About a year ago I wanted to open a Roth IRA but didn't have the 3-5k it takes to purchase some of these funds. So I used 1k to open a Target Retirement Date Fund. My question is, should I just let this fund ride itself out until retirement or wait until it gets up to 3-5k and sell and purchase one of the better funds? And what are some of these better funds?

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Posted by Cold Cous Cous

Bucktown, La.

Member since Oct 2003

15045 posts

Posted on 2/19/14 at 11:35 am to tdavi48

quote:
About a year ago I wanted to open a Roth IRA but didn't have the 3-5k it takes to purchase some of these funds. So I used 1k to open a Target Retirement Date Fund. My question is, should I just let this fund ride itself out until retirement or wait until it gets up to 3-5k and sell and purchase one of the better funds? And what are some of these better funds?

Better for what? If you're planning on holding the money for 20+ years the VG target retirements funds are about as simple & cheap as it gets.

I think it's possible to ape the target retirement fund but get a slightly cheaper expense ratio by buying Admiral versions of the underlying funds which the Target funds hold. But to do this effectively you'd probably need a minimum of $50K or so, and to actually make the difference in price worth the headache you'd need significantly more than that.

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Posted by seawolf06

Member since Oct 2007

8159 posts

Posted on 2/19/14 at 4:09 pm to tdavi48

You could look for lower cost funds with similar or better historic returns.

Also, you don't have to buy a fund in order to add money to your Roth IRA. You can add $100 every month if you want to and then just buy the fund you want once you have enough in the account.

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