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I've finally got enough money coming in to start investing in my retirement. I just moved $5k for 2008 into a Vanguard Roth IRA and was hoping for suggestions on a good starting setup. Right now I've got all $5k sitting in Target Retirement 2040 (VFORX) but it seems like the general consensus around here is those aren't the best investment? What would be the best place to start?
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Jan 22, 2009 18:30
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Is there a strong reason to not just slap all of my regular taxable investment account money into a Vanguard Target Retirement Fund? I was looking at rebalancing my portfolio and was examining my asset breakdown across my regular Vanguard account and what was held by the VTIVX funds I have all of my my 401k/IRA/Roth IRA in and realized the asset allocation is pretty drat similar. I recognize the expense ratio difference is a concern, but my retirement accounts have been consistently beating my self-managed account over the last 5 years despite the similar breakdown which implies my laziness around rebalancing regularly is probably more of a detriment than the increased ER would be. I'm also considering it in part to soften my self-doubt around whether I'm doing investment stuff correctly which makes me worry I'm more likely to respond to market downturns like an idiot. In a similar vein, I have a Wealthfront investment account that I'd like to kill and move into Vanguard. Is just liquidating the account to cash and transferring it WF=>bank=>V a dumb idea for some reason I'm not aware of (total returns for the account are 0.01% right this second)? Is there a better way to do this move?
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Dec 23, 2016 21:17
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The amount of money across my taxable accounts is approx 85% of my net-worth, the other 15% is 10% 401k, 3% IRA, 2% Roth IRA which makes things extra confusing whenever I try to think about tax efficient organization. Everything is in Vanguard funds except for whats in Wealthfront. I do have money in both a REIT and a bond fund in my taxable account, which definitely demonstrates my lack of knowledge in this regard. Is the simple tax efficient solution here to move hold my non-stock funds in my 401k/IRA for tax purposes and holding stock in the taxable account and Roth? Regarding the purpose of the taxable funds, I am rather risk-tolerant, though that may be because I'm an idiot, since I'm also planning on taking 6 months to a year off work sometime around April now that my wife has finished her PhD and will start bringing in income. The amount of money in the taxable account is "should be able to fund our lifestyle off the returns plus her income" amount but not a "we can both retire forever" amount. Thats assuming I figure out how to competently run the investments for income of course, but since this was the long-term investing thread I was avoiding that aspect. I also have fun added complexities I can throw in like my wife being Canadian and me being in the process of applying for Canadian residency and 5% of our liquid net-worth actually being in Canadian mutual funds and retirement accounts through her. It seems like really I should just spend a day and blast some of my ADHD meds and read bogleheads for 14 hours until my eyes bleed and I sort of understand this stuff, its just really hard to know where to start.
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Dec 23, 2016 21:53
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Today I learned the Canadian equivalent of the Roth IRA, the TFSA is just hilarious. Basically all the same benefits regarding tax-free growth and withdrawals, same $5500 a year max contribution, same investment flexibility (I think? I need to look into this), but you can just take out money whenever the heck you want, there seem to be zero age requirements or income limits. Don't appear to be any methods for backdooring funds into it though. Unfortunately I figured this out because the USA of course doesn't give a poo poo and will claim taxes on any returns in that account, so it looks like my wife and I have to be super vigilant about never mingling any of our assets or it'll end up completely screwing her on the tax-efficiency. Great!
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Jan 4, 2017 19:03
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Leon Trotsky 2012 posted:You can take money out of a Roth IRA whenever you want as well. Just not investment gains. Yeah in a TFSA you can take out earnings as well tax free with no penalty at any time.
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Jan 5, 2017 04:08
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Follow-up backdoor Roth IRA question. If I expect my net income to drop significantly from 2016->2017->2018 I should wait to do the conversion from IRA->Roth IRA after my income has dropped because I am taxed on the conversion amount correct? Theres no benefit to doing it immediately that I'm missing?
