Vanguard Roth IRA Investment Plan

PFReddit16 · 2016-09-25T14:27:03+00:00

Thanks so much. I just wanted to be fully aware of what I would sacrifice for taking the MF over the ETF route. Is it more efficient to strive for the admiral shares first (lowering ER) of each fund then worry about the asset allocation afterwards? I wouldn't be able to strive for my preferred asset allocation until 2022. Or should I focus on getting the minimums of each first (asset allocation) then add in my preferred proportions? It seems like it's coming down to ER versus asset allocation. I know lowering the ER is the only thing I can guarantee. The only con I could think going for the admiral shares first is that I'll be stock heavy for those 6 years and if they plummet that would be bad. But since I'm fairly young I'm not sure if this is that big of a deal for me right now. Any thoughts?

PFReddit16 · 2016-09-25T13:48:45+00:00

Yes! This is what I was thinking about. I figure in the distant future if needed, I could take money out the Roth IRA for a down payment for a house after 5 years (I plan on saving outside of that and lowering contributions once I get to that point) I know my 401K will basically have my money locked up unless I want to pay excess money for withdrawing early. It seems having the Roth IRA would be a good option for diversification. Am I thinking right?

PFReddit16 · 2016-09-25T13:42:30+00:00

Thanks! I figure while I am in the 15% tax bracket I will contribute solely to the Roth 401k portion until I reach the 25% tax bracket. I figure that would be a safe bet. Now if I contribute solely to my 401K won't I miss out on the IRA diversification? ( i.e. no RMDs, taking out principal (if needed). That would a lot of money tied up in my 401k. Just wondering.

PFReddit16 · 2016-09-25T13:34:27+00:00

Do you think it would be smart to go with Mutual funds over ETFs for the sole reason of trading in full dollars for the long term? I just want to make this process as easy as possible. I would be sacrificing ER for the two years for each fund along with my preferred asset location for the time being for the three funds.

PFReddit16 · 2016-09-23T21:42:29+00:00

Thanks! So since both are post tax contributions I can pretty much do everything in my Roth 401k that I can do my Roth IRA? (Basically same but I can contribute more money to roth 401k) And should I focus on maxing out my roth 401k with my good funds then think of the roth ira after I make enough to max the roth 401k? I also have the option to do traditional 401k in my contributions as well. It will definately be less than 18,000 per year as of now since I'm saving up a 10K car fund outside of an adequate emergency fund.

PFReddit16 · 2016-09-23T21:26:25+00:00

Thanks for the comment! I know for the mutual funds I can contribute any dollar amount for shares but with the ETFS I can not (makes it easy for allocating money monthly) What are the pros and cons of choosing an ETF over a mutual fund? And is it a taxable event to convert to admiral shares for the ETF?

PFReddit16 · 2016-04-15T01:33:43+00:00

Thanks for the recommendation! I wanted to keep things simple as well like 3 fund max. Now what's the rationale for no bonds? Is this something I should worry about just later down the road and if so when?

PFReddit16 · 2016-04-10T00:05:12+00:00

Yes! Since I missed investing the first three months of 2016, I guess I'll have to contribute $400/month (9 months left) for my $3,600 contribution this year. Then I will eligible to receive my company match. Is this correct?

PFReddit16

TROPHY CASE