Author Topic: All my pre-tax buckets are full, what next?  (Read 4895 times)

mozar

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All my pre-tax buckets are full, what next?
« on: August 04, 2015, 06:21:42 PM »
I have maxed my 401k (18k) and IRA (5.5k) and hsa (3.5k). I will have 2000 a month for the next 5 months to put somewhere. I think vtsax is admiral which you have to have at least 10k? Can I buy something else from Vanguard while I wait? I likely won't get to 10k until January. I just want some simple index fund. This will be my first after tax investment.
Thanks!

MoonShadow

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Re: All my pre-tax buckets are full, what next?
« Reply #1 on: August 04, 2015, 06:31:01 PM »
Vanguard's VTMFX would be a fine place to store your extra funds, if Vanguard is your preference.

johnny847

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Re: All my pre-tax buckets are full, what next?
« Reply #2 on: August 04, 2015, 06:34:19 PM »
Vanguard's VTMFX would be a fine place to store your extra funds, if Vanguard is your preference.

I fail to see how an admiral shares fund would help the OP's situation.


OP, stop worrying about the fact that you lack the capital right now for admirals shares. You'll get to admirals shares eventually (and they will concert investor to admirals shares without causing a non taxable event once you qualify). Just pick up a Vanguard fund that matches your overall desired asset allocation. Examples are Vanguard's total stock, total international stock, and total bond funds (though you probably don't want those in a taxable account).

MoonShadow

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Re: All my pre-tax buckets are full, what next?
« Reply #3 on: August 04, 2015, 06:43:39 PM »
Vanguard's VTMFX would be a fine place to store your extra funds, if Vanguard is your preference.

I fail to see how an admiral shares fund would help the OP's situation.


OP, stop worrying about the fact that you lack the capital right now for admirals shares. You'll get to admirals shares eventually (and they will concert investor to admirals shares without causing a non taxable event once you qualify). Just pick up a Vanguard fund that matches your overall desired asset allocation. Examples are Vanguard's total stock, total international stock, and total bond funds (though you probably don't want those in a taxable account).

Admiral what?

VTMFX is the Vanguard Tax Managed Balanced Fund.  It's a conservatively invested, internally diversified fund that is deliberately managed to keep the tax consquences low.

EDIT: Oh, I get it. You are saying that VTMFX is another fund with a $10K minimum. I wouldn't know about that, Vanguard isn't my thing.
« Last Edit: August 04, 2015, 06:45:54 PM by MoonShadow »

johnny847

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Re: All my pre-tax buckets are full, what next?
« Reply #4 on: August 04, 2015, 06:46:36 PM »
Vanguard's VTMFX would be a fine place to store your extra funds, if Vanguard is your preference.

I fail to see how an admiral shares fund would help the OP's situation.


OP, stop worrying about the fact that you lack the capital right now for admirals shares. You'll get to admirals shares eventually (and they will concert investor to admirals shares without causing a non taxable event once you qualify). Just pick up a Vanguard fund that matches your overall desired asset allocation. Examples are Vanguard's total stock, total international stock, and total bond funds (though you probably don't want those in a taxable account).

Admiral what?

VTMFX is the Vanguard Tax Managed Balanced Fund.  It's a conservatively invested, internally diversified fund that is deliberately managed to keep the tax consquences low.

EDIT: Oh, I get it. You are saying that VTMFX is another fund with a $10K minimum. I wouldn't know about that, Vanguard isn't my thing.

"Vanguard Tax-Managed Balanced Fund Admiral Shares (VTMFX)"
https://personal.vanguard.com/us/funds/snapshot?FundId=0103&FundIntExt=INT

"Minimum investment    $10,000"

Did you even read the original post?
(EDIT: Your edit got caught in my quote after I looked at it and before I hit insert quote.)
If Vanguard isn't your thing then don't make recommendations about things you don't understand.

MoonShadow

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Re: All my pre-tax buckets are full, what next?
« Reply #5 on: August 04, 2015, 06:47:58 PM »


DId you even read the original post?

Yes, but I must have overlooked that part about admiral shares and such.  Sorry.

