Author Topic: Vanguard VTI transfer to VTSAX Roth  (Read 475 times)

benstagram

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Vanguard VTI transfer to VTSAX Roth
« on: August 01, 2018, 01:38:25 PM »
I currently have a Vanguard Roth IRA in VTSMX with $7,500. I also have $3,000 in VTI (brokerage account). I'm not planning on touching any of this until retirement, so I'm wondering if it would be best to move the $3000 over to the Roth? -I think that would allow would allow me to purchase VTSAX ($10,000) minimum. Since the VTSMX cost ratio is .14%, and VTSAX would be 0.04% would that make sense?

dandarc

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Re: Vanguard VTI transfer to VTSAX Roth
« Reply #1 on: August 01, 2018, 02:15:32 PM »
Is the VTI already in the Roth IRA? If not, keep tax considerations in mind - IRA contributions can only be made in cash, so you'd be selling the VTI, then contributing the $3K to your Roth IRA, then buying the VTSMX so you can convert the whole amount to VTSAX.

If you're OK with any tax issues related to the sale, and you still have room to contribute for your 2018 Roth IRA, then yes, I'd do that.

If the VTI is already in the Roth IRA, then I'd just go ahead and do that - simplicity and all.

benstagram

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Re: Vanguard VTI transfer to VTSAX Roth
« Reply #2 on: August 01, 2018, 02:29:52 PM »
Is the VTI already in the Roth IRA?

It's not, it's in a non retirement account which I haven't had open long.

jacoavluha

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Re: Vanguard VTI transfer to VTSAX Roth
« Reply #3 on: August 02, 2018, 10:39:45 PM »
You can’t “move” anything to an IRA. You make a contribution, in cash,  the amount of which has a yearly limit.

You should make a contribution to your IRA every year, to the maximum allowable amount.

MustacheAndaHalf

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Re: Vanguard VTI transfer to VTSAX Roth
« Reply #4 on: August 03, 2018, 02:38:21 AM »
What stops you from investing in VTI in both places?  In your Roth IRA, why not sell VTSMX and buy VTI?  Then you get the lower expense ratio of 0.04% without contributing more.

Also note a +0.10% higher expense ratio on $7,500 costs $7.50/year.  With only 5 months left in this year, that's $3.13 added expenses.  Are you sure selling VTI doesn't cost more than that?  If your VTI holding went up $17 before you sold, someone in the 24% tax bracket would owe $4 in tax.

Check the "cost basis" page of your Vanguard account so you know how much your holding of VTI has gained since you bought it.  My guess is that it's better to avoid paying taxes, and instead use new money to contribute to the Roth IRA.

And in the meantime, why not sell VTSMX and buy VTI in your Roth IRA?

benstagram

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Re: Vanguard VTI transfer to VTSAX Roth
« Reply #5 on: August 03, 2018, 06:47:21 PM »
I'm not sure if I'm doing something wrong, but when I try to bring up VTI in the buy section on my Roth account VTI is not listed as an option, it just brings up other funds that start with "VTI" like VTIPX, VTIMX etc...

My VTI holdings have gained $50 in the brokerage account thus far.

My thinking was to get all of it in my Roth because I won't be funding any more to the Roth as I'll be throwing as much as I can towards my 457.

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MustacheAndaHalf

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Re: Vanguard VTI transfer to VTSAX Roth
« Reply #6 on: August 04, 2018, 02:52:57 AM »
If you visit "Balances and holdings" and scroll down to your Roth IRA, there should be a menu item "Buy and sell" that includes "Trade Vanguard ETFs (and non-Vanguard ETFs)".  If you select that, there should be an option to enter "VTI" as the symbol on the buy/sell screen.

A long time ago some accounts were only enabled for mutual funds, but I think Vanguard has converted all accounts to allow both ETFs and mutual funds now.

If it still doesn't work, you might send a message to Vanguard from within your account asking about it.

benstagram

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Re: Vanguard VTI transfer to VTSAX Roth
« Reply #7 on: August 04, 2018, 11:36:27 AM »
Thanks, I was just looking at "Buy Vanguard Funds"

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