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re: Thoughts on the Vanguard Target Retirement 2045 Fund (VTIVX)
Posted on 8/19/11 at 6:55 pm to urinetrouble
Posted on 8/19/11 at 6:55 pm to urinetrouble
Thanks for the info.
0
Posted on 8/19/11 at 8:19 pm to purpgoldblood
quote:
you pay Vanguard $25/fund/year to manage these funds, so the more funds you're in the higher the fees, as simple as that
I just got in on a Roth IRA from Vanguard last night with the 2050 fund - I waved the traditional mailings and opted for electronic delivery of all correspondence and this waived this fee.
This post was edited on 8/19/11 at 8:20 pm
Posted on 8/19/11 at 8:40 pm to lsu1208
is it a $1,000 minimum to start?
Posted on 8/19/11 at 9:00 pm to TheOcean
I think most are $3,000
Posted on 8/19/11 at 9:05 pm to LSUtoOmaha
so if I choose two funds to focus on and the minimums are 3,000 and 1,000 respectively, i'll need 4,000 to start?
Posted on 8/19/11 at 9:09 pm to TheOcean
Yes, the minimum amount is per fund. They are treated separately.
Posted on 8/19/11 at 9:11 pm to LSUtoOmaha
The target date funds are $1000 minimum. The rest of the Vanguard funds are $3000 minimum, I believe.
Posted on 8/19/11 at 9:14 pm to LSUtoOmaha
Now do the Roth's work the same as the Traditional in the sense that you get to choose your IRA focus?
Posted on 8/19/11 at 9:22 pm to TheOcean
Yes, the fund you choose is irrelevant to your tax preference.
Posted on 8/19/11 at 9:24 pm to TheOcean
lol, yeah.
Many people get confused....Roth and Traditional IRAs are not investments per se. They are merely vehicles that hold your investments and have preferential tax treatment, albeit different tax treatment.
Whether Trad or Roth, you still have to pick your investments within the IRA.
Many people get confused....Roth and Traditional IRAs are not investments per se. They are merely vehicles that hold your investments and have preferential tax treatment, albeit different tax treatment.
Whether Trad or Roth, you still have to pick your investments within the IRA.
Posted on 8/19/11 at 9:26 pm to JPLSU1981
so the max on a traditional IRA is still $5,000?
what's the best option for a 22 year old?
appreciate the help guys
what's the best option for a 22 year old?
appreciate the help guys
Posted on 8/19/11 at 9:27 pm to TheOcean
Yes, $5000 for under 50 years old. At your age you should probably do a Roth IMO, but if you want the current year tax deduction you can certainly do a Traditional and that's fine too. Just remember you won't be able to pull from a Traditional without a penalty before 59.5, but you can pull your contributions out of a Roth with no penalty (because it's already been taxed).
To keep it simple, just go with the Vanguard Target Retirement 2050 fund. It's a perfect one-stop shop, not to mention incredibly low fees.
To keep it simple, just go with the Vanguard Target Retirement 2050 fund. It's a perfect one-stop shop, not to mention incredibly low fees.
This post was edited on 8/19/11 at 9:30 pm
Posted on 8/19/11 at 9:29 pm to JPLSU1981
Roth or Traditional?
Posted on 8/19/11 at 9:29 pm to TheOcean
Yes, the limit for both is 5 grand, provided you make under $100,000 (approx) a year.
Do you plan to live on less money or more when you retire? Honestly, I would do the traditional IRA now because at least you know you get the tax break. I completely anticipate the government retroactively taxing ROTH IRA accounts in the future.
Like JPL said though, the Roth is nice because you can always withdraw the principal penalty free if you need to.
Do you plan to live on less money or more when you retire? Honestly, I would do the traditional IRA now because at least you know you get the tax break. I completely anticipate the government retroactively taxing ROTH IRA accounts in the future.
Like JPL said though, the Roth is nice because you can always withdraw the principal penalty free if you need to.
