Fidelity IRA Match: Switch and They’ll Match Your Contributions Up to 10%

Fidelity has released an infographic [pdf] about the power of saving 1% more of your income:

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To coincide with this, Fidelity started a related promotion to entice folks to move over their IRA assets to them. The Fidelity IRA Match is designed to mimic the 401(k) contribution matching that many employers offer, where Fidelity will match between 1% and 10% of your future contribution for 3 years if you roll over $10,000+ to them. Valid for both new and existing Fidelity customers, but only for IRAs and not other account types. Here’s the breakdown:

Qualifying transfer* Match rate Estimated max benefit* (age 50+)
$10,000 1% $165 ($195)
$50,000 1.5% $247.50 ($292.50)
$100,000 2.5% $412.50 ($487.50)
$250,000 5% $825 ($975)
$500,000 10% $1,650 ($1,950)

 

* Qualifying transfers must be rollovers or transfers from non-Fidelity IRAs (Traditional or Roth). Rollovers from workplace savings plans are not eligible for this offer. Estimated max benefit is based on $5,500 annual contribution for three years ($6,500 for age 50+). Max benefit is set at $1,950.

It’s an interesting proposal. Keep in mind that many IRA custodians will ding you with an outgoing transfer fee if you move your money out. Also, Fidelity has other deposit promotions going on that offer a little less than the max payout here, but they are more straightforward bonuses.

To participate, you must register at www.fidelity.com/IRAmatch. If you do participate, I would like to point out the availability of their Fidelity Spartan Index funds, their Fidelity Freedom Index 20XX target-date funds which you can now purchase in an IRA, and their commission-free iShares ETFs. Fido has some good, low-cost products on their menu, but you may have to look for them.

Selected fine print:

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The Best Credit Cards For Millionaires Who Count Their Miles… and The Rest of Us

millThe sales pitch for American Express has always been that their cardholders are wealthy and thus big spenders, which in turn justifies their above-average transaction fees charged to merchants. The theory is a merchant won’t mind paying more in fees if it is offset by higher average receipts (and thus profits). This is why Tiffany & Co takes AmEx and my favorite Indian food truck does not.

However, this recent Bloomberg article suggests that American Express is losing their millionaires because they are actually doing the math on their credit card rewards and finding the perks are better elsewhere. The title in the Businessweek magazine version is “Even Millionaires Count Their Miles“. To which I say, of course they do!

As less-affluent consumers cut spending during the recession and a 2009 law known as the CARD Act limited lenders’ ability to raise interest rates and charge late fees, banks revved up their pursuit of customers with top credit scores who pay their bills on time.

The article quotes hedge fund manager Whitney Tilson, who switched from using American Express for 30 years over to the new Barclaycard Arrival Plus World Elite MasterCard (my review). He states:

The difference between getting 1 percent and 2 percent cash back is thousands of dollars and for that amount of money, Barclaycard has a better offer [...]

(I should mention that Tilson is well-known as a disciple of the Graham-Dodd-Buffett-Munger school of value investing. You would think value investors would know a good deal. :) Of course, you could also flip that as the largest shareholder of American Express is… Berkshire Hathaway.)

The problem is that the American Express Platinum used to be “the” card for affluent travelers because it got you into any of the airport lounges from all major carriers. But now if you want access to all American lounges, you need the premium Citi co-branded credit card. To get access to United lounges, you need the premium co-branded Chase card. And so on. AmEx even started building their own airport lounges, but so far there are only four of them. Nowadays, unless you redeem Membership Rewards for frequent flier miles and use them wisely, it is hard to get even 1 cent of cash for 1 MR point these days. Even a plain-vanilla rewards card will pay you 1% cash back and more importantly their direct competitor Chase Ultimate Rewards will get you 1 cent back or 1.25 cents towards travel.

