April 10, by Matt 85 Comments. Today I pulled the trigger and opened a Vanguard ROTH IRA. The contribution deadline for is April 15th , so if you move quickly you can open one up and fund for last year. After which, you can always fund the current year until that April 15th date every year.

Please note, if you decide to fund via Bank Transfer then you need the funds available today and the process creates a time stamp that shows your account open within the deadline, even though it might take a couple of days for the funds to show up on the other end. I may decide that this year I would rather deposit into a Traditional IRA or something else. I opened up an account for both Mrs Saverocity and Myself today, for my own account I was ready to pick some funds and get going with the investments.

This can be quite an aggressive move as you are faced with immediate asset allocation requests which I think is a little intimidating. Therefore if you are not certain where you want to allocate, but do want to set up the ROTH IRA before the deadline of April 15th then select the Prime Money Market Fund and park the money there whilst you consider which funds fit your needs. After you set up the account, you will then be prompted to set up online access.

I do recommend that you do all this now, and e-sign the forms required by NYSE etc regarding your accounts. The nice thing is that this is just Step 2 on the online access setup, so it leads you through this step without having to hunt for E-Delivery.

Vanguard funds are thought of as Passive Funds, and no Load funds by most people at least by me in any case. However it was news to me.

Best Brokerages to Open a Roth IRA Account - Cash Money Life

It is assumed that Short Term Capital Gains will be higher when a firm is traded Actively, since they will be liquidating positions more frequently. You can certainly see some that are a lot higher than this in the market with other firms, but I had always thought that this was something that you would never see with Vanguard.

Also note that these funds have a higher than the mean fee than other Vanguard funds. So if you are in Total Stock Market, and panic and decide to shift into Bonds then you cannot go back to the Total Stock Market Fund for the 60 day period, after which you can.

It is worth noting that you can always exit and sell any position but they restrict you jumping back in, in order to discourage you jumping out. Despite a couple of quirky things as mentioned above, I think Vanguard is the best place to put your money if you are OK with rebalancing and asset allocation yourself for more on this subject see this post: Portfolio Rebalancing for Passive Investors.

Financial Product Reviews , Most Popular , Saverocity. Matt from Saverocity says. May 14, at Hey Ed, sorry I missed this comment. Active traders means people who frequently buy and sell positions.

Many of these swing traders will take the same stock, such as Ford and buy it and sell it when they think the timing is right. July 29, at 1: Great post thank you. Began the application process and it seems that they do require you to select at least one fund before you can open the brokerage account for etf trades etc..

I assume one of their dollar funds star fund, target retirement date etc. August 1, at September 1, at Look forward to your post. I was told this by a Vanguard rep when I called about the apparent disparity between your 3rd and 4th screen shot.

I saw no option to add VBS to the existing Roth account online. From what I understand, a second Roth account is required due to VBS being structured as a separate entity from the mutual fund company.

I have successfully made ETF trades in the brokerage account to supplement the Target Retirement Fund. I have not yet transferred money between the accounts. I also had to manually add the electronic delivery option to the VBS account. Ah I see, excellent news!

The disparity in this post comes from the fact that I opened up two accounts here, one for me and picked my asset allocation at time of opening, and one for the wife. The good thing with the Brokerage account is that you can trade those Vanguard ETFs fee free, so they do allow access at an earlier level to investors with smaller portfolios. September 5, at 5: I, too, am planning to open a Roth IRA with Vanguard and transfer an existing Roth ASAP from another custodian whose investment options and fees leave much to be desired.

Another argument against active trading in an IRA of non-Vanguard investments is that according to a phone discussion with Mr.

Chris Goudy at Vanguard a few minutes ago , any brokerage transaction fees are deducted from those precious and limited IRA assets. You cannot be charged for them separately. Even if they inherently offer a reinvestment plan, check with Vanguard rather than assuming that you will be able to use it.

