VTSMX in Roth IRA vs Taxable account

[droh82]

Hello all,

I am very new to investing and have so much to learn. I just opened a ROTH IRA at Vanguard and put about $3800 into VTSMX (Vanguard Total Stock Market Investor Shares) for my 2013 contribution. I plan to contribute the remaining $1700 before the April 15 deadline to max my contribution at 5500 for 2013 and then I will go on to max my 2014 contribution so I can get the Admiral Shares version (VTSAX).

I had a few questions about Vanguard and VTSMX....

1) Just as I opened my Roth IRA, I began to read that VTSMX is better suited for taxable accounts, so I began to doubt my decision to pick VTSMX for my ROTH IRA. Is VTSMX good to have in a ROTH IRA?

2) I plan to open a taxable account after I max my 2014 roth contributions and was wondering... would it be a bad idea to have VTSMX (or VTSAX) in both my ROTH IRA and taxable account? If so, how should I go about this? Have VTSMX in taxable and choose a different fund for my Roth??

3) Also, I was looking though my vanguard account and saw that my dividends and capital gains were set at "Reinvest". I can change it to transfer to bank account/ vanguard fund /mail by check but not sure which is the best option for me. Any advise or suggestion on this?

[droh82]

Thanks for the reply and the links Knaak! I'll definitely make sure to read them.

And yes I do have a 401K through my employer; they match at 4%. I've been maxing my 401k contributions and will max my roth then go on to open a taxable account this year.

[Bateaux]

I've bought and held VTSAX for years and it has not failed me.

[TheHappyGoomba]

Hello all,

I am very new to investing and have so much to learn. I just opened a ROTH IRA at Vanguard and put about $3800 into VTSMX (Vanguard Total Stock Market Investor Shares) for my 2013 contribution. I plan to contribute the remaining $1700 before the April 15 deadline to max my contribution at 5500 for 2013 and then I will go on to max my 2014 contribution so I can get the Admiral Shares version (VTSAX).

I had a few questions about Vanguard and VTSMX....

1) Just as I opened my Roth IRA, I began to read that VTSMX is better suited for taxable accounts, so I began to doubt my decision to pick VTSMX for my ROTH IRA. Is VTSMX good to have in a ROTH IRA?

2) I plan to open a taxable account after I max my 2014 roth contributions and was wondering... would it be a bad idea to have VTSMX (or VTSAX) in both my ROTH IRA and taxable account? If so, how should I go about this? Have VTSMX in taxable and choose a different fund for my Roth??

3) Also, I was looking though my vanguard account and saw that my dividends and capital gains were set at "Reinvest". I can change it to transfer to bank account/ vanguard fund /mail by check but not sure which is the best option for me. Any advise or suggestion on this?

Hey Droh,

How are you doing? It's now 2018, and I am going down the same path as you - planning on opening my Roth IRA soon and investing in VTSMX which would eventually become VTSAX when I plan on hitting the 10k minimum in two years.