If you want to be mildly outraged, compare your 401k program's S&P 500 tracking fund's fees with Vanguard's. Depending on your company, it can be more than 20x the cost, for a fund that requires minimal oversight.

My coworker at an old job did exactly that: found a matching Vanguard fund with nearly identical funds to our 401K. It had 1/6th the fees and that company lost a significant amount of my money. The tax benefits of the higher tax free cap for 401K's versus just having an IRA were definitely not made up for by how poorly my 401K's investments went.

tl;dr: open an IRA, buy Vanguard

With the caveat that if your job does any 401k matching, you should take advantage of it. Automatic 100% return is hard to beat.

(And then if you switch jobs, roll it over into a Vanguard IRA.)

I would also add: save more. Yes, reducing fees is important, but equally important is simply increasing the amount you put away.

Vanguard offers 401ks and Simple IRAs for companies to make available to their employees. Fidelity and Schwab also have low cost plans.

If your company has you in a crappy retirement ask them to change!

I personally use Charles Schwab (just because I have my bank account with them) and Wealthfront to invest in ETFs.

Schwab is comparable with Vanguard in terms of fees and ETF availability, so I never bothered with opening up an extra account at Vanguard.

I use Wealthfront to diversify my ETFs. They take care of distributing the money I put in the account among several areas of the market (U.S. Stocks, Foreign Stocks, Emerging Markets, Dividend Stocks, Natural Resources, Municipal Bonds and Cash).

They mostly use Vanguard funds. I could probably also do this myself, but I don't really want to manually balance my portfolio every time asset classes go up and down. So far I only put the amount of money in there that they manage for free. If you intend on signing up, one word of caution: I signed up on their homepage and had 10k under free management. If you sign up via a referral link, you get 15k. I'm still slightly annoyed that I didn't use one when opening an account. I know that it's against the usual HN policy to post them, but since it is detrimental to sign up without one, here we go: http://wlth.fr/196dDW2

(I'd check with my friends first to see if one of them is already on the platform)

p.s. this is US centric.

I've tried both Wealthfront and Betterment and found Betterment to be much more usable. It's out-performed Wealthfront in the past 9 months or so (but over the long-term my guess is that they'll both perform similarly) Have you tried both? http://danielodio.com/betterment-vs-wealthfront-which-one-wi...

I looked at both of them initially. As far as I recall, at least back then, the fee structure for people that initially only have a small amount of money invested (10k or so), Wealthfront was slightly better.

I also like Wealthfront's UI. Not that I'd do a whole lot besides click the "add more money" button and look at the graph. Turbotax import worked nicely too.

Looking at fees I think you will be better off at Vanguard if you have at least 10K. You can also get Vanguard Target Retirement with 1k and expense ration of 0.18.

There is an entertaining public fight going on between Wealthfronts and Schwabs CEOs about their robo-investor options. Once the big boys get involved I have a feeling Wealthfront, Betterment and others are going to feel the pinch. Schwab has their offering now with zero fees (except for those from the ETFs owned).

https://intelligent.schwab.com/

I have a test amount of money at Betterment now, but am researching about moving it to Schwab.

The best thing Vanguard ever did was drive down costs across the industry.

There are some downsides to Schwab's zero fee robo, from Wealthfront CEO's perspective: https://medium.com/@adamnash/broken-values-bottom-lines-3d55...

If you're going to post the argument, probably post both sides :)

http://www.aboutschwab.com/press/statements/response-to-blog...

These are the two posts I still have on my "read later" list. I assume both of them are pretty good compared to other options (stock picking, mutual funds, ...) :)

Schwab forces you to keep at least 6% of it in cash, which is an incredibly bad idea and does do significant damage to your long-term returns.

The rumor mill is that this is how Schwab makes profit instead of advisory fees.

Do you have any backtest links that show a small cash position 'is an incredibly bad idea'?

A small cash position is another diversification strategy. As your portfolio increases in value, taking some profits to cash and then having it available on the dips may be perfectly valid. Buffet himself has called cash the never expiring call option.

EDIT

Schwabs CEO defends small cash position.

http://www.aboutschwab.com/press/statements/response-to-blog...

How does this compare to target retirement funds?

As far as I understood, target retirement funds will switch the allocation from stocks to bonds once you get close to retirement. With the robo advisors, you'd have to manually move your risk tolerance downwards.

I personally would hate to have that happen in an automated way. I don't want the fund to automatically move over during an economic downturn. I'd rather have it happen while the S&P is at a new high :)

Yay Schwab!

If you happen to live in Sweden, i would recommend Avanza Zero[0]. Swedish index fund with no fees at all, not even courtage. (I do not work for Avanza or have any affiliation)

[0] https://www.avanza.se/vart-utbud/handel/avanza-zero.html

Swede & Avanza customer checking in. Can definitely recommend them. If you reside and Sweden, make sure to open a ISK, not an Aktie- och Fondkonto (stock & fund account).

Living in Germany and have not been able to find a bank with the same kind of service and reliability. Comdirect comes close, but not good enough for me to close my account with Avanza.

Vanguard is also fully mutualized, so their incentives are more fully aligned with yours.

I remember that this seemed very appealing when I first looked into a place to buy ETFs. I then opened the Schwab account because I really enjoy their checking account and they are, as far as banks go, pretty solid and not prone to screwing customers over.