If and when you have further investments in a taxable account and are looking at the big picture, many advise keeping as many of your taxable bonds, and other relatively high income producers, in your Roth as possible, to avoid taxable ordinary income.

The returns on long-term capital gains are taxed at a lower rate, so that the benefit of having them in an IRA is less. You may eventually reach the point where funds such as Wellington in the IRA, which comprise both stocks and bonds, are no longer the optimal choice.

September 15, at September 13, at 3: Thanks Cathy, glad it helps. Let me know if you have any other questions about the account I can help with.

September 20, at 7: I think for those who want to actively trade, a dedicated brokerage account would be better because they have better rates i. September 20, at 8: September 21, at Does the initial dollars minimum to open an account counts toward the maximum amount you can put into a Roth account? There is a way to do that that I outline here http: January 5, at 1: My experience with Vanguard with an inherited IRA was the worst I have ever experienced in over 20 years as a private investor.

What should have been a simple, slam-dunk transaction ended up as a formal compliance complaint, a complaint to the PENN state attorney general, and my attorney at the ready. Luckily, I documented every call, and they were on recorded lines. You would think that they would have enjoyed a new six-figure account. January 5, at To be frank, vanguard is as good and as bad as any other firm, they have the name in the market based on lowest fees and Bogles innovation of the Index fund but they are a firm like any other, which can spell trouble when you are dealing with something like you did.

I know you call it simple, but inherited assets can be complex, simply due to the complications that can arise when someone messes up. Hope you got it all straightened out now.

December 29, at 1: In addition to being laborious and time consuming, even when you pretty much fill in the blanks exactly as they ask you to on the QDRO, a lot of the agents are just plain rude. December 12, at 9: Any tips on how you were able to get your transfer completed, Amy? January 28, at 2: Very surprised to find so many positive review.

I spent 20 minutes trying to reach their human customer rep, who does not even understand what k rollover means… I immediately switched to tiaa cref. I am very happy to have made a good choice. February 18, at 2: March 26, at 2: Is this permitted for tax year if filing jointly with two income household and combined income under K?

April 16, at 4: I too am going to open a roth with vanguard…is this a better option than a traditional? You just missed the deadline for so you have just under a year to decide which is best for contributions..

May 7, at I was in the same quandary just a month ago, so wanted to share my experience too. I have a 5 year old k account, so I decided to go the Roth IRA way, to kinda diversify my future tax liability. Could not start a well diversified portfolio with Vanguard. So instead of investing in a single fund or saving up in a money market holding, I decided to open a Roth IRA with Wealthfront. No trading fees or exit fee either, really a big deal for a small saver like me.

I want my Roth IRA to round out my k, so I might move my IRA to Vanguard or a discount broker like Options House in the future. I will write up a review of Wealthfront shortly. May 27, at 1: Set up may be fine, but transferring from Vanguard administered qualified plan to another qualified plan has proven well-nigh impossible. June 19, at 2: I will be fine with my income for several years after retirement.

When I retired I have to transfer K account to Traditional or ROTH IRA. Which would you recommend? October 6, at When you say Betterment charges half that, that is misleading since their charge is for rebalancing.

This is an apples to oranges comparison. Not sure I agree with that. Can you explain what you get from management at Vanguard? I imagine it is asset allocation, with rebalancing. Which is the same as Betterment. I see neither as a financial advisor — but am I wrong?

Will Vanguard offer advice on paying your mortgage vs buying a fund, or talk to you about college planning? December 11, at 7: Do have an email or anything that I can contact you on? I have a few questions about Vanguard that I would like to ask you if you do not mind answering them of course.

I am torn between chosing a Roth IRA STAR with a risk level of 3 and Target Retirement Fund with a risk level of 4…Which would be recommended for just putting money away and not looking at it all for a few years? And which is going to get me better return in the event that I retire? December 14, at 4: Hard to predict the future, but to give you some understanding- in retirement the target date will be 65 bonds 35 stocks vs the STAR being 65 stocks 35 bonds.

