Suggest me a Vanguard index fund? Should I even put money in..? - Page 3

prohornblower · #21 07-22-2007, 12:43 PM

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Would it be a bad idea to put like half into a retirement fund and half into the total market index. Or put half into retirement fund and 1/4 into total market index and 1/4 into the the total international stock market?

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If you're strictly talking Roth IRA, this isn't possible right out the gate. The max. contribution in 1 year is $4K, and the minimum on all but the STAR fund is $3K. Basically for the first year just use Tartet Retirement. In year 2, when you have 4-8K in there, you can begin to divvy up a bit if you choose (3k, 5k) or (3k, 3k, 2k STAR) whatever...

SubaruSTiMike · #22 07-22-2007, 03:25 PM

I might just not do the Roth IRA since many places charge 30 a year for that service. If anyone know a place that lets you open a free IRA, that would be great. I'm not sure if I want to be charged 30 dollars a year if I gain so little from the return.

prohornblower · #23 07-22-2007, 05:36 PM

Not doing a RothIRA because you don't want to pay a $30 fee would be a monumentally poor choice. At your age, the RothIRA is the best investment you can make.

ACPlayer · #24 07-22-2007, 10:21 PM

Use Vanguard, sign up for the e-service package and there are no annual fees. Vanguard eservice link

SubaruSTiMike · #25 07-23-2007, 03:51 AM

Well see the thing with Roth IRA is it's good for retirement when I'm 65, but my goal and plan is maybe try to retire earlier or enjoy some money earlier in life. 65 is really old..too old to do fun things I think. I know it's tax free after age 65 and it's great how you can allocate funds to where you want, but the bulk of my investment will be invested in things where I can liquidate my assets to move into real estate or some type of self perpetuating business. Or other investments I can enjoy.

Now I don't know everything about Roth IRA, but if I can do all that and still be in the account, then plans will change.

ACPlayer · #26 07-23-2007, 09:39 AM

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Well see the thing with Roth IRA is it's good for retirement when I'm 65, but my goal and plan is maybe try to retire earlier or enjoy some money earlier in life. 65 is really old..too old to do fun things I think. I know it's tax free after age 65 and it's great how you can allocate funds to where you want, but the bulk of my investment will be invested in things where I can liquidate my assets to move into real estate or some type of self perpetuating business. Or other investments I can enjoy.

Now I don't know everything about Roth IRA, but if I can do all that and still be in the account, then plans will change.

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That is your decision. I put the max into my IRAs

prohornblower · #27 07-23-2007, 01:03 PM

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Well see the thing with Roth IRA is it's good for retirement when I'm 65, but my goal and plan is maybe try to retire earlier or enjoy some money earlier in life. 65 is really old..too old to do fun things I think. I know it's tax free after age 65 and it's great how you can allocate funds to where you want, but the bulk of my investment will be invested in things where I can liquidate my assets to move into real estate or some type of self perpetuating business. Or other investments I can enjoy.

Now I don't know everything about Roth IRA, but if I can do all that and still be in the account, then plans will change.

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I don't know how many times I need to say this but you can take out your Roth IRA "Contributions" at any time for any reason tax and penalty-free. So if you want to begin taking out retirement money at 55, you'll have (55-20)*4K = $140,000 to draw from at that age. Actually more, because the minimum will go up from $4k as you age. For instance, I beleive next year you can put 4.5K in.

Granted, you will have to wait until you are 59-1/2 to take out the "earnings" (interest), unless you want to pay penalties. That far down the road, your earnings will be a way, way larger % of your portfolio, due to compounding.

Nomad84 · #28 07-23-2007, 06:30 PM

I also don't plan to wait until 59 1/2 to retire, but I'm still maxing out a Roth every year because I also have other savings that will bridge the gap between retirement and 59 1/2. I am putting 10% into my TSP (including government match), for one thing. I need to double check this, but i believe that at age 55 I will be eligible to take "substantially equal periodic distributions" or whatever it's called. Right now, I am not saving money for retirement in taxable accounts because all of my extra money is going towards a down payment, but in the future I will be saving money in three accounts. 10% total will continue to go to my TSP, which will be available at 55. The max will go to a Roth IRA each year, from which earnings will be available at 59 1/2 and contributions will be available whenever I need them. The remainder of my savings will go to a taxable account which will be available whenever I want to get me through to age 55. Just because you plan to retire early doesn't mean you can't benefit from a Roth. You just have to determine how much money to put into each type of account so that your timing works out.

garyjacosta · #29 07-23-2007, 09:18 PM

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I need to double check this, but i believe that at age 55 I will be eligible to take "substantially equal periodic distributions" or whatever it's called.

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This is called a 72(t) and you can technically start it at any time. You must continue to take "substantially equal payments" for a minimum of 5 years and until you are at least 59 1/2.

But as was mentioned earlier, you can take your contributions out of a Roth, so that shouldn't be a problem

Nomad84 · #30 07-23-2007, 10:52 PM

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I need to double check this, but i believe that at age 55 I will be eligible to take "substantially equal periodic distributions" or whatever it's called.

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This is called a 72(t) and you can technically start it at any time. You must continue to take "substantially equal payments" for a minimum of 5 years and until you are at least 59 1/2.

But as was mentioned earlier, you can take your contributions out of a Roth, so that shouldn't be a problem

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Thanks for the info on the 72(t) withdrawals. I found the relevant info in IRS Publication 590, beginning on page 52. I haven't dug into it yet, but a quick google search seems to confirm that this rule applies to TSP accounts as well as IRAs.