Author Topic: Opening a Roth IRA w/ Vanguard  (Read 433 times)

shmoggy

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Opening a Roth IRA w/ Vanguard
« on: March 24, 2019, 11:45:10 AM »
I feel like I've learned just enough to be dangerous, so I'm asking for a little advice about opening a Roth IRA @ Vanguard.

I have the option of funding for 2018 ($5,500) and 2019 ($6,000) right now or just funding 2018.  I thought I had read somewhere that accounts under $10k incur a fee, is that correct?  (The reason I would hold off on funding 2019 now is because I have an inherited IRA that I have to take RMD's from starting next year and thought I would use that money to fund the IRA instead of using my savings.)

Also, at what point do I get to select the fund my money goes in?  There doesn't seem to be that option on the initial application page.  Any suggestions on what fund to put it in?  I'm a 43 yr old single female, with 3 kids, if that makes any difference.

And, finally, thank you all so much for posting on these forums, the information is so helpful and I'm so happy to find like minded people!  :)

secondcor521

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Re: Opening a Roth IRA w/ Vanguard
« Reply #1 on: March 24, 2019, 12:19:51 PM »
I believe there is a small annual custodial fee for accounts under $10K.  It used to be $20 per year.  It goes away once the account hits $10K, so you'd maybe pay it for a year or two at most.

If you're opening the newer Vanguard brokerage-style accounts, buying the fund may be a two step process:  You deposit your contribution in cash.  Once the deposit arrives (a day or three later), you log into your account and make the purchase transaction.

I've got things set up so I've linked my checking account with Vanguard.  When I make contributions, it is all one process - I just say I want to contribute $X to my IRA and to buy fund Y with it.

I won't give you advice on what fund to put it in since there isn't enough information about you to give advice, plus it's my policy not to give advice.  You should consider the funds' asset allocations, costs, investing style (active or passive), and to what degree you want to invest in foreign investments.  You should also consider your other assets and resources (the inherited RMD, child support), risk tolerance, and plans and goals (college for those kids?).

Good luck.

Archipelago

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Re: Opening a Roth IRA w/ Vanguard
« Reply #2 on: March 24, 2019, 12:56:55 PM »
I feel like I've learned just enough to be dangerous, so I'm asking for a little advice about opening a Roth IRA @ Vanguard.

I have the option of funding for 2018 ($5,500) and 2019 ($6,000) right now or just funding 2018.  I thought I had read somewhere that accounts under $10k incur a fee, is that correct?  (The reason I would hold off on funding 2019 now is because I have an inherited IRA that I have to take RMD's from starting next year and thought I would use that money to fund the IRA instead of using my savings.)

Also, at what point do I get to select the fund my money goes in?  There doesn't seem to be that option on the initial application page.  Any suggestions on what fund to put it in?  I'm a 43 yr old single female, with 3 kids, if that makes any difference.

And, finally, thank you all so much for posting on these forums, the information is so helpful and I'm so happy to find like minded people!  :)

At least, how it used to be a few years ago when I opened my Roth IRA with Vanguard - there's a $20 annual fee for administration if you opt to receive paper mailed statements. If you decide to go with electronic statements, the fee would be waived. I'm not sure if that's the same today.

The expense ratios for under $10,000 are slightly higher. I.e. VTSMX is the same fund as VTSAX, but it's .14% annually vs. .04%. The good news is whenever you reach $10k you can simply convert the investor class shares to admiral shares. If you don't the conversion happens automatically after a little while.

When you first fund the account your money goes into a money market account. Then you buy whatever funds you'd like.

shmoggy

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Re: Opening a Roth IRA w/ Vanguard
« Reply #3 on: March 24, 2019, 01:35:10 PM »
Thanks, that answers my question!  :)

katsiki

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Re: Opening a Roth IRA w/ Vanguard
« Reply #4 on: March 24, 2019, 01:41:44 PM »
99% sure that the fee mentioned earlier is only if you want paper statements as noted above.