This post was edited on 8/19/11 at 9:30 pm
Posted on 8/19/11 at 9:31 pm to TheOcean
It's hard to say... you could hedge your bets and do $2500 to a Roth and $2500 to a Traditional and get the best of both worlds.
Assuming Roth's always stay tax-free earnings (and that's a big assumption), you'll most likely end up with more $$$ in your pocket in the Roth. And the flexibility of being to pull your contributions from the Roth makes it nice too, so it can kind of be used as a savings acct in a way.
Assuming Roth's always stay tax-free earnings (and that's a big assumption), you'll most likely end up with more $$$ in your pocket in the Roth. And the flexibility of being to pull your contributions from the Roth makes it nice too, so it can kind of be used as a savings acct in a way.
This post was edited on 8/19/11 at 9:32 pm
Posted on 8/19/11 at 9:33 pm to JPLSU1981
So in a traditional I will not be able to pull any funds?
Posted on 8/19/11 at 9:35 pm to TheOcean
You can, but the govt will charge you a 10% penalty if you withdraw before age 59.5.
The reason for this is because you get to deduct your contributions to Traditional each year, lowering your taxable income. So, basically, the government is allowing your money to grow tax-deferred, but they don't want you pulling from it til 59.5. The Roth on the other hand, money you put in has already been taxed, so they have no problem letting you pull it (the earnings are a different story, you'll get charged a 10% IRS penalty on a Roth as well if you pull out earnings)
It's a good thing and a bad thing. You really don't want to be pulling from retirement money in the first place, so it helps to stop you from doing that. But, that said, sometimes shite happens and you need money.... in that case, the Roth is definitely more flexible.
I'd go with the Roth. That's just me.
The reason for this is because you get to deduct your contributions to Traditional each year, lowering your taxable income. So, basically, the government is allowing your money to grow tax-deferred, but they don't want you pulling from it til 59.5. The Roth on the other hand, money you put in has already been taxed, so they have no problem letting you pull it (the earnings are a different story, you'll get charged a 10% IRS penalty on a Roth as well if you pull out earnings)
It's a good thing and a bad thing. You really don't want to be pulling from retirement money in the first place, so it helps to stop you from doing that. But, that said, sometimes shite happens and you need money.... in that case, the Roth is definitely more flexible.
I'd go with the Roth. That's just me.
This post was edited on 8/19/11 at 9:38 pm
Posted on 8/19/11 at 9:37 pm to JPLSU1981
Is there a penalty for the roth?
I might do half and half like you said. I'm a little worried about keeping a large portion of my money tied up until i'm 60
I might do half and half like you said. I'm a little worried about keeping a large portion of my money tied up until i'm 60
Posted on 8/19/11 at 9:39 pm to TheOcean
only time you'd pay a penalty in a Roth is if you pulled earnings out. They'll let you take out your contributions because it's money that's already been taxed. Just don't pull your earnings.
Half and half is the ideal way to go. You're set up to benefit no matter what the IRS and tax situations are in the future.
And it is worth pointing out this about a Roth: EARNINGS ARE TAX-FREE (of course as long as you don't pull them before age 59.5)
In a traditional, everything is merely tax-deferred. You still end up paying taxes on the full amount later on in life (contributions plus earnings).
Half and half is the ideal way to go. You're set up to benefit no matter what the IRS and tax situations are in the future.
And it is worth pointing out this about a Roth: EARNINGS ARE TAX-FREE (of course as long as you don't pull them before age 59.5)
In a traditional, everything is merely tax-deferred. You still end up paying taxes on the full amount later on in life (contributions plus earnings).
This post was edited on 8/19/11 at 9:41 pm
Posted on 8/19/11 at 9:40 pm to JPLSU1981
how much do I owe you for that advice
eta: should I just do the 2050 target for both?
This post was edited on 8/19/11 at 9:41 pm
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