Roth IRA advice please

[fitnessjunkie]

Hi everyone! 

I had posted a while back (I believe back in 2017) about opening a Roth IRA for both my husband and I. We were just starting out saving for retirement that way (I had some set aside as I'm a teacher, but my husband was just starting out completely). We were saving for IVF at the time, so we didn't have much to throw at retirement - we now have a healthy baby girl and our Roth IRA through Vanguard has finally reached over 3k for each of us. I know its not much at all, but we are at the point where we are ready to transfer it to something else.

At the time, it was recommended by the pros on here to invest in a Total Stock Market Index Fund or a 500 Index Fund - but we didn't have the minimum of 3k at the time to do so. The one specifically that was recommended is now 'closed' on the Vanguard website. What does that mean? (I do not know much about investing, I'm still learning). Here is the link...

personal.vanguard.com/us/funds/snapshot?FundId=0040&FundIntExt=INT

So do I transfer what we have to the Admiral Shares? Or is there something else? Thanks so much for your help, I appreciate all of your advice - I'm mostly a lurker!

[winemaker06]

Congrats on your healthy baby!

The main Vanguard fund recommended by index investors is VTSAX. The Admiral share class is just a lower fee fund, and now has the $3,000 minimum (it used to be $10,000). The one you linked is also a good one, so you can't really go wrong with either!

All you should have to do is "exchange" from your current fund to the new one. Since it's in a Roth IRA, there aren't any tax implications to worry about. If you can't find all the right buttons, I can log into my account to help a little more.

[mainelyfoolish]

Another option is the Vanguard target retirement date funds. Their target date funds invest in stock market and bond market index funds and they automatically rebalance the investments to be more conservative (lower earnings but less risk of loss) as you get closer to retirement. All you do is pick the fund that is closest to your retirement date (2040, 2045, 2050, etc.).

[dr.girlfriend]

Jan 21, 2019 10:03:57 GMT -5 mainelyfoolish said:

Another option is the Vanguard target retirement date funds. Their target date funds invest in stock market and bond market index funds and they automatically rebalance the investments to be more conservative (lower earnings but less risk of loss) as you get closer to retirement. All you do is pick the fund that is closest to your retirement date (2040, 2045, 2050, etc.).

Ditto this, and if you want to be a bit more aggressive you can pick one a little past your real retirement date to weight the scale more toward higher-risk higher-growth potential stuff.

[fitnessjunkie]

Thanks so much for your replies! I feel so lost sometimes when it comes to these sort of things, so I definitely appreciate all of your input!

[shaynaatl]

Yes Vanguard lowered their minimium from $10k to $3k for the Total Stock Market Index (Admiral class). This is a great change as Admiral has lower fees. So you could definitely move your money into that.

As others have mentioned, Target Date funds are also a great option. But these are meant to be one-fund portfolios, meaning ideally your target date fund isn’t one of 6 or 7 different funds you own. You just buy that one fund, and set and forget.

If you’re going to have a portfolio of various asset classes (e.g. International, Small cap, etc), then Total Stock Market Index should be the core of that portfolio.