VTSAX Minimum Investment

[hm13hm13]

I have a very silly question. I want to pour my allotted $5500 for 2015 into a tIRA. I wanted to put it into VTSAX, but just saw that the minimum investment is $10K. There is no way around this, correct? I already have a Roth IRA with Vanguard with ~$5600 in VTSMX. In most years, my income doesn't allow me to take advantage of the tax break from the tIRA. However, taking 5 months of maternity leave in 2015 (largely unpaid) actually qualifies me a break for the tIRA. Do you see any issues with taking advantage of this for this year only?

[fattest_foot]

Not as far as I know. I ran into this problem last month when I maxed out my tIRA for 2015.

I have a significant amount in a Roth with Vanguard that's all in VTSAX, but I had to put the tIRA into VTSMX. I figure whenever I get it maxed out for 2016 I can move it all over to VTSAX (assuming my $5500 contribution is still worth more than $4500 by then...which is getting iffy; it's at like $5k now).

[HeadedWest2029]

Or you could just do VTI, the ETF equivalent with the same expense ratio as VTSAX.  Double down next year and assuming it's up to $10k then make the move to VTSAX if you wish to have dividends reinvest

[capitalninja]

It's probably worth doing. An alternative VTSAX is to simply buy VTI which is the ETF version of VTSAX. You get the same low .05% expense ratio and the holdings are identical.

If the IRA is being held actually at Vanguard, you could also just buy VTSMX and convert your VTSMX shares to their Admiral share equivalent (VTSAX) once your holdings balance exceeds 10k. There's no cost for doing this.

Many options for you on this one.

[NoStacheOhio]

If this year is the only year you can contribute to a tIRA, you might be best served simply using VTI. Do the math on taxes and fund expenses, and see if it's worth it instead of just adding to your Roth and upgrading the shares there.