You can buy VFINX within a traditional IRA. You can buy it in a Roth IRA or a taxable account as well.
Do you want an S&P 500 fund? Do you want to fund a traditional IRA?
I think I want to fund a traditional IRA, however I don't know what the advantages are between a tIRA and a taxable account
Embarassingly, I don't know enough to make an educated decision. At this moment I am following what MMM is suggesting.
Hello.
I've been reading MMM, and one line he said was " go to Vanguard.com and start an account to buy some units of the VFINX fund, or if you have a brokerage account you can buy SPY shares."
I currently opened a Traditional IRA account on vanguard, but is this where I buy shares of the VFINX fund? Am I supposed to be opening up a new account, that's a mutual fund account to buy shares of the VFINX fund?
IRAs and taxable accounts are just buckets to put money into. Funds like VFINX are the vehicles (or investments) that you put into each bucket.
If you have a tIRA account you can buy shares of VFINX and keep them there. You can ALSO open up a taxable account to put additional money into. If you like that can ALSO be shares of VFINX (allowing you to keep a one-fund portfolio while still garnering the tax-advantages of the IRA accounts).
OR you can add shares of other vanguard funds into either 'bucket'.
To sum: Most mustachians will have BOTH taxable and IRA accounts with a brokerage like Vanguard. IN both of these accoutns you can invest in whatever funds satisfies your AA (asset allocation).
Let me know if this is clear, happy to provide further details.
What's the advantages of a taxable account as opposed to a tIRA?
If most mustachians have both, what are the goals for each account ? I know that an IRA can be maxed to 5500 a year, however I know nothing about taxable accounts.
( I've been advised in this order: 401k to matching % / pay debts/ tIRA/savings in online bank acc).
The goal of tIRA was to convert into Roth over time, when my income becomes lower towards fire.