Over time, the star will return more, but it will be more risky short term, as stocks fluctuate more than bonds. Depending on your age, Star might be better but as a rule of thumb target date funds tend to work well, especially when looking to put away for years to come. December 23, at 6: I am 30 years old and i want to open my first roth IRA. I just need a to start right? December 24, at 5: So I did, what I figured was the next best thing I could — I opened an account with Wealthfront.

If you cannot do that, I would recommend Wisebanyan for you — they have no minimums and no account management or transaction fees.

They are best out there for someone starting out, in my opinion, and the only catch is — you have to get on a waiting list. But I can help with that. If you send me your email address, I can send you an invite which will get you to the front of that queue.

I get some kind of "referral benefit", not sure what that is, never invited anyone yet. I do not work for any of the services I have mentioned — I have accounts with Wealthfront and Wisebanyan. So there is really nothing in this for me, if you are wondering. Welcome to the world of responsible investing — you are headed in the right direction.

December 27, at 7: If you have nonotrr investments then you could look at a target date retirement fund, that will get you started. January 8, at So I am just starting a Vanguard Roth IRA. I have no experience in this field. January 9, at 8: I opened a series of accounts with Vanguard— Vanguard has good products and a good website.

It also has a horrific bureaucracy. I tried to move an IRA from another investment house. This is day 59 and still they have been unable to execute that seemingly simple maneuver. The people on the phone really do not know what is going on with your money. If you use them, you have to watch everything they do because they screw up everything. January 23, at I absolutely second that. My adult children inherited an IRA from their grandmother and after three months I am still not sure if Vanguard has set up the accounts, though I know they received the transfer from the other custodian.

I spent over five hours on the phone with them just trying to get information as to what forms to fill out; the information given by three different reps turned out to be wrong. February 26, at 8: You know there is no paper check involved.

February 26, at 7: You mentioned that you transferred money into the money market fund, and then bought something else. But the money market fund also has the 60 day lock out period of when to sell. But then that locks me out of the old fund for 60 days. I understand the 60 day rule, but there really should be somewhere I can park cash in my mutual fund account without jumping through hoops.

March 11, at 3: I am 49 years old by the way. Thank you very much. It is hard to say what exact fund to recommend without knowing what else you hold, and what your goals and risk tolerance would be. However, I would suggest that a Target Date Retirement fund might be easiest for you. There are a bunch of funds at Vanguard, called target date , , etc… if you plan to retire in that is your target date and it balances a mix of stocks and bonds for you.

Should I buy individual stocks in my Roth IRA? : personalfinance

That is because it is intended to be less volatile in retirement. If you are aggressive, you can pick a further out fund, EG a target date , that will give you more stock position, you can still cash that in at any time.. March 12, at So if I have 3k to invest, do I do the STAR fund for 1k and the other 2k for a target fund? How do I split up my 3k that I want to initially invest?

Again- almost impossible to answer without knowing a lot more about you- but I would just do the target date fund. Note that it can lose value as can any investment. The strength is that it contains a mix of assets and ideally if one drops eg stocks the other eg bonds can repair the loss somewhat. The fund automatically rebalances itself in times like this, but still would see a short term drop. Thanks for the quick reply. Here is the basic info…I have a k with Fidelity for 40k and a State Pension plan when I do retire.

So my mix for retirement is the k plan, State Pension, Social Security doubt that will exist in and the Roth IRA…best option for an Roth IRA if you were in my shoes at age 49? How much money do you need from the Roth? If your pension is enough to cover your retirement needs then you could:. Not need to risk anything in your Roth so go very conservative.

If, however, your goals for retirement expenses are not met by your pension, what is the shortfall? That is a math question.

How much do you need per month in retirement from this Roth? And you then fit an investment around those needs. But maybe you need more risk than short term Govt bonds. You need your own numbers from your own expenses and future income. It can be done though, if you can figure out your retirement needs.

