Vanguard Roth IRA- STAR or Target Retirement

Hold old are you?

FWIW, I would start off in a STAR just to get your feet off the ground and start getting time in market.

Then when you have enough, buy into something like VHCOX or VSEQX

Continue contributing at a 30/70 or so into STAR/equity fund.


Then forget it.


IDK....you wouldn't be wrong setting and forgetting STAR....but I just wouldn't like the idea of being that highly invested in bonds for retirement goals.


FWIW, I only use STAR in my account for money I might pull out...emergency fund, down payment of my house, etc.

My retirement contributions are separate and in addition to whatever I put into the STAR, thus allowing me to use the tax advantaged status for day to day purchases without stealing from my retirement.



I do however use a Vanguard Target Retirement for my Roth 401k contributions though, simply because it is the best option offered.

quote:

---

When you buy stock on the LA lakers you know the coach, the players, the injuries and the opposing team,..... WTF would you bet the stock market?

---

LINK

If not a target fund, they'll surely have a total stock market or sp500 fund with very low ER

I would not suggest an advisor

Buy a target fund(mix of bonds and index of equities) or an index fund. This will consistently beat an active approach by an advisor

And you don't need to pay advisor to buy an index fund for you

What is the point of this?

Retirement Supplement/Emergency Fund?

If you need it, it's there, if you don't, Miller Time at 59.5?


Then yeah, STAR is an excellent choice of balancing return with volatility.

Remember though that you can only really take out what you put in with no penalty (which is a benefit in my case....I can take out earnings from the emergency fund segment tax free thanks to contributions to the retirement side) so its to your advantage to put a fair amount in.

Also, you are allowed to take out 10k of earnings tax and penalty free for the purchase of your first house.

quote:

---

Finally about to open up a Roth IRA and this question has come up. Now I am not an expert by any means but I am starting to learn. From what I can tell, STAR will provide a "safer" investment with a 60/40 split rather than the 90/10 split that a TR has. Both require a min $1000 to open as that seems like a good starting point for me. As a beginner, what would be the better option for me?

Sidebar question: Once I pick one of these funds and start to contribute to it, does it then act almost like a savings account where I simply put money into it and watch it or do I have to actively manage what funds it is going into? Basically an "I set it and forget it" kind of account?(hopefully that is not a stupid question )

---

I own these two in my Vanguard account. I don't think you have to sink $1000 all at once if you set up automatic contributions. I basically "set it and forget it" with these though I do log in regularly to double check my balance and rate of return. The funds are managed so no need for you to change anything unless you wish to change your allocations, switch to a new fund or to swap out of one and into another. TR automatically adjusts itself to become more conservative over the years.

quote:

---

Vanguard Roth IRA- STAR or Target Retirement

---

I read this as the other option being to become a door greeter for extra cash at Target post career.

The min is 1000 for star and targets

Sorry to OP for hijacking thread but....

Debating between putting some money for a long term investment into VFIFX (Target 2050 Fund) or selecting my own funds.

Was thinking ~35% in Small-Cap Growth Stock Fund (VEXPX), ~35% in Large-Cap Value Stock Fund (VWNFX) ~30% in International Stock Fund (VWIGX).

Any thoughts on going one way or the other? Selecting my own funds has historically better returns and is more aggressive, but also has higher expense ratios (~.5% for funds vs .18% for targeted fund).

TIA.