Author Topic: Starting Vanguard Roth IRA - Trusting them?  (Read 2601 times)

Vic99

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Starting Vanguard Roth IRA - Trusting them?
« on: August 05, 2015, 08:45:16 AM »
I'm 45, wife is 40.  Plan to retire in 10-12 years.  Getting close to maxing out 403b/401k.  I earn 72.5k, wife earns 102k.  No bonuses.  Currently have no IRAs.  Because we are allocating extra money toward our mortgage principle, we will pay off house two years from this posting.  Rate is 2.5%, so I don't want to put even more money toward it.

I have 10k that I want to pull out of a money market and use it to start Roth IRAs - one for me, one for my wife.  Money was already taxed as it was from work earnings.  Do I trust the Vanguard employee that I talk to on the phone regarding how to allocate the funds?

I suspect that I have to look at fees and past 5 or 10 year history.  I also suspect that if I want to move the money into another fund later that there will be a fee for that transaction, thus obviously I want to pick well.  Any advice?  Many thanks.

forummm

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Re: Starting Vanguard Roth IRA - Trusting them?
« Reply #1 on: August 05, 2015, 09:08:10 AM »
Any recommendation from Vanguard is going to be a good one. Yes, you can trust them. Their recommendations should be similar to what you get from these:

https://personal.vanguard.com/us/funds/tools/recommendation
https://personal.vanguard.com/us/FundsInvQuestionnaire
https://personal.vanguard.com/us/insights/investingtruths/investing-truth-about-risk

Scandium

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Re: Starting Vanguard Roth IRA - Trusting them?
« Reply #2 on: August 05, 2015, 09:09:45 AM »
You're in a seriously high tax bracket, but are not maxing out pre-tax accounts?? Do that now! Even if it means 30% contribution rate the rest of the year. If you have to live off the money market cash do that.

With a 2.5% rate why put anything more towards the mortgage?

I don't know if vanguard will tell you how to allocate funds, they usually charge for that.. I guess a target date fund would be ok. Or I suggest learning about asset allocation. Do NOT look at 5 or 10 year returns, that's meaningless. Pick an AA and stick to it.

Louisville

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Re: Starting Vanguard Roth IRA - Trusting them?
« Reply #3 on: August 05, 2015, 09:11:20 AM »
Most Vanguard funds do not charge for transfers from fund to fund. Those that do only do so for a short period after buying into the first fund, to discourage short term trading.

Louisville

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Re: Starting Vanguard Roth IRA - Trusting them?
« Reply #4 on: August 05, 2015, 09:12:07 AM »
You're in a seriously high tax bracket, but are not maxing out pre-tax accounts?? Do that now! Even if it means 30% contribution rate the rest of the year. If you have to live off the money market cash do that.

With a 2.5% rate why put anything more towards the mortgage?

I don't know if vanguard will tell you how to allocate funds, they usually charge for that.. I guess a target date fund would be ok. Or I suggest learning about asset allocation. Do NOT look at 5 or 10 year returns, that's meaningless. Pick an AA and stick to it.
Yes, all of this.

Vic99

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Re: Starting Vanguard Roth IRA - Trusting them?
« Reply #5 on: August 05, 2015, 10:18:08 AM »
Thanks forummm.

Thanks to all that have replied so far.

1) I was originally just contributing a bit over the matching for 401/3bs. We just bumped it three days ago. If all goes fine, then in a two-three months we will adjust again to max out. Also just cut out a few thousand in car insurance, killed cable, etc.  It's a process and I will be there soon. I'm new to the forum and blog.

2) We refinance three years ago and got a 5/1 arm 30 yr loan. My math gets me to paying off in 5 years when we throw extra to principal and avoid the percent going up. This is pre-mustache thinking three years ago.  Rather than have the percent go up with a larger balance we got more aggressive to kill debt three years ago. Will try to both kill the debt On this early schedule AND MAX OUT 401/3.

3) I was concerned that a rep at Vanguard or any other company might try to, subtlety or not, move me towards funds that benefit their company or employee profits. I knew I would find people here who had experience with Vanguard and could set me straight.