Good afternoon everyone,
My GF and I have been learning a whole lot from here and the MMM blogs, often reading articles out loud so we can share in the learning.
Since I have been learning a lot about investments, I am now calling into question my current investments. I opened up this account specifically to ask about my current situation.
My current investments are as follows:
- TSP (Work Traditional IRA, no employer matching): ~$51k
- Roth IRA: ~$31k
The TSP account: I did not realize that the great expense ratio (~0.04%) and contribution limits were so high (~$18K per year). I have been very foolishly contributing only 10% of my pay for years, then for the last 3 years or so I have been putting in 20%. I really didn't know what I was doing, but figured savings was good. Knowing what I know now, I am currently on track contributing 57% of my pay to max my contributions out for the year.
The Roth IRA: Simply opened up a few years ago as another place to put extra money (I'm pretty frugal already). Once again, I opened it up just thinking it was better than adding more into my money market account. Now that I have a clue, I know the expense ratio is high (~0.88%) and I can't retire early off this, can't draw $ out until I'm old.
Now, after much MMM reading I believe that what I should have done instead of opening up the Roth IRA, I should have opened up a Vanguard account. This, however doesn't change what I have already done. I have thought about closing the Roth IRA, taking the penalties and using it to open my vanguard account, or just leaving it in place and starting over and opening a new Vanguard account. I'm a little unsure how to take the least amount of "hit" from this.
So, I don't currently see why I would need TWO retirement accounts, especially since my employer plan seems to be much better. Is taking the withdrawal hit by closing the Roth IRA as bad in this situation as I think it will feel to me when I actually do it? Is there a better way?
Once again, I have and will continue to learn heaps from this forum and blog. And a big thank you to everyone who has contributed to this forum/blog.