken;
(c) and I now have the new worries about tax statements and more backdoor Roth hassle.

Assuming it is inevitable that I must transition someday, I would love any thoughts on the tax statement question.
stan1
Posts: 9815
Joined: Mon Oct 08, 2007 4:35 pm

Re: VG is nagging about transitioning account

Post by stan1 »

Scorpion wrote: Fri Dec 18, 2020 10:04 am I already have both a Brokerage account at Vanguard and a mutual fund account. I get separate tax statements for both already. Does that mean I don't need to worry about the tax concern mentioned in this thread in terms of multiple tax statements depending on when I transition, or does it still matter? I haven't transitioned yet because:

(a) I perceive no benefit;
(b) I am worried it will mess up Quicken;
(c) and I now have the new worries about tax statements and more backdoor Roth hassle.

Assuming it is inevitable that I must transition someday, I would love any thoughts on the tax statement question.
a) If you do the transition you will benefit in the future by having one consolidated 1099 instead of the two you get now. I see no reason to procrastinate. The other benefit is lower costs for everyone and a simplified single account view for you personally.
B) Quicken can maintain cost basis if you do the data entry correctly. Search on how to do it. You'll find many threads and you can match what you read to your configuration of Quicken (hint: it probably involves a transfer between accounts and Quicken will handle that by doing remove/adds for each lot). Back up your data file before you start.
C) There are no worries about tax statements (yours will be simpler as you will go from two to one). Backdoor Roth IRAs are not a hassle. Contribute to the TIRA. Exchange to the Roth.

The choice of the word "nagging" in the title of this thread is interesting. Some people don't like to be told what to do.
Topic Author
Gatto Bialetti
Posts: 28
Joined: Fri Sep 06, 2019 4:45 pm

Re: VG is nagging about transitioning account

Post by Gatto Bialetti »

Others have noted that one cannot have dividends in one fund automatically re-invested in a different fund, but they can be sent to the cash sweep (money market).
One of my funds is the former Prime, now Federal MM or whatever it's called. Does that one become the sweep fund if I do this transition?
User avatar
Cheez-It Guy
Posts: 1333
Joined: Sun Mar 03, 2019 4:20 pm

Re: VG is nagging about transitioning account

Post by Cheez-It Guy »

Just do it and move on with your life.

Regarding your specific question on money market funds, the settlement fund will be Vanguard Federal Money Market Fund (VMFXX). There is little difference between most of the money market funds with all of them yielding extremely low amounts. I would just convert all your money market holdings to VMFXX / settlement fund for simplicity. You can set up checkwriting against that with another money market fund or bond fund for backup.

Also, read at least the first post in this thread, because these points are often misstated:

viewtopic.php?t=328977
User avatar
Brianmcg321
Posts: 1302
Joined: Mon Jul 15, 2019 8:23 am

Re: VG is nagging about transitioning account

Post by Brianmcg321 »

LOL. These threads are hilarious. I just never understood the issue. I hit a button and a few days later it was over. Completely painless and I don't see any difference what so ever.
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
mak1277
Posts: 1762
Joined: Fri Jan 09, 2015 4:26 pm

Re: VG is nagging about transitioning account

Post by mak1277 »

Brianmcg321 wrote: Fri Dec 18, 2020 1:35 pm LOL. These threads are hilarious. I just never understood the issue. I hit a button and a few days later it was over. Completely painless and I don't see any difference what so ever.
I agree about not understanding the issue, but I'm on the opposite side. I'm not going to do anything until it's forced on me in 2022 or whatever.
User avatar
Cheez-It Guy
Posts: 1333
Joined: Sun Mar 03, 2019 4:20 pm

Re: VG is nagging about transitioning account

Post by Cheez-It Guy »

So you relish being a barrier to progress for no good reason? It doesn't really matter whether you see it as "progress". You appear to see it as neutral, but your service provider would like you to do it so that they can progress. If you don't care, why make it more difficult for the organization from which you derive benefit? Quite puzzling.
Dead Man Walking
Posts: 1052
Joined: Wed Nov 07, 2007 6:51 pm