September 2, at 1: What would you recommend? In an inherited IRA, are you allowed to keep making monthly investments into it? September 2, at 8: Index funds are great for keeping costs low, so would be a good idea.

You cannot contribute to the IRA, its a standalone account. You can contribute to another IRA, inheriting one makes no impact on your ability to open another. You must distribute the inherited IRA.

You have 2 options: If you RMD this, you need the first payment distributed by Dec 31st after the year of her death. You need the IRS single life table for inherited IRAs for that. Alternatively, you can take a lump sum. If it was a traditional IRA, the income is taxable under the rule of Income in Respect to the decedent. There is a deduction against this, but only if her estate paid estate taxes only happens in larger estates.

If it was a Roth IRA and was opened for 5 years or more then the distributions are not taxable. May 24, at Matt , I hope this is a good idea and choice as far as what I choose above. Congrats on the new Roths! May 24, at 1: Thanks for super quick respond. We are 32 yo so I will be happy if we can retire in 20years to 25 years max. My husband already have deferred compensation through his work however I want to maximize our investment vs stashing cash on saving account. May 24, at 2: You need to look at everything all together- including the deferred comp plan and decide upon a mix of stocks, bonds and others that you feel comfortable with.

The index will likely gain and lose more than the target date funds… It really comes down to how much risk you need and want overall to achieve your life goals. July 20, at 6: Hi Matt, I am 28 years old and this past year decided it was time to start saving more aggressively for retirement.

I have no real experience in this field but I have a former classmate who works for Northwestern Mutual so I decided to open a Roth IRA through American Funds. It is in a target date retirement fund. I have noticed that I pay a sales charge of 5. Am I giving away money? After some research it seems to me I could start a Roth IRA with Vanguard or someone else and have my money work for me rather than giving a portion of it away and stunting my growth. Any advice you could give me would be great.

July 20, at 7: July 21, at August 9, at 3: My purpose is first, to draw down my RMD and the taxes, and second, to open a ROTH for both my children in their mid 30s. Would this be a wise plan? August 9, at 6: Also reducing your RMD and funding a Roth can be a good idea, but also, it requires looking at the tax brackets of you vs your children, again, likely to be a savvy move but times when it might not be. November 10, at 2: Also any input on American funds would be appreciated also.

Be getting raked over the coals for years and my own fault but clueless on this stuff. December 29, at 2: I will not keep more than a token amount of money at Vanguard however, because their customer service is inadequate.

Their phone hours are far too limited outside of East Coast business hours. Getting through to them during business hours recently has been beyond difficult. For example, after waiting an hour to speak to a person, that person transferred me to another department, where I just ended up in an interminable hold. What good is a brokerage that will not speak to its customers? June 1, at 9: I am a 20 year old college student who is looking to open up a Roth IRA and was wondering if you can recommend what company to go with and how to start the overall process.

My concern is what will happen to the money that I would have begun depositing in a Roth IRA account once my income surpasses the minimum amount. Whatever is in the account is locked in and safe other than the market movements of your investments nothing happens to it if you later earn more. June 1, at Congratulations on the early start. Unless you have good investing knowledge, I would recommend you start with a robo-advisor like Betterment or Wealthfront.

My personal favorite is WiseBanyan. If you have some understanding of the markets, you could look at Motif Investing, a really interesting concept for trading. Oh, sorry, I missed that part! August 31, at 4: Hi Matt, I currently have an traditional IRA with Vanguard, but am considering converting it to a Roth IRA.

I look forward to your insight. September 3, at 1: You can convert it all or part. October 14, at 4: I have questions myself:. My plan was to invest up to the point of the match into a Roth , and then max out a Roth IRA in either Vanguard or Scottrade still debating which one, what do you think?

I want laid-back, passive accounts so I have been considering focusing both my future accounts in index funds. The problem is, I am not sure how to research and analyze the best index funds and I was wondering if you could steer me in the right direction? Mutual funds are very expensive, so would I be able to do indexes alone to get solid returns?

