Need advise concerning IRA maintenace fees

[Guest jikk]

I have 2 education IRA's with less than $800 each and 2 Roth IRA's with

less than $3000 each. From this year the brokerage will charge a yearly maintenace fee of $35. These fees are waived if you have more than $100,000 in the account. I was not aware of these fees when I opened the accounts 3 years ago. These fees are very counter productive for people with lower incomes and those just starting out. All my IRA's are stock puchases which are significantly lower than when I bought them. Should I close the accounts or is it even possible to do that?

I know a lot of people who are on the same boat , slowly sinking unless those fee's are waived. Thanks in advance for the reply.

[John G]

Some ideas: First, if the IRAs are under the same name but at different locations you can choose to combine the accounts. Second, if you have other assets at the firm you can "ask" them to waive the fees... while waiving fees is becoming less common with firms that have seen their earnings erode, it surely doesn't hurt to ask. New fees are popping up with custodians that never charged any, but there are still many custodians that either charge no fee or a very small fee to win your business. If all of the accounts are with the same custodian, call them up and complain about fees. The noise makers sometimes get better treatment. Do some comparative shopping.

Closing an IRA is a messy proposition. It can be done, but most people have too complicated a circumstance for it to make sense. Do a search on "tax losses IRA" on this message board as the topic has come up dozens of times. While you might be able to close your accounts, perhaps a better stategy is to just absorb some down market lumps and write it off to your investment education. Think long term and don't get aggitated by short term movements in the market.

Finally, I am not sure that it makes much sense to own individual stocks when your total investable assets are less than 6,000. You are not going to be very diversified and the transaction costs are pretty high. Owning mutual funds would not innoculate you from a down market, but the diversification and transactions costs are more appropriate for initial investments.