pennstater2005 wrote:I'm assuming the 12k saved is not part of your emergency fund, correct? No, you would not want the bond fund in a taxable account. They would be need to be placed inside of the Roth. And the Total US and Total International funds would go into the taxable account in their proper amounts respectively to reach your AA of 75/25.
http://www.bogleheads.org/wiki/Principl ... _Placement
Duckie wrote:jor, is the $12K for long-term retirement investing or something else?
You can contribute up to $5.5K to a Roth IRA for 2013 if you had enough in job income. You could put it in (VTHRX) Vanguard Target Retirement 2030 Fund (0.17%). It has close to the AA you want. Then save the rest in taxable for grad school and other short-term needs.
Or in taxable you could put $6K in (VTSMX) Vanguard Total Stock Market Index Fund Investor Shares (0.17%) and $3K in (VGTSX) Vanguard Total International Stock Index Fund Investor Shares (0.22%). Then in a Roth IRA put $3K in (VBMFX) Vanguard Total Bond Market Index Fund Investor Shares (0.20%). But this is only is it's all for retirement.
pennstater2005 wrote:That's a pretty nice savings amount for someone your age and you seem to have a pretty good grasp on what you are looking to achieve. Congratulations on that. Remember you do need to have earned income in order to use a Roth IRA. I assume you do since you have listed your federal tax rate. Do you have a 401K available to you? That would open up more tax deferred space.
jor wrote:What are good funds for intermediate needs? I'm trying to keep it as simple as possible without worrying about it.
EDIT: my dad suggests I put the max 5.5K in an Roth IRA for 2013, then the max for next year. He doesn't think a three fund portfolio is necessary and I should just worry about retirement savings.
Duckie wrote:jor wrote:What are good funds for intermediate needs? I'm trying to keep it as simple as possible without worrying about it.
For money needed in fewer than five years (including emergency funds) use a mix of savings accounts, money market accounts, CDs, and I Savings Bonds through Treasury Direct. For money needed in fewer than 10 years use the above plus possibly a short-term bond fund like (VBISX) Vanguard Short-Term Bond Index Fund Investor Shares (0.20%).EDIT: my dad suggests I put the max 5.5K in an Roth IRA for 2013, then the max for next year. He doesn't think a three fund portfolio is necessary and I should just worry about retirement savings.
By "retirement savings" I assume you mean tax-sheltered savings like an IRA. If you put the $5.5K Roth IRA contribution into VTHRX, this is basically the three-fund portfolio. (Technically, because they added some international bonds recently, it's four funds, but it's close enough.)