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Re: All my pre-tax buckets are full, what next?
« Reply #6 on: August 04, 2015, 06:50:25 PM »
why not the etf version of it? i use it since i like etfs in taxable account better anyway
i do t mean the balanced fund but the total stock market

but there are balanced fund etfs too, not sure about vangaurd, but ishare has some
http://www.ishares.com/us/products/product-list#categoryId=104&lvl2=overview

but if you go this route, it becomes hard to trade it out for vangaurd once you hit 10k unless you dont mind the short term gains being taxed if you sell in a few months.
« Last Edit: August 04, 2015, 06:56:42 PM by eyem »

MoonShadow

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Re: All my pre-tax buckets are full, what next?
« Reply #7 on: August 04, 2015, 06:53:50 PM »
If Vanguard isn't your thing then don't make recommendations about things you don't understand.

:p

This is me butting out.

johnny847

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Re: All my pre-tax buckets are full, what next?
« Reply #8 on: August 04, 2015, 06:57:55 PM »
why not the etf version of it? i use it since i like etfs in taxable account better anyway
i do t mean the balanced fund but the total stock market

but there are balanced fund etfs too, not sure about vangaurd, but ishare has some
http://www.ishares.com/us/products/product-list#categoryId=104&lvl2=overview

That's true about ETFs, but if the OP likes MF's because of reasons such as being able to set up automatic investments, then there is no way to switch from ETFs to MF's without incurring a taxable event. The converse, however, is true - you can always convert from MF's to ETF's without a taxable event by just giving Vanguard a call.

Left

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Re: All my pre-tax buckets are full, what next?
« Reply #9 on: August 04, 2015, 07:40:14 PM »
i didnt know that about vanguard, i mean the conversion. but doesnt vanguards sub 10k fund auto convert once it hits 10k as well?

Nothlit

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Re: All my pre-tax buckets are full, what next?
« Reply #10 on: August 04, 2015, 07:45:51 PM »
I have maxed my 401k (18k) and IRA (5.5k) and hsa (3.5k). I will have 2000 a month for the next 5 months to put somewhere. I think vtsax is admiral which you have to have at least 10k? Can I buy something else from Vanguard while I wait? I likely won't get to 10k until January. I just want some simple index fund. This will be my first after tax investment.
Thanks!

If your end goal is to invest in VTSAX, then just start with VTSMX, which is the investor shares version of the same fund. It only has a $3k minimum, and once you reach $10k Vanguard will automatically convert your investor shares to admiral shares as a non-taxable event.

johnny847

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Re: All my pre-tax buckets are full, what next?
« Reply #11 on: August 04, 2015, 07:48:57 PM »
i didnt know that about vanguard, i mean the conversion. but doesnt vanguards sub 10k fund auto convert once it hits 10k as well?

Yes investor shares will auto convert to admirals shares once you hit $10k.

What I'm saying is if the OP wishes to use MFs in the long run, he or she cannot use ETFs as a stop gap solution until $10k is amassed to switch to admirals shares of the MF without incurring a taxable event (that is, the ETFs must be sold in order to buy the admirals shares of the MF).
The same logic can be applied to the investors shares - ETFs cannot be used as a stop gap solution until $3k is amassed to switch to investors shares of the MF without incurring a taxable event.

Bob W

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Re: All my pre-tax buckets are full, what next?
« Reply #12 on: August 04, 2015, 08:17:45 PM »
The correct answer is to pay down your mortgage and buy a little gold.   Both of these will allow you to live on very little income in your very early retirement and receive virtually free health insurance.   You should also consider real estate.

mozar

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Re: All my pre-tax buckets are full, what next?
« Reply #13 on: August 04, 2015, 08:23:22 PM »
vtsmx got it.
i have a 15 yr mortgage of 95k at 3.5% and I have a roommate. I hope that was a joke about gold.

MoonShadow

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Re: All my pre-tax buckets are full, what next?
« Reply #14 on: August 04, 2015, 08:57:48 PM »
I hope that was a joke about gold.

I doubt it.  Gold is an excellent diversifying asset.