Re: VG is nagging about transitioning account

Post by Dead Man Walking »

I’m transitioning my taxable investments to a brokerage account that I have with another firm so that I only have to deal with one statement at tax time. I’ve maintained a taxable account at Vanguard because the comprehensive year end statements were fantastic for record keeping and tax filing. I plan to keep my retirement accounts at Vanguard. I’ll transition my retirement accounts to the brokerage platform via a telephone call. I refuse to be put on hold for the next available representative; consequently, the timing of my transition will be entirely up to Vanguard’s customer service platform.

DMW
User avatar
Cheez-It Guy
Posts: 1333
Joined: Sun Mar 03, 2019 4:20 pm

Re: VG is nagging about transitioning account

Post by Cheez-It Guy »

Can't you just log in and click to convert? Why the need to call at all?
hawkfan55
Posts: 336
Joined: Thu Apr 03, 2014 9:04 pm

Re: VG is nagging about transitioning account

Post by hawkfan55 »

I do Roth conversions and never have taxes taken out at the time of the conversion. In mid/late December, I pay my Federal Taxes for the year by selling the needed dollar amount and withholding 100% for taxes. Taxes paid in December through an IRA withdrawal are treated as if they are paid throughout the year. My understanding is that with the NEW platform, one cannot make a withdrawal and choose to have 100% of the withdrawal go towards Fed taxes. Is this true and are withdrawals to pay taxes treated as if paid throughout the year?
Forum Library of Investing Advice: https://www.bogleheads.org/wiki/Main_Page
Naikansha
Posts: 282
Joined: Tue Nov 09, 2010 8:32 pm

Re: VG is nagging about transitioning account

Post by Naikansha »

Has anyone used a RMD using funds in their brokerage account and transferring amounts left over after taxes and QCD?
Makefile
Posts: 532
Joined: Fri Apr 22, 2016 11:03 pm

Re: VG is nagging about transitioning account

Post by Makefile »

tibbitts wrote: Fri Dec 18, 2020 9:17 am They've stopped nagging me for now, but my question is why are there some features that still only exist on the older platform after all this time? Fixing that would silence most of the objections.

At Fidelity I have a brokerage account and admittedly that platform can't seem to do what Vanguard's mutual fund platform can either, although from what I understand it comes closer. But that doesn't mean Fidelity has the best possible platform and that Vanguard couldn't improve on it.
I think it's because despite being marketed like a software upgrade, what is actually happening is no different than opening a brokerage account at somewhere like E*TRADE and transferring your shares from direct registration at Vanguard, to in street name at that brokerage. It just happens that the broker in this case is Vanguard Brokerage.

It's analogous to owning stocks as a paper certificate, or one of those Computershare direct investment plans, and depositing them into a brokerage account.

For example, T. Rowe Price still has one choose between opening "mutual fund accounts" (direct registration) and "brokerage accounts", much like Vanguard used to. Their "mutual fund account" similarly has the missing features, like directing dividends seamlessly from one fund to be reinvested in a different fund.

As has been pointed out on other threads, people in certain positions in public companies have all sorts of disclosure requirements in order to have a brokerage account. Often they can only pick from a selected list of brokerages. If it's a "mutual fund account" (direct registration) those restrictions apparently don't apply.

Why any of that means you can't direct dividends between funds in brokerage? No idea!
Northern Flicker
Posts: 7084
Joined: Fri Apr 10, 2015 12:29 am

Re: VG is nagging about transitioning account

Post by Northern Flicker »

tomd37 wrote: Thu Dec 17, 2020 9:08 pm If I am going to do it in 2021 or by 2022, should I consider going ahead and doing it this month anyway? My only concern might be the year-end reporting and what it is going to look like. I understand there will no longer be a year-end all inclusive year-to-date annual report, but rather four separate and not cumulative quarterly reports which will have to be retained for each year instead of one annual report to be retained.

