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re: Just opened my first Roth IRA, now what?
Posted on 10/24/19 at 11:35 am to bayoubengals88
Posted on 10/24/19 at 11:35 am to bayoubengals88
Thanks
1
Posted on 10/24/19 at 11:41 am to Phate
I'm just reading through this (and yes realize it's an old thread) but saw some negativity on target date funds. I opened a Roth on my own in my mid 20s and am now early/mid 30s, it's a target date fund through Vanguard. Waht is the knock on those and why is that not suggested?
Posted on 10/24/19 at 11:52 am to WG_Dawg
quote:
it's a target date fund through Vanguard. Waht is the knock on those and why is that not suggested?
1) You can't get a target date fund that is 100% stocks. I think the most aggressive split is 90/10.
2) The bond percentage of target date funds increases as you get older without your control (which is exactly why many like it).
But I think the prevailing view of many people who know a little bit about that market is that you're ok with a 90-100% stock allocation into your 40s.
Short answer: They are not aggressive enough so you're missing out on early gains.
This post was edited on 10/24/19 at 11:53 am
Posted on 10/24/19 at 12:33 pm to WG_Dawg
I’ve posted links before on cons of target date funds. Just do a search and you’ll see why.
Posted on 10/24/19 at 1:17 pm to bayoubengals88
quote:
1) You can't get a target date fund that is 100% stocks. I think the most aggressive split is 90/10.
2) The bond percentage of target date funds increases as you get older without your control (which is exactly why many like it).
But I think the prevailing view of many people who know a little bit about that market is that you're ok with a 90-100% stock allocation into your 40s.
Short answer: They are not aggressive enough so you're missing out on early gains.
this is very helpful, thank you. I'm sure I can root around a little or ask Vanguard for help, but what exactly would be my best move in this scenario? Can I simply go into the fund on vangaurd's website and just, I guess for lack of a better word, change what kind of fund it is? Like change it from target date 20XX to something else? Or is it a complete overhaul where I have to sell out or shut down the existing fund then reinvest in a new one?
Posted on 10/24/19 at 1:51 pm to WG_Dawg
quote:You're going to have to sell your current fund, and select another one to buy.
Can I simply go into the fund on vangaurd's website and just, I guess for lack of a better word, change what kind of fund it is? Like change it from target date 20XX to something else? Or is it a complete overhaul where I have to sell out or shut down the existing fund then reinvest in a new one?
It'll probably feel like you're doing something "wrong", but it'll be fine
It's not too involved.
EDIT: See below. You can exchange funds.
This post was edited on 10/25/19 at 10:32 am
Posted on 10/25/19 at 10:20 am to bayoubengals88
quote:
Short answer: They are not aggressive enough so you're missing out on early gains.
Their fees are also higher.
Aggression and "early gains" are not necessarily correlated
Posted on 10/25/19 at 10:22 am to bayoubengals88
You can exchange on vanguard
Posted on 10/25/19 at 10:31 am to jimbeam
quote:Thanks, it's been too long since I've done it.
You can exchange on vanguard
Posted on 10/26/19 at 11:36 am to Danny Woodhead
quote:
Their fees are also higher.
yup.
if anybody wants to be a lazy investor and does not want to do too much research and wants a set it and forget it just put it into 1 of these 3
VIGAX
VTSAX
VFIAX
all have higher YTD returns than any TDF. VIGAX is at 27% on the year and i am in that one.
Posted on 10/26/19 at 2:29 pm to Ingeniero
quote:
. I know we're at a high right now,
In an ideal investing world, every day is a new high.
You should be emotionally ready for a drop (i.e. don't lose your shite and panic when it happens), but there's no reason, especially at your age and in this circumstance, to base your investment actions on planning for one.
Posted on 10/26/19 at 2:47 pm to Fat Bastard
VTI Vanguard Total Stock Market ETF. Similar to the VTSAX admiral shares without the $10k min initial investment.
Posted on 10/31/19 at 3:41 pm to Ingeniero
You are doing the right thing. I started at 26 fresh out of school and have maxed out the Roth each year in VTSAX admiral shares. 32 years old now and income got high enough that I have to do backdoor Roths each year, but it only takes about 20 extra minutes of work through Vanguard. I keep all of the Roth money in 100% stock. If you are self-employed, I'd strongly encourage looking into a solo 401K with Fidelity. That has REALLY allowed me to sock away cash and get my taxable income down. Duplicate all of this by 2X for the wife. Doing this stuff now is going to make you so incredibly happy (and free) in a couple of decades.
Posted on 10/31/19 at 6:03 pm to Tigerlaff
Does fidelity allow you to invest in whatever you want?
My solo 401k allows me to invest in anything other than normal disallowed transactions which are not many. Are you listed as the trustee and plan admin? I am. I mainly use it for real estate. It’s awesome.
My solo 401k allows me to invest in anything other than normal disallowed transactions which are not many. Are you listed as the trustee and plan admin? I am. I mainly use it for real estate. It’s awesome.
Posted on 10/31/19 at 8:13 pm to Ingeniero
Great job. Once you have allocation figured out I recommend dollar cost averaging $500/mo starting in January
Posted on 10/31/19 at 9:23 pm to Fat Bastard
quote:
Does fidelity allow you to invest in whatever you want?
Pretty much. I'm just in a total market index.
quote:
My solo 401k allows me to invest in anything other than normal disallowed transactions which are not many. Are you listed as the trustee and plan admin? I am. I mainly use it for real estate. It’s awesome.
Yes. It's great. I get an employee contribution and then also an employer contribution.
Posted on 11/3/19 at 12:18 pm to Tigerlaff
I’ve had great performance from:
VLISX, VSCIX and VMCIX in HSA and 529 plans. All at 0.04% expense. I like a mixture of short, medium and long term equity funds.
VLISX, VSCIX and VMCIX in HSA and 529 plans. All at 0.04% expense. I like a mixture of short, medium and long term equity funds.
Posted on 11/4/19 at 7:05 am to dovehunter
It's nice to see my thread is still going. I know it's not "right" to check your IRA on a weekly basis but I like to see the numbers on the screen (I don't overreact), and the $6k I put in VTSAX per this board's advice has grown a little 
baby's first investments
baby's first investmentsPosted on 11/4/19 at 12:06 pm to Tigerlaff
quote:
Yes. It's great. I get an employee contribution and then also an employer contribution.
absolutely!
Posted on 11/5/19 at 10:19 am to Fat Bastard
I believe most Admiral Shares only have a minimum investment of $3k instead of the old $10k. Very nice for us non-Rockefellers.
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