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Jan 6, 2017 14:36
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baquerd posted:The conversion funds become available for withdrawal as contributions in 5 years. See roth ladder for early retirement types. Unfortunately nothing in this post makes any sense to me in a way that answers my question. Ok reread it a few times, I think you're saying one benefit of doing the conversion immediately is I will be able to withdrawal the contributions sooner? Everything in my traditional IRA is a 401k rollover, so I don't think that applies to me. I don't plan on touching anything in my Roth until retirement anyway since I have plenty in taxable accounts. Will read on roth ladders. pr0zac fucked around with this message at 18:16 on Jan 6, 2017 |
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Jan 6, 2017 18:12
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monster on a stick posted:Last I heard, Bogle's recommendation was age-10 in bonds. This is what I do. Bogle's recommendation is actually age in bonds, but theres lots of discussion on his forums about age-10 and age-20. The Vanguard Target Funds for instance, are pretty close to age-20.
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Jan 17, 2017 17:53
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alnilam posted:I'm going to be a bad boy and ask about short/medium term investing in the long-term investing thread If you're happy with 1-2% returns, I'd suggest looking at a CD instead since its guaranteed returns. Capital One pays 1.6% for a 3 year CD: https://www.capitalone.com/cds/online-cds/ Everbank pays 1.71% https://www.everbank.com/banking/cd pr0zac fucked around with this message at 18:41 on Jan 22, 2017 |
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Jan 22, 2017 18:38
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I'm talking lower risk, lower return investing with a 2-3 year horizon, for a chunk of money separate from my retirement savings that I expect to possibly want to tap into in the next 2-3 years.
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ShadowHawk posted:If you want a more conservative fund choice, you can always pick a target retirement with an earlier retirement date. Target Retirement 2030 for instance is much more conservative than 2050 with its current asset allocation. There's also the lifestrategy funds which are designed to let you choose risk level instead of a target date.
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Jan 23, 2017 14:40
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silvergoose posted:bain was running into the ground for pennies and then years later hey they're worth orders of magnitude more? Those are some conflicting thoughts you've got there.
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Apr 8, 2017 13:44
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oliveoil posted:That's if you're over 69 years, right? If I'm doing an early retirement at age 40, aren't things different? The retirement age for Roth IRA is 59.5. You could like, spend ten minutes reading the Wikipedia page and understand all this.
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Apr 8, 2017 21:51
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Went to finish consolidating my investments by transferring the remainder of stuff I have at Schwab over to Vanguard. Load up Schwab's page and the first thing I see: Vanguard must seriously be eating the classic firms' lunch.
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May 11, 2017 01:07
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pig slut lisa posted:r/financialindependence has a thread about aggressive asset allocation by young (or youngish) investors who got in the market after the last crash That discussion was what made me realize I'm actually a lot more risk adverse now compared to 5 years ago when I first started portfolio planning. Rebalanced to 30% bonds as a result and feel a lot more comfortable with that.
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May 16, 2017 21:14
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Ixian posted:How old are you or rather, how close are you to where you want to stop regularly working/contributing to retirement? I'm 33. The second question is significantly more complicated, but in short I'd like to be able to rely on my investments in the relatively near term.
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May 17, 2017 18:34
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Ixian posted:How did a discussion about good spending habits turn into a sociological circle jerk in the investment thread? Read Space Gopher's avatar red text for an explanation.
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Jun 27, 2017 17:58
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BEHOLD: MY CAPE posted:Warren Buffett has been an investor since like 1950 and while I agree with all of what you said about his exceptional qualities, one thing I like to point out is that he is now 86 years old, and even boring old index investors with no knowledge or skill would have accumulated hundreds of millions to low billions of dollars by living frugally (as Buffett famously does) and investing passively for the 70+ years since WWII An important thing to note while we're discussing Warren Buffet, he HIMSELF states passive index funds are the best way to invest, to where hes recently won a bet against a hedge fund manager over it. https://www.ft.com/content/758068c4-3762-11e7-bce4-9023f8c0fd2e
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Jul 6, 2017 14:35
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Michael Scott posted:This is great, thanks. I would like to be in management eventually. I will look more seriously at an MBA and continue to learn programming on the side to build my portfolio. I have a non-technology degree (economics) unfortunately. This discussion should be moved to a different thread, probably the newbie programming interviews thread. But my manager didn't go to college, and I know plenty of other people in tech who did not or who dropped out. Tech is one of the few industries you don't really need a degree to get a job. That said, it is easier with one, and considering you have a BS (though unrelated), a coding bootcamp is not a terrible idea, nor is getting a masters from a real university. I know people that have transitioned to tech doing both as well. I don't think Ixian realized your undergrad degree isn't CS.
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Jul 6, 2017 15:54
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