Risk with just ONE Fund Family for Retirement

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Free2015
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Risk with just ONE Fund Family for Retirement

Post by Free2015 » Mon Oct 30, 2017 7:26 pm

Love Vanguard, but one of the risks I see is that all of our assets Tax and Retirement is in Vanguard. Lot of upside -- all centralized, keeps things simple

However there are some Risks (below) that keep me at night. Like to get insights, approaches, etc from current retirees on how they have managed these risks.

1. Your account gets Hacked into and wake up day and all the money is gone. Yes, Vanguard has a statement they will reimburse you for funds illegally removed. However, I do not want to be the first test case in that environment.

2. But beyond number 2 I see a risk where potentially the entire Vanguard system is hacked into and down for an extended period of time. And, all of your money is tied up in a cyber hole.

Considering to move funds to either Fidelity, Schwab or TR Price -- just in case either risk 1 and/or 2 occurs. Not putting all your eggs in one basket.

student
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Re: Risk with just ONE Fund Family for Retirement

Post by student » Mon Oct 30, 2017 7:29 pm

Personally I use two for my 403b accounts and a number of others for taxable accounts. As I get older, I want to consolidate but I do not think I will simplify it to one for the reasons that you have stated.

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Tyler Aspect
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Re: Risk with just ONE Fund Family for Retirement

Post by Tyler Aspect » Mon Oct 30, 2017 8:45 pm

Don't want to be paranoid, but when you submit a partial asset transfer from one fund family to another, your authorization form could be a lingering danger as an insider could replicate it with modified details. It's got your name, signature, medallion signature, and your old account details, etc. In this day and age you have to do everything super carefully!
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delamer
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Re: Risk with just ONE Fund Family for Retirement

Post by delamer » Mon Oct 30, 2017 9:45 pm

Those are both legitimate concerns. We have most of our assets at Vanguard, but a good portion at two other custodians also.

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Sandtrap
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Re: Risk with just ONE Fund Family for Retirement

Post by Sandtrap » Mon Oct 30, 2017 9:53 pm

I had the same thoughts awhile back and had accounts at Schwab, Vanguard, etc, etc.
Now, it's 99% Vanguard and all in Vanguard funds. And, very substantial amounts.
The benefits are enormous for me: wide array of index funds, trades at $2 for non vanguard, etc, etc.
If Vanguard, at 3 tril. plus. goes down, there will be bigger concerns to worry about.
Although. . . my emergency funds and short terms are not in Vanguard. . . . :shock:

jbow44
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Re: Risk with just ONE Fund Family for Retirement

Post by jbow44 » Mon Oct 30, 2017 9:56 pm

Sandtrap wrote:
Mon Oct 30, 2017 9:53 pm
I had the same thoughts awhile back and had accounts at Schwab, Vanguard, etc, etc.
Now, it's 99% Vanguard and all in Vanguard funds. And, very substantial amounts.
If Vanguard, at 3 tril. plus. goes down, there will be bigger concerns to worry about.
Although. . . my emergency funds and short terms are not in Vanguard. . . . :shock:
I agree but wanted someone more qualified to mention it.

Vanguard is so big, if it goes down your funds will be the least of your concerns, strange as it may seem.

delamer
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Re: Risk with just ONE Fund Family for Retirement

Post by delamer » Mon Oct 30, 2017 10:32 pm

jbow44 wrote:
Mon Oct 30, 2017 9:56 pm
Sandtrap wrote:
Mon Oct 30, 2017 9:53 pm
I had the same thoughts awhile back and had accounts at Schwab, Vanguard, etc, etc.
Now, it's 99% Vanguard and all in Vanguard funds. And, very substantial amounts.
If Vanguard, at 3 tril. plus. goes down, there will be bigger concerns to worry about.
Although. . . my emergency funds and short terms are not in Vanguard. . . . :shock:
I agree but wanted someone more qualified to mention it.

Vanguard is so big, if it goes down your funds will be the least of your concerns, strange as it may seem.
But that is not the same as your individual account being compromised.

mega317
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Re: Risk with just ONE Fund Family for Retirement

Post by mega317 » Mon Oct 30, 2017 11:42 pm

I personally think the risk of #1 is small enough to ignore. You have a very strong password and two-factor authentication. Plus to actually remove the money they will need a destination which has to be verified and you will be notified if that process is initiated.

For #2, it's helpful to have a little cash available elsewhere. I'm comfortable with my checking account that is usually between 1-2 months expenses.

However, anything that keeps you up at night is worth avoiding if possible. Life's too short to be tired and/or worried all day.

Wagnerjb
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Re: Risk with just ONE Fund Family for Retirement

Post by Wagnerjb » Tue Oct 31, 2017 7:38 am

delamer wrote:
Mon Oct 30, 2017 9:45 pm
Those are both legitimate concerns. We have most of our assets at Vanguard, but a good portion at two other custodians also.
Same here.
Andy

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jhfenton
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Re: Risk with just ONE Fund Family for Retirement

Post by jhfenton » Tue Oct 31, 2017 8:20 am

Once we get to retirement and are living off of our savings, I will want to keep some short-term cash to cover a few months expenses somewhere separate from the rest of our investments, just to cover us in the event our accounts are compromised or frozen. It could be something as simple as Vanguard (or whatever broker we use then) deciding that we're no longer living in the U.S. because we're traveling too much or the reports of our demise being greatly exaggerated--as the saying goes.

But beyond that, I will probably keep everything at one broker for convenience.

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dwickenh
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Re: Risk with just ONE Fund Family for Retirement

Post by dwickenh » Tue Oct 31, 2017 8:27 am

I keep about 1 yrs worth of cash at my rewards checking account(1.95% interest) The rest is at Vanguard in 2 roths, One TIRA, and one Taxable account. I do not worry about the hack as it could happen anywhere and anytime to numerous accounts. I just have a years worth of living expenses to ride out most of the possible problems. I also keep good hard copy statements of my accounts in a safe place.

To each his own,

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

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