My wife’s Roth IRA currently sits at a TD Ameritrade account, where it’s been sitting for the last three or four years. With the majority of it in cash, mostly because we lost track of the account, we want to invest it in our retirement investment of choice, an index fund. Our index fund of choice happens to be the Vanguard 500 Index Fund because most of our retirement funds are with Vanguard. Vanguard does not have the cheapest index fund, I believe that title now resides with Fidelity’s Spartan 500 index. Paying the extra 0.08% seems reasonable considering we can manage it all in one place.

The only downside about this entire process is that TD Ameritrade has a $75 outbound full account transfer fee. Fortunately Vanguard does not charge you to transfer in an IRA (to my knowledge, no one does).

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Another year, another Smart Money broker survey! We’ve been reviewing SmartMoney’s best broker series for several years now (here’s 2008) and it’s always valuable to see how the different brokers fare from year to year. In the 2009 broker survey, we didn’t see too much change compared to 2008.

Unlike last year, which featured a merging of the discount and full service broker lists (in which TradeKing lost a #1 ranking they enjoyed for several years), they didn’t make any big changes to the way they analyzed the brokers. (here’s the list if you want to take a peek)

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One of the most frequent questions I get is “Where should I open an IRA?”

Short answer: Anywhere, just open one! If you want mutual funds, open an account with the company that offers the funds you want, like Vanguard, Fidelity, etc; because they will let you buy and sell the funds for free. If you want stocks, open an account with a company that offers the lowest fees.

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In the latest issue of Kiplinger’s Personal Finance, they rated a dozen discount brokers on a variety of factors including commission, research & tools, fees, investment options, “easy of use,” and customer service. The results were pretty close to the results of Smart Money’s 2008 ranking of the best discount brokers.

Kiplinger’s Best Discount Brokers

1. Fidelity
2. Charles Schwab
3. Muriel Siebert
4. TradeKing
5. E*Trade
6. OptionsHouse
7. TD Ameritrade
8. WellsTrade
9. Firstrade
10. OptionsXpress
11. Zecco
12. Scottrade

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It’s always fun to see discount broker rankings. Last week, I wrote about a little preview to the SmartMoney 2008 Broker Survey in which SmartMoney released some preliminary results from their annual ranking of brokerage firms. SmartMoney has published the full details of their report and I’m sad to say that TradeKing did not retain the top spot they enjoyed the last two years (third place isn’t bad!).

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Smart Money reviews brokers every single year and they recently just gave a preview to their results. Rather than give the straight ranking, they discussed some headline categories (Commissions & Fees, Research, Trading Tools) and then listed the best and worst from each category.

For best commissions and fees, they listed Interactive Brokers, a brokerage firm I hadn’t heard of but does charge pretty rock bottom fees (half a cent per share on equity trades). They also showed the spread was anywhere from $4.95 for TradeKing to $112.50 for Fidelity on broker-executed trades.

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Need to absolutely reach your brokerage right now? Here’s a handy resources of all the brokerages I am aware of, their phone numbers, hours of operation, and a link to the brokerage’s contact page. On that page you’ll usually find a Fax number, overnight mail address, regular mail address, email addresses, and sometimes even an online chat. In many cases, there are multiple telephone numbers listed, I chose the one for existing brokerage clients (if that’s not what you need, just hit up the link and you’ll find the whole list).

Did I miss your brokerage? Let me know and I’ll add their phone number.

My Roth IRA is with TD Ameritrade and this morning I received an email, included below, from TD Ameritrade CEO Joe Moglia in which they explained that unauthorized code gave someone access to a database that included email addresses and social security numbers. It’s the social security number part that scares me but as long as you’re on top of your credit reports (you get free ones each year), it should be okay.

I also noticed an uptick in unfiltered spam to my Gmail account linked to this TD Ameritrade account early this week and didn’t make a connection to any external accounts because I generally don’t use that Gmail account for anything other than friendly correspondence. This underscores the importance of having multiple email accounts for your important correspondence so you can get a better indicator of list selling and breaches before they’re announced. For example, if I always had TD Ameritrade correspondence sent to a Gmail account and ONLY that Gmail, any spam there would indicate some sort of list selling or a breach.