I personally have a traditional IRA account, a Roth IRA account, and a joint taxable investment account with my spouse. My spouse has a traditional IRA account as well. In these accounts we invest in only three Vanguard mutual funds; Total Stock Market Index (VTSAX), Intermediate-Term Bond Index (VBILX), and Real Estate Index (VGSLX) if these matter in your comments. We reinvest any dividends in all the accounts and do not depend on those dividends to supplement our pension and Social Security income.
Do it after April 15, so if anything is wrong, like say cost basis info is lost or garbled in the conversion, or you cannot make an IRA contribution, you have the rest of the year to get things straightened out before the next tax season.

As noted, you lose functionality to have mutual fund dividends reinvested in funds other than the generating fund or the federal money market fund. You also cannot undo the conversion. You gain the ability to hold ETFs, and gain the ability convert index admiral shares to ETF shares at NAV for many funds. The minimum investment/balance requirement for Federal Money Market is waived. For many customers, these are good tradeoffs.
Risk is not a guarantor of return.
Broken Man 1999
Posts: 5827
Joined: Wed Apr 08, 2015 11:31 am
Location: West coast of Florida, inland on high ground!

Re: VG is nagging about transitioning account

Post by Broken Man 1999 »

hawkfan55 wrote: Fri Dec 18, 2020 9:05 pm I do Roth conversions and never have taxes taken out at the time of the conversion. In mid/late December, I pay my Federal Taxes for the year by selling the needed dollar amount and withholding 100% for taxes. Taxes paid in December through an IRA withdrawal are treated as if they are paid throughout the year. My understanding is that with the NEW platform, one cannot make a withdrawal and choose to have 100% of the withdrawal go towards Fed taxes. Is this true and are withdrawals to pay taxes treated as if paid throughout the year?
True, for your first question.

However, you can choose to send 99% to Uncle Sam.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go. " -Mark Twain
alex_686
Posts: 7837
Joined: Mon Feb 09, 2015 2:39 pm

Re: VG is nagging about transitioning account

Post by alex_686 »

Makefile wrote: Sat Dec 19, 2020 12:18 am Why any of that means you can't direct dividends between funds in brokerage? No idea!
The trick is that it is a internal transfer. You don't know the dividend that the fund is paying or the NAV of the fund you are buying until the day of. The trades have to be set up prior to the closing of the fund. If you are a external party you can't know this.

Technically the brokerage is a external party. Their could be a hack around this but I doubt that VG would be interested in pursing this. it is a rarely used complex function prone to errors. Then you have to have your representatives constantly explaining why you can do special trick between some funds - Vanguard mutual funds to other Vanguard mutual funds - and not others fund families or ETFs.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
BigJohn
Posts: 1952
Joined: Wed Apr 02, 2014 11:27 pm

Re: VG is nagging about transitioning account

Post by BigJohn »

climber2020 wrote: Thu Dec 17, 2020 9:14 pm
Gatto Bialetti wrote: Thu Dec 17, 2020 8:42 pm What's your take? Have you done this?
I'm ignoring it and will stay on the old platform as long as possible. Much easier and faster to do a Backdoor Roth on the old platform.
Why do you say this? Backdoor Roth (helping my daughter) as well as Roth conversions (for myself) take about 3 clicks and 1 minute to execute on the new platform.
"The greatest enemy of a good plan is the dream of a perfect plan" - Carl Von Clausewitz
buhlaxtus
Posts: 234
Joined: Wed Apr 20, 2016 1:55 am

Re: VG is nagging about transitioning account

Post by buhlaxtus »

Yeah, backdoor Roth is plenty easy on the new platform. I've done it a couple of times. The hard part was the first time when I had to learn what's going on with the 8606 - and that's nothing to do with Vanguard.
User avatar
vitaflo
Posts: 1519
Joined: Sat Sep 03, 2011 3:02 pm

Re: VG is nagging about transitioning account

Post by vitaflo »

Cheez-It Guy wrote: Fri Dec 18, 2020 3:09 pm So you relish being a barrier to progress for no good reason? It doesn't really matter whether you see it as "progress". You appear to see it as neutral, but your service provider would like you to do it so that they can progress. If you don't care, why make it more difficult for the organization from which you derive benefit? Quite puzzling.
Some people can’t convert. My wife is a FINRA employee so we cannot use vanguards brokerage but can use their mutual fund platform.