Here’s the Bloomberg graphic of credit cards that cater to “affluent consumers”:

amexmil_small

I want to point out that the graphic is misleading because the AmEx gives a $200 travel credit every year while the Barclaycard $400 statement credit is one-time only. I do agree the Barclaycard at 2.2% back towards travel is good if you have travel charges that you redeem against, and the $400 upfront bonus counters the $89 annual fee.

Not mentioned in the article are two cards that I think are solid no-brainer cards for anyone. Both earn double the cash back from ordinary 1% cards and have no annual fee. Unless you are redeeming frequent flier miles for business class tickets or hotel points for luxury stays (which I try to do with part of my credit card rewards), it is unlikely you are getting more than 2 cents a point.

If you charged $100,000 a year, getting 2% instead of 1% would be an extra $1,000 a year back. Even if you charged $10,000 a year, that is an extra 100 bucks. You don’t need to be wealthy to appreciate simple cold, hard cash. Because there is no annual fee, I think everyone, including millionaires, should have one of these in their wallet.

Big Picture Financial Advice from Jonathan Clements

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Here is some "big picture" financial advice from author and columnist Jonathan Clements. I'd like to collect enough of these tips from notable people and make a compilation post. Clements recently wrote his last column "How to Live a Happier … [Read the rest]

AssetBuilder 2015 Annual Letter: Currency Effects and Interactive Returns Tool

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I enjoy reading articles by Scott Burns (also here) because he sometimes offers a unique perspective on things. He recently released the 2015 Annual Letter for his asset management company AssetBuilder. The whole thing is a good read, but here are … [Read the rest]

TaxACT Review – 2014 Tax Year Features and Screenshots

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Having already done my TurboTax 2014 review, here is my review of TaxACT 2014. (H&R Block is next week.) For all three, I will be comparing the far-more-popular online versions. Price TaxACT come only in two basic flavors: Free and Deluxe. … [Read the rest]

Sling TV Quick Review and Promo: Prepay 3 Months, Get Free Fire TV Stick, Free Roku Stick, or $50 off Amazon Fire TV

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Sling TV is now live and indeed allows you to stream a package of major cable networks live over the internet. I previously wrote about Sling TV from Dish Network when it was announced in January at the 2015 Consumer Electronics Show. Here is the … [Read the rest]

TurboTax Review – 2014 Tax Year Features and Screenshots

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Although I'm still waiting on some 1099 forms (*cough* TD Ameritrade), I've already got most of my paperwork in order for my tax returns. I plan on comparing the three major tax preparation websites again this year: TurboTax, H&R Block, and … [Read the rest]

Tax-Efficiency and Qualified Dividend Income Percentages

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Dividend distributions from mutual funds and ETFs are either qualified or non-qualified, and the difference could have you paying double the taxes. Qualified dividends are taxed at the lower long-term capital gains rate, which varies from 0% to … [Read the rest]

Costs Matter: Vanguard Long-Term Performance Update 2015

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The purpose of Vanguard's commitment to low-cost investing is not just to be cheap, it is to give their clients higher performance. Whenever a money manager charges higher fees for themselves, they will have to compensate by creating that much … [Read the rest]

Costco No Longer Accepting American Express in 2016

Starting in early 2016, you will no longer need an American Express card to pay with a credit card at Costco. Not earth-shattering news (although I do buy a lot of stuff at Costco), but as a credit card geek I thought some of the details that came … [Read the rest]

Chart: Vanguard Low-Cost Philosophy At Work

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The debate between active and passive investing has come full circle. We've officially gone from "index funds will never work!" to "index funds are working too well, it can't keep on going". Check out the Forbes article Is Vanguard Too … [Read the rest]

Comparing Your 529 In-State Tax Deduction vs. Better Out-of-State Plans

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I'm getting ready to put down a decent chunk of money into a 529 college savings plan, which means lots of research as there are a lot of options and nuances. A general plan for those without strong investment preferences would be to go with one of … [Read the rest]