Is there much anyone can do about this? Like any other breach, nothing except be diligent in your review. What is comforting is that TD Ameritrade’s Asset Protection Guarantee, which protects your principal from things outside your control such as breaches, will cover everything if something happens.

Email included after the jump.

Let me tell you why I am sending you this email. While investigating client reports about the industry-wide issue of investment-related SPAM, we recently discovered and eliminated unauthorized code from our systems. This code allowed certain client information stored in one of our databases, including email addresses, to be retrieved by an external source.

Please be assured that UserIDs and passwords are not included in this database, and we can confirm that your assets remain secure at TD AMERITRADE.

What we want you to know:

* Once we discovered the unauthorized code, we took immediate action to eliminate it. We are confident that we have identified the means by which the information was accessed and have taken appropriate steps to prevent this from reoccurring.

* You continue to be covered by our Asset Protection Guarantee, which protects you and your assets from any unauthorized activity that may occur in your account through no fault of your own. If you lose cash or securities as a result of such activity, we will reimburse you for the cash or shares of securities you lost.

While Social Security Numbers are stored in this particular database, we have no evidence to establish that they were retrieved or used to commit identity theft. (emphasis mine) To further protect you, we have hired ID Analytics, which specializes in identity risk, to investigate and monitor potential identity theft. ID Analytics provides identity risk services to many of the country’s largest banks and telecommunication companies, as well as government agencies. Following its initial evaluation, ID Analytics found no evidence of identity theft as a result of this data breach. We will retain its services on an ongoing basis to support your TD AMERITRADE accounts and to monitor for evidence of identity theft. We will alert and advise you if any is found. As always, we encourage you to remain alert in guarding your personal information, regularly review your account statements and monitor your credit activity from the major reporting agencies.

I just received an email from Zecco that they’ve lowered their minimum balance from $2,500 to $0. I still haven’t opened the account (and provided a review) like I said I would, a bit busy lately with some other projects and haven’t had a chance to dig up the necessary documents, but I still plan on doing it. Those who want to trade on margin, a risky endeavor, will have to have a minimum balance of $2,000.

For comparative purposes, TradeKing requires no minimum balance, ETrade requires a minimum balance of $1k, TD Ameritrade requires a balance of $2k, and Charles Schwab requires a balance of $2.5k.

I’m not yet advocating you open a Zecco account, I haven’t myself, but their offering is getting more and more tempting.

Do you have a Roth IRA? If so, excellent job, you’ve already done one of the best things you could probably do to ensure you have a financially viable retirement. If not, why not? If your excuse isn’t, I make more than $110,000 and thus am not allowed to contribute, then your excuse is not good enough.

Don’t have enough time? It takes literally fifteen minutes. Do it while you’re watching American Idol or CSI: Saturn. Fifteen minutes. You spend more time getting dressed in the morning. Go to Vanguard, or Fidelity, or TD Ameritrade, or Etrade or your favorite brokerage firm. (I even linked to the Open Account page to save you a few seconds)

Don’t have enough money? Did you know that if you contributed $4,000 (max for 2006 and 2007) right now and it appreciated at a mere 7% for the next twenty years, you would have $15,478.74? While that doesn’t sound like a lot of money, 7% is a relatively conservative number for your investments. If you were to instead use 11%, you’d have $32,249.25. If you were to stretch the time out thirty years at 11%, you’re talking $91,569.19 – all from a single $4,000 contribution right now.

Now, ignoring all those crazy appreciation numbers, remember that you don’t have to contribute all $4,000. You can contribute $1,000 or $100, but you need to contribute something. (I’d argue that you want to contribute as much as you can to avoid low balance fees but $1,000 is better than $0)

Afraid you’ll need the money? Since your Roth contributions are after-tax contributions, you can withdraw those contributions whenever you want. Dire emergency and you have no choice but to raid the Roth? You can still do it. You can still change your mind.

Opening a Roth IRA is ridiculously easy and it’s not something to be afraid of. Don’t be afraid you don’t have enough money and instead challenge yourself to find a way to save a hundred bucks a month and at the end of the year you’ll have $1,200 saved away (worth $27,470.76 in thirty years at 11%) that you didn’t think you had. You have until April 16th to file your taxes this year so you have until April 16th to open up a Roth IRA and contribute to it for 2006. Go! Do it!