Author Topic: Vanguard VTSMX  (Read 2070 times)

cbr shadow

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Vanguard VTSMX
« on: October 22, 2012, 10:08:08 AM »
My wife and I are both opening Roth IRA's and plan on maxing it ($5000/yr each).  I was thinking I'd put them both fully into VTSMX Vanguard Index fund.. is that a good idea?
We both also have 401k's through our employers which we put ~10% of our pay into (both companies match 4%) and have 90% stocks 10% bonds in both of those.

We're thinking we'll both continue the 10% into the 401k and max the Roth IRA's w/ $5000/year/person every year.  Sound reasonable?  I just want to make sure I'm not doing something stupid here :)

Since it probably matters, we're both 29yr old and combined income is ~$150k right now.  We're getting close hitting the income threshold of $165k where you're not allowed to put into a Roth IRA anymore, so we want to take full advantage of it while we still can.

bo_knows

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Re: Vanguard VTSMX
« Reply #1 on: October 22, 2012, 10:15:25 AM »
If you're in to Total Stock Market funds, that's the way to go.  I am in VTSAX (the 10k+ version of VTSMX).

Quote
Since it probably matters, we're both 29yr old and combined income is ~$150k right now.  We're getting close hitting the income threshold of $165k where you're not allowed to put into a Roth IRA anymore, so we want to take full advantage of it while we still can.

You know that the income limit for this is based on your Adjusted Gross Income (AGI)? This means that if you contribute more to your 401k, you will lower your AGI.  Right now, you're contributing ~$15k/yr total it seems. Between the 2 of you, you can contribute $35k total next year.  As you close in on that income limit, you might want to choose maxing your 401k first.
Simulate your savings period and retirement to see if you're on track - www.cfiresim.com

JohnGalt

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Re: Vanguard VTSMX
« Reply #2 on: October 22, 2012, 11:21:19 AM »
Right now there, effectively, isn't a limit on roth contributions.  There is a backdoor way where you contribute nondeductible money to an IRA and then immediately roll it into a roth IRA. 

grantmeaname

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Re: Vanguard VTSMX
« Reply #3 on: October 25, 2012, 01:39:39 PM »
If you're willing to not retire/not buy a house for a couple years or work part-time for a couple years if the market goes all 2008 again, then VTSMX is absolutely your best choice.