Because of people such as myself I don’t see vanguard ever closing the mutual fund platform. But I can see them taking away features (ie no customer support, can only sell, no buys, etc).
User avatar
nedsaid
Posts: 14381
Joined: Fri Nov 23, 2012 12:33 pm

Re: VG is nagging about transitioning account

Post by nedsaid »

alex_686 wrote: Thu Dec 17, 2020 8:54 pm Vanguard wants to retire its mutual fund only platform and move everybody to the brokerage platform.

Its is cheaper to run and maintain 1 system rather than 2. It is a much contested topic here but the writing is on the wall. Having been in operations I totally understand why Vanguard us doing this.
Resistance is futile, you will be assimilated.
A fool and his money are good for business.
User avatar
TomatoTomahto
Posts: 11917
Joined: Mon Apr 11, 2011 1:48 pm

Re: VG is nagging about transitioning account

Post by TomatoTomahto »

vitaflo wrote: Sat Dec 19, 2020 11:29 am Some people can’t convert. My wife is a FINRA employee so we cannot use vanguards brokerage but can use their mutual fund platform.
It never hurts to ask.

My wife’s employer’s compliance department was why we were in a “mutual funds only” account. We could not change ownership on that account to a trust on that platform, so we asked (well, we could have changed ownership, but Vanguard made it a royal PITA to do so). Unbeknownst to us, Vanguard had been added to the approved brokerages list, and they submit a feed to wife’s compliance department so no extra work for us. The transition was easy.

As it happens, we only use mutual funds anyway.
I get the FI part but not the RE part of FIRE.
User avatar
vitaflo
Posts: 1519
Joined: Sat Sep 03, 2011 3:02 pm

Re: VG is nagging about transitioning account

Post by vitaflo »

TomatoTomahto wrote: Sat Dec 19, 2020 12:13 pm
vitaflo wrote: Sat Dec 19, 2020 11:29 am Some people can’t convert. My wife is a FINRA employee so we cannot use vanguards brokerage but can use their mutual fund platform.
It never hurts to ask.

My wife’s employer’s compliance department was why we were in a “mutual funds only” account. We could not change ownership on that account to a trust on that platform, so we asked (well, we could have changed ownership, but Vanguard made it a royal PITA to do so). Unbeknownst to us, Vanguard had been added to the approved brokerages list, and they submit a feed to wife’s compliance department so no extra work for us. The transition was easy.

As it happens, we only use mutual funds anyway.
We did ask, no joy. As it is it doesn't much matter since the mutual fund platform is still around and kicking. We'll worry about it for real if it ever changes, but I would be surprised if it really does given Vanguards wishy-washy communication on it.
User avatar
Cheez-It Guy
Posts: 1333
Joined: Sun Mar 03, 2019 4:20 pm

Re: VG is nagging about transitioning account

Post by Cheez-It Guy »

vitaflo wrote: Sat Dec 19, 2020 11:29 am
Cheez-It Guy wrote: Fri Dec 18, 2020 3:09 pm So you relish being a barrier to progress for no good reason? It doesn't really matter whether you see it as "progress". You appear to see it as neutral, but your service provider would like you to do it so that they can progress. If you don't care, why make it more difficult for the organization from which you derive benefit? Quite puzzling.
Some people can’t convert. My wife is a FINRA employee so we cannot use vanguards brokerage but can use their mutual fund platform.

Because of people such as myself I don’t see vanguard ever closing the mutual fund platform. But I can see them taking away features (ie no customer support, can only sell, no buys, etc).
Yes, I understand. The comment you quoted was directed to the previous poster who indicated that changing was no big deal for him, but was going to wait until it was forced for reasons that were not explained.
Post Reply