With that being said, I have student loan payments every month on top of both retirement accounts so I am trying to eliminate my debt while bolstering my retirement; so I was wondering your thoughts on that as well.

I am just a kid trying to self-educate himself, so your insight would be beyond helpful for me. Any sources, insights, information, and advice you could provide me with would be genuinely appreciated! October 19, at 8: Sorry for the delay getting back to you. Typically, the k has stronger protections in terms of creditor, which makes it slightly better than an IRA depending on your state.

The student loan is a guaranteed rate of return — whatever you pay off from that is interest saved. November 2, at 9: I am actually meeting with the K guy at my company tomorrow. My last question is the following: November 2, at So overall, for my situation. I guess I am foggy on how taxes work with both accounts. Like what would you say is the best move for my case. Personally, I like to lower taxes when they are highest and receive taxable events when the bracket is lowest.

November 9, at 4: Just for a follow up I have decided to go with an Roth IRA, which I will max out for year before April. On top of that, I decided to go with a Traditional IRA with the company match, even though I will likely miss out on the match.

Thought that would be the best approach. I should receive tax credits for the form you sent me with my AGI, so I thank you for showing me that as well. Your email address will not be published. Notify me of follow-up comments by email. Notify me of new posts by email. Financial Product Reviews Financial Product Reviews - Saverocity. The Forum Personal Finance Investments and Savings Debt management Taxes The Blogs Home About Privacy Contact Subscribe Credit Cards.

My Experience opening up a Vanguard ROTH IRA April 10, by Matt 85 Comments Today I pulled the trigger and opened a Vanguard ROTH IRA. Opening a new Vanguard Account to hold the ROTH IRA is very simple: Ready to Invest and Allocate your funds right now? Vanguard Offers 3 Levels of Service for your Account Self Directed Accounts are managed by you, but do have access to support online and on the phone.

This is more of an advice line. An Investment Management Consultation, this will give you a chance to talk with a professional to examine all of your accounts and assets and form an investment plan with their guidance. A Managed Account — this is the highest level of service from them, where you basically hand over control of the account to Vanguard and they allocate accordingly, I tried to learn more about this from Concierge but he was a bit hazy, he mentioned that you might have to relinquish control of the account for a year at least to let these guys run it.

Personally that makes me a little uncomfortable. Fees for the service are 0.

Twitter Facebook Google LinkedIn. Comments Matt from Saverocity says May 14, at This was so helpful, thank you! Hi Tom, Yes it does. I feel your pain. They have jacked me around for 6 months. Hey Nick, Not sure I agree with that. Matt, Do have an email or anything that I can contact you on? Actually, disregard…I will just ask you on here … I am torn between chosing a Roth IRA STAR with a risk level of 3 and Target Retirement Fund with a risk level of 4…Which would be recommended for just putting money away and not looking at it all for a few years?

Hi John Hard to predict the future, but to give you some understanding- in retirement the target date will be 65 bonds 35 stocks vs the STAR being 65 stocks 35 bonds.

Hi, I am 30 years old and i want to open my first roth IRA. Thank you very much Al. Hope that helps a litle. Hi matt; Thank you very much! Matt, Thanks for the quick reply.

Thanks again for your time, appreciate more than you know. Well the questions you need to ask are: If your pension is enough to cover your retirement needs then you could: Hi Terry, Index funds are great for keeping costs low, so would be a good idea. Hope that helped, let me know if you have other questions.

What do you think about the choices I made? Matt, Thanks for super quick respond. Thanks in advance Eric. Hi Eric, yes you are being robbed blind. Get out of that and into Vanguard! The objective merits of Vanguard and its products are well documented. I have questions myself: Hey Kurdt, Sorry for the delay getting back to you.

Thank you for the reply! I have another URGENT question!! I also live in NY — incredibly high taxes. Thank you so much— Just for a follow up I have decided to go with an Roth IRA, which I will max out for year before April. Leave a Reply Cancel reply Your email address will not be published.

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