Author Topic: Vanguard Assistance  (Read 692 times)

deek

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Vanguard Assistance
« on: January 22, 2019, 06:15:30 PM »
I rolled over an old 401k to Vanguard. My funds are currently in an IRA Brokerage Account invested in a Vanguard Federal Money Market Fund. How do I get this switched over to a Roth plan?

Indexer

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Re: Vanguard Assistance
« Reply #1 on: January 22, 2019, 07:58:55 PM »
Before you do that, are you aware of the tax implications?

If you convert the entire pre-tax account to a Roth then the entire amount would be taxable as ordinary income.

deek

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Re: Vanguard Assistance
« Reply #2 on: January 22, 2019, 08:36:05 PM »
Before you do that, are you aware of the tax implications?

If you convert the entire pre-tax account to a Roth then the entire amount would be taxable as ordinary income.

Sorry, yes, I am - I should've clarified. But I opted to keep one tIRA and one Roth. Tax advantages for the short and long term. I will contribute until I reach that $3000 minimum so I can pick and choose where it goes. Are there other options that don't require a $3000 minimum that are smarter than keeping it in a money market?

I bought an index with the existing funds (the tIRA) so we're good there.

robartsd

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Re: Vanguard Assistance
« Reply #3 on: January 22, 2019, 08:53:06 PM »
I bought an index with the existing funds (the tIRA) so we're good there.
Two options at Vanguard I'd recommend when investing less than $3000. 1) Target Date funds (minimum $1000) 2) Exchange Traded Funds (whole shares only).

Indexer

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Re: Vanguard Assistance
« Reply #4 on: January 22, 2019, 08:53:27 PM »
Target date funds and ETFs have lower minimums.

Target date funds have a $1,000 minimum.

ETFs= whatever 1 share costs.

Vanguard's well known index funds are all available as ETFs.

Popular examples:
500 index = VOO
Total stock index = VTI
Total international stock index = VXUS
Total bond = BND