My wife and I are both going to open an IRA each this week for 2016 earnings, and would like to choose a company for it.

We currently have 403b accounts with TIAA-CREF, and their rep said they could do an IRA and that since they are non-profit, their costs were lowest one could find. (And not everyone can use TIAA-CREF, as it is just for educators and their families, I believe). In some ways, going with TIAA-CREF would be convenient, since we already have other accounts with them and can just use one login and access everything (though really, that's not that big a deal).

The other company I spoke to was Vanguard. I had been told they have low costs as well, and their rep said they had the lowest costs (so which is it, guys?). I may later want to also buy some index mutual funds and had always heard Vanguard had the lowest costs, so starting with an IRA through them may be good in this regard.

Is there anything obvious that would make or break this decision for me? I've been truly stupid with financial decisions and would like to start amending that, one step at a time, such as this choice. Thank you.

3 Answers 3


I use TIAA-Cref for my 403(b) and Fidelity for my solo 401(k) and IRAs. I have previously used Vanguard and have also used other discount brokers for my IRA.

All of these companies will charge you nothing for an IRA, so there's really no point in comparing cost in that respect. They are all the "cheapest" in this respect.

Each one will allow you to purchase their mutual funds and those of their partners for free. They will charge you some kind of fee to invest in mutual funds of their competitors (like $35 or something). So the real question is this: which of these institutions offers the best mutual and index funds. While they are not the worst out there, you will find that TIAA-Cref are dominated by both Vanguard and Fidelity. The latter two offer far more and larger funds and their funds will always have lower expense ratios than their TIAA-Cref equivalent. If I could take my money out of TIAA-Cref and put it in Fidelity, I'd do so right now.

BTW, you may or may not want to buy individual stocks or ETFs in your account. Vanguard will let you trade their ETFs for free, and they have lots. For other ETFs and stocks you will pay $7 or so (depends on your account size). Fidelity will give you free trades in the many iShares ETFs and charge you $5 for other trades. TIAA-Cref will not give you any free ETFs and will charge you $8 per trade.

Each of these will give you investment advice for free, but that's about what it's worth as well. The quality of the advice will depend on who picks up the phone, not which institution you use. I would not make a decision based on this.


I assume that with both companies you can buy stock mutual funds, bonds mutual funds, ETFs and money market accounts. They should both offer all of these as IRAs, Roth IRAs, and non-retirement accounts.

You need to make sure they offer the types of investments you want. Most 401K or 403b plans only offer a handful of options, but for non-company sponsored plans you want to have many more choices.

To look at the costs see how much they charge you when you buy or sell shares. Also look at the annual expenses for those funds. Each company website should show you all the fees for each fund. Take a few funds that you are likely to invest in, and have a match in the other fund family, and compare.

The benefit of the retirement accounts is that if you make a less than perfect choice now, it is easy to move the money within the family of funds or even to another family of funds later. The roll over or transfer doesn't involve taxes.


The fees for Vanguard and Fidelity IRA housing cannot be lower, because they are zero. Depending on the fund you invest in, one or the other will have pretty low fees and are often the lowest in the industry.

I don't qualify for TIAA-CREF, but my mother does and she loves them. She can call up and get some advice for free. I would not qualify it as the best advice in the world, but it certainly isn't horrible.

So it really depends on what you are looking for. If you want a little investment advice, I would go with TIAA-CREF. If you are a do it yourself-er go with Vanguard.

  • 1
    Thanks. Btw, it turns out you do qualify for TIAA-CREF, because your mother does. "Individuals may open an IRA product if at least one of the following criteria is met: ...A family member3 of anyone eligible to open a TIAA IRA".
    – Manbatton
    Apr 4, 2017 at 3:04
  • 1
    "I would not qualify it as the best advice in the world, but it certainly isn't horrible." - I saw this quote in one of their brochures as a customer testimonial. They are proud to be better than horrible. Apr 5, 2017 at 16:07
  • 1
    That is too funny @JoeTaxpayer
    – Pete B.
    Apr 5, 2017 at 16:38

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .