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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: xclonexclonex on May 03, 2015, 04:25:09 AM

Title: Looking to contribute $3000 to my Roth IRA. What fund should I contribute to?
Post by: xclonexclonex on May 03, 2015, 04:25:09 AM

Hello everyone,

I am 32 years old. I am looking into contribute to my Roth IRA at Vanguard. Currently, 100% of my investment is in the following fund -

Vanguard Target Retirement 2055 Fund Investor Shares (VFFVX)

My current balance is - $1,557.41

I am thinking about contributing $3000 to my Roth IRA.

I have a following questions -

1. Should I contribute to aforementioned fund?

Or

2. Should I contribute to another fund? I am thinking about a more aggressive fund seeing as how I am young enough to where I can take some risk. Here are the funds I am thinking about. Your opinions are appreciated -

- Vanguard Dividend Growth Fund (VDIGX)
https://personal.vanguard.com/us/funds/snapshot?FundId=0057&FundIntExt=INT#tab=1

- Vanguard U.S. Growth Fund Investor Shares (VWUSX)
https://personal.vanguard.com/us/funds/snapshot?FundId=0023&FundIntExt=INT

- Vanguard Morgan Growth Fund Investor Shares (VMRGX)
https://personal.vanguard.com/us/funds/snapshot?FundId=0026&FundIntExt=INT

- Vanguard Mid-Cap Growth Fund (VMGRX)
https://personal.vanguard.com/us/funds/snapshot?FundId=0301&FundIntExt=INT

If none of these are good, perhaps you could direct me to something better?

Thanks in advance for your help in guiding me.

Title: Re: Looking to contribute $3000 to my Roth IRA. What fund should I contribute to?
Post by: TheThirstyStag on May 03, 2015, 10:04:10 AM

Consider VTSMX until you reach the $10k threshold for investing in VTSAX

Once you have a decent amount of cash (enough to meet the minimum for each of the funds), look into a three fund portfolio (Google it).  That's probably the best way to mimic a target retirement fund without the higher expense ratios. 

Title: Re: Looking to contribute $3000 to my Roth IRA. What fund should I contribute to?
Post by: xclonexclonex on May 03, 2015, 10:06:32 AM

Hello,

Thank you for your reply. I am not quite sure what you meant.

> Consider VTSMX until you reach the $10k threshold for investing in VTSAX

Does this mean that I wait until my investment portfolio has reached $10000, and then sell everything and buy VTSAX? Do I have to pay taxes if I sell my funds before retirement?

I will google what the three fund portfolio is.

Title: Re: Looking to contribute $3000 to my Roth IRA. What fund should I contribute to?
Post by: MDM on May 03, 2015, 10:16:56 AM

Quote from: xclonexclonex on May 03, 2015, 10:06:32 AM

Does this mean that I wait until my investment portfolio has reached $10000, and then sell everything and buy VTSAX? Do I have to pay taxes if I sell my funds before retirement?

See https://personal.vanguard.com/us/insights/article/admiral-questions-112013

Title: Re: Looking to contribute $3000 to my Roth IRA. What fund should I contribute to?
Post by: xclonexclonex on May 03, 2015, 11:04:42 AM

Thank you very much. That answers my question.