Will investing in index funds protect me against paying too many fees?

I am going to retire soon and am pretty close to being debt-free. Should I put the vast majority of our money (one million dollars) in index funds to save thousands of dollars in fees? Or should I try to find something else?

Personal Finance, Investing, Peri-Retirement
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May 2017
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Index funds are a great foundation upon which to build your retirment nest egg. If you are investing on your own, I would argue that you should use index funds exclusively. If you engage an advisor, their core holdings should be passive. 

Be careful, though. Not all index funds are alike. There is still a wide range of fees. Mutual funds that track the S&P 500 have management fees that range from 0.03% to over 0.50%. Stick with providers that have a strong presence in the index space. Vanguard and Schwab are among the cost leaders in index funds today. While Schwab's in house index funds are not as extensive as Vanguard's, they've become a low cost player in the areas in which they compete.  You should'nt have to pay more than 0.10% for indexed equity strategies. 

In taxable accounts, you might want to consider using index ETFs rather than mutual funds. It's a technical point ... but you will likely find that your tax exposure is a bit less with ETFs than their analogous mutual funds. Good providers of ETFs include Schwab, Vanguard, State Street, and Blackrock. 

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