Investing Help. New Roth account

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Rad-1
Posts: 70
Joined: Mon Dec 05, 2016 12:30 am
Location: Albuquerque, NM

Investing Help. New Roth account

Post by Rad-1 »

Hello Bogleheads,
My wife and i have each recently setup a new Vanguard Roth account which we are just starting to contribute. We are both getting a late start and recently paid off all debt with 6mo Emergency fund saved.

My wife has an IRA Rollover account with Vanguard currently 100% in VBIAX Balanced index Admiral $55k 60/40.

I am a Federal Gov employee and contribute to the TSP on Traditional side currently in L2040 fund approx 75/25 with $50k with 19-20 years left until 62. My wife has 15 yrs left until age 62.

Curious as to what you think would be the best funds and allocations for the Roth side of our retirement accounts?
I am looking at the Target index funds or possiblely just going with the Balanced Index funds which Mr. Bogle seems to like. Ok with going a little more aggressive on the Roth side to maximize returns.

Thank you in advance for your opinions,
-Tom
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flamesabers
Posts: 1848
Joined: Fri Mar 03, 2017 11:05 am
Location: Rochester, MN

Re: Investing Help. New Roth account

Post by flamesabers »

What is your desired asset allocation?
logicteach
Posts: 73
Joined: Mon Aug 18, 2014 9:00 pm

Re: Investing Help. New Roth account

Post by logicteach »

I got a late start as well. You'll probably get better specific advice than I could give you but, since it looks like you're wanting to retire about 4 years after me, I'll tell you that my Vanguard Rollover IRA is 50% Total Stock Market Admiral Shares (VTSAX), 20% Total International Stock Index Admiral Shares (VTIAX), and Total Bond Index Admiral Shares (VTABX). Hope this helps!
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welderwannabe
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Joined: Fri Jun 16, 2017 8:32 am

Re: Investing Help. New Roth account

Post by welderwannabe »

We are about the same age. When I first started my Roth I just did a targeted as well. It has a nice low buy-in price. As my nut grew, I split out the funds to take care of the lower rate the admiral shares get you, and I also prefer a bond fund that isn't so heavily invested in US Govt Debt.

My tax-advantaged allocation is roughly 80/20. Broken down as follows:

50% Vanguard Total Stock Market VTSAX
30% Vanguard Total International Stock Market VTIAX
20% Vanguard Intermediate Term Investment Grade Bonds VFICX

You could just start with
100% Vanguard Targeted Retirement 2040

The targeted fund will let you buy in for as little as $1,000, and the nice thing is it is like a Ronco Rotisserie. You just set it and forget it. :sharebeer
I am not an investment professional, but I did stay at a Holiday Inn Express last night.
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Jerry55
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Location: That Toddlin' Town

Re: Investing Help. New Roth account

Post by Jerry55 »

Rad-1 wrote:Hello Bogleheads,

I am a Federal Gov employee and contribute to the TSP on Traditional side currently in L2040 fund approx 75/25 with $50k with 19-20 years left until 62. My wife has 15 yrs left until age 62.

-Tom

I retired CSRS in 2012, and if you have almost 20 years to go, I'd suggest you stay in the Target Date fund (L2040) and take some years to read up
on your options. Spend as many years as you wish, hopefully not more than 5 or so. The ROTH TSP became available shortly after I left in 2012, so that was never an option. I CAN Say that the TSP is probably THE BEST Place to save for the time being. DO NOT take all money out of the TSP when you retire and move it to Vanguard, or any other option, as the "G" Fund is your safest place in the world, in terms of BOND Funds. There is a minimum amount you must leave in the TSP to keep that option open. NEVER Close your TSP unless things change drastically.

That being said, I'm still in the TSP (age 62) and am 50%/25%/25% C, S and International fund, and will remain so for a minimum of 5-7 more years.
I have a more aggressive posture, but do have a ROTH IRA @ Vanguard (Wellesley - Legacy fund) and a Wellington Taxable as well.
Other than that, I'll never, ever leave the TSP 100%, and will probably only start taking RMD's from there when required.

Take your time, learn as much as you can, and there are many others here who have much to add to your situation in terms of comments.

Good Luck, and enjoy the ride.
Retired CSRS on 12/19/2012 @ age 57 w/39 years | Good Bye Tension, Hello Pension !!!
Topic Author
Rad-1
Posts: 70
Joined: Mon Dec 05, 2016 12:30 am
Location: Albuquerque, NM

Re: Investing Help. New Roth account

Post by Rad-1 »

Thanks for the replies guys. I really appreciate the advice and not to pull out of the TSP. I am leaning towards a 75/25 stock/bond allocation. I will likely reduce my equity exposure to 65/35 in 5 years or so. I am going to just stay in the TSP L2040 on my Traditional side as this seems to be the best option for me as it adjusts automatically.

As far as the Roth side I was thinking of just going with the Vanguard L2030 fund or maybe just a three or four fund portfolio which seems to be a simple popular option by Bogleheads. Total Stock, Total Intl Stock, Total Bond, extra 5% REIT possibly? Opinions on this?

Thanks,
-Tom
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