1. 2500 only qualifies me for the Target Date fund with Vanguard which I'm not a huge fan of. I like being in total control of my stock/bond/real estate mix.
2. I already have over 10K in the Roth IRA, so I qualify for the Admiral Shares
TripWest, the key thing is to keep those tax-deferred dollars tax-deferred. Either a Roth or traditional IRA is fine--just don't cash them out.
Why do you feel that a target date fund does not allow you control of your asset allocation?
The only real difference is that the Target Date fund invests a large chunk in the International Stock Market as well which is not really what I want to be doing at this point in time. However, I want to stay heavily invested in stocks, and am waiting on another 10K minimum before I invest in bonds at all.
I know that I could balance these more as my stache grows, it just feels less than optimal for me at this moment in time. The other downside is that the expense ratio is more than 3x higher than the VTSAX (probably not a huge deal as we're talking in basis points, however, every basis point matters when you've got years of compounding ahead).
After everything people have suggested here and after speaking with somebody at Vanguard, I've decided to go in the following route for the time being.
1. Rollover my 401K into a traditional IRA with a vanguard target date fund (gives me more options in the future, keeps my future tax liabilities diversified, and avoids me a red flag with the IRA according to the Vanguard rep)
2. Depending on what the future holds do one of two things:
a. If I switch jobs immediately with no year of low income in between in the future and have to roll over another 401K, then I'll keep the traditional IRA to diversify my future tax risk if I get that balance over 10,000
b. If I have a year of low income in the near future, then I'll convert the traditional IRA over into my Roth IRA
3. Going forward I will continue to max out my Roth IRA.
4. Going forward I will take all money that I would be putting into a 401K towards paying off my 6.8% interest student loans until I have another opportunity to contribute to a 401K
Thank you everybody for your thoughts and suggestions.