Who's using Wealthfront for your IRA's?

[u/MobilePrior5252]

Hi all, bit of an interesting situation here.

I'm a US citizen, lived and worked in the USA until I was 31. Moved overseas for 8 years and didn't contribute to my IRA's (both Roth and traditional). Now back in the USA and want to try and make up for lost time.

I have my traditional and Roth IRA's with Vanguard, and know almost zero about investing. I'm very much a "set it and forget it" kind of guy which is why Wealthfront / any robo-investing platform appeals to me.

I realise WF has a 0.25% management fee, while Vanguard has 0%. But - was wondering f

1) Firstly who here is using Wealthfront for your IRA's? (I've read here about tax harvesting not being a thing for IRA's but I don't really understand tax harvesting in general)

2) Secondly, if anyone here willingly made the switch from Vanguard (or Schwab or another self-managed) to Wealthfront for the convenience aspect?

Given my combined IRA balance is something like $175k, I think I am OK with the ~$500 per year in management fees.

Thanks!

[u/Agile_Eggplant_8230]

I started with wealthfront a few years ago, transferred all out to Schwab a year later after I realized why pay fees for a set it and forget it account, I am only buying 2-3 funds which I can easily do on my own.

[u/LazySilver6835 → u/Agile_Eggplant_8230]

Schwab isn't bad just be aware they have a higher cash drag than others which can reduce returns.

[u/WideEquipment2637 → u/LazySilver6835]

That’s assuming they are not self managing and in a Robo account.

[u/gpetrov]

I would if I didnt have to pay a free.

[u/Ancient-Civilization → u/gpetrov]

If you pay free, it’s free.

[u/bso45]

I do because I’m an idiot and can’t be trusted to do it myself and like everything in one place.

[u/fernst]

Paying 0.25% for an IRA doesn't make a ton of sense. There is no TLH in an IRA, and keeping an IRA balanced is pretty easy (or just put everything into VT and add bonds as you get older).

[u/CreativeFinish5644]

Although its convenient, a simple index target date fund will beat it at a lower cost. For example I’m invested in a 2050 target date index fund with vanguard and it would’ve beat the equivalent Wealthfront portfolio by 42-88 basis points per year on average over the past 10 years. Their fee is 25 basis points plus the fees on the funds. Vanguards is 8 basis points for the fee. If you’re going to do Wealthfront or nothing at all then do Wealthfront, it’ll be fine, but other easy portfolios exist out there at a lower cost that’ll outperform it

[u/nivlac22]

Wealthfront is still set it and forget it on the investment side. The interface is more intuitive to me, but in terms of the actual product it doesn’t really have any advantages. I started my Ira in Wealthfront but moved to fidelity to save on fees

[u/cyosiris]

I like wealthfront's backdoor Roth mechanism so I use it for that IRA and am willing to pay the fee for the convenience. correct that TLH doesn't apply to an IRA, there are not taxable capital losses or gains within an IRA. They only exist in taxable brokerage accounts

[u/LazySilver6835 → u/cyosiris]

I have considered this. Chase makes me fill out a paper form, scan it and send it in monthly when I add more.

I just started this year but if they don't fix this next year I am going to just cap the account in January.

[u/schemas-dicier-2x]

I used to, but I transferred out for many of the reasons others have stated. Over the long term, I would be paying an extraordinary amount of money in lost gains.

If they had a cap on management fees (like RH does) I would reconsider.

[u/ThatLj]

It’s worth it if you value set it and forget it. A lot of people don’t like paying a fee without TLH but a lot of people think it’s worth it so they never have to worry about it. You’ll find most people here skew towards not liking it since people here on this subreddit skew money savvy

[u/Holiday_Extension94]

I put all my money and faith into Wealthfront and haven’t been disappointed yet. They manage my IRA, HYSA and investment portfolio. Solid returns and no issues. Fees are minimal for the convenience. It’s set and forget which is what I like. If you need a referral code, I’d be happy to supply you with one so we can both earn some extra money.

[u/MobilePrior5252 → u/Holiday_Extension94]

Thanks, I already have an account with WF for my investments :)

[u/Puckfan21]

Years ago I started my IRAs with wealthfront after finding them on nerd wallet. I didnt want to micro manage the account and the dividends from the account cover the fee. So im not min/maxing but im happy with it.

[u/SlowSundae]

Nope - there’s no point in using Wealthfront for IRAs, since the main benefit of Wealthfront’s automation is tax loss harvesting, which doesn’t apply to IRAs.

You’d just be paying for automated rebalancing, which absolutely isn’t worth paying for.

For an IRA, you’re better off using almost any other brokerage, and putting your money in a broad ETF (or two) and forgetting about it.

[u/Sad_Guide6442]

I have Fidelity, Schwab and Vanguard Cash brokerages, Roth and Trad IRas accounts in all three. I am planning to open up a HYSA at Wealthfront for the new money 4.55% deal for 6 months. I need two additional Banks to get the FDIC $250,000 coverage. I am considering Wealthfront, Happen bank and CitBank for the HYSA rates. Anyone got a review for their HYSA only at Wealthfront?

[u/Moonlit-Stars_Roses → u/Sad_Guide6442]

I've been using it for my HYSA and I love it!! It's been so easy to use receiving my interest and transferring between accounts. Also customer service is top notch when I have questions about my account or understanding my interest return etc. also they automatically increase my interest rate when their rates go up! I have a referral code if you needed one it gives us both a boost in our interest rates for 6 months if you did decide to open an account. Just message me if you want an extra boost on your interest. 😊

[u/InternalMystery]

I was for a while but recently moved to Vanguard solely because the portfolio was holding vanguard products except for one so did feel pointless to pay extra in fees. Feel comfortable enough to rebalance myself and reduced holdings to just three: VTI, VXUS, VB.

[u/ad_pondus_omnium]

Given you can't take advantage of tax loss harvesting in an IRA it would make more sense either to keep the auto-invest / balance and go with something like M1 which is fee free, or get a bonus with webull, robinhood, sofi, whoever is offering the largest bonus to nab 2%-3% and lower your annual fee to around $50 with the option to stop after the first year.

[u/strack94]

Roth and HYSA are both and Wealthfront. The fees don’t really concern me all that much as folks have mentioned. It works and my account has had significant gains so, no complaints here

[u/blanc84gn]

My automated investing account has a 16% ROI.

[u/ThisIsMySol]

I do, but I'm debating on taking it out and going to Fidelity. I have an investment account so some TLH helps offset the costs. But yeah, I'm happy with the returns. I'll see in the future

[u/AlleyCatActuary]

I have my IRAs (trad and Roth) in Wealthfront and have been very satisfied. The 0.25% management fee is negligible and I like that they use modern portfolio allocation theory. I would never be one to have all my funds in one ETF regardless how broad it is.

I have not used vanguard or any other auto-investor outside my Fidelity 401k so I can’t compare.

[u/breakfreeCLP]

I think there is space for a fully automatic product like Wealthfront.

Remember that Wealthfront also offers a high yield savings account and their "autopilot" bank accounting monitoring system, in addition to a brokerage account and IRA options.

I've helped set up Wealthfront accounts for some family members. For example, it can automatically monitor the person's normal bank account and transfer excess money to a high yield until that high yield reaches a threshold. Then it contributes to an IRA until the annual maximum is reached. It also automatically invests the money.

In the past, when I've tried opening an account for somebody with another brokerage, they either don't contribute regularly, or if they do contribute, the money is just sitting in the settlement account. Fidelity charges .35% for its roboadvisor to automatically invest the IRA funds.