tIRA question

[doneby35]

If I was to open a tIRA account with Fidelity to invest in their total stock market index fund, would it take into consideration the amount of money that I have in my 401k which happens to be a S&P 500 index fund with them, to determine whether I get to choose the investor class with 0.17 expense ratio and a minimum of $3,000 investment or the premium class with 0.05 expense ratio and a minimum of $10,000 investment? Or are they just two separate things and I can only start with the investor class since the most I can contribute per year is $5,500?

[VoteCthulu]

You should be able to buy the regular fund this year, then next year after making your contribution exchange the $11,000 into the better fund.

[AlmstRtrd]

If you have the funds to invest now, you can contribute $5,500 to a tIRA now for 2016 and then another $5,500 after January 1st as your 2017 contribution. Sounds like you are just starting out so make sure you have a decent emergency fund on hand before you prioritize saving .12% on fund expenses.

Ah, and one thing that I always did if I knew the tIRA was going to make sense was to contribute as early as possible. In other words, you'd have from 1/1/17 to 4/15/18 to make your 2017 contribution. Over many years, getting that money in 15 months earlier adds up (never did the math but it has to be a considerable amount over time).

Good luck!

[doneby35]

Awesome. Thank you both for the info.