Asset Allocation for Minor ROTH IRAs for Kids Ages 15 & 13

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Jajb6029
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Joined: Mon Aug 20, 2018 11:11 am

Asset Allocation for Minor ROTH IRAs for Kids Ages 15 & 13

Post by Jajb6029 » Fri Sep 21, 2018 9:01 am

Hi Bogleheads,

In the process of moving my kids' minor ROTH IRAs to Vanguard. Previous financial advisor had them in PROSHARES S&P 500 ETF, Dividend A, NOBL for 60% and then 40% in a cash sweep account??? Kids are 15 and 13 so they have a very long horizon for this to grow. Balance of each is approx. $25,000.

So since these are tax advantaged plans do we go the bond route with VBTLX or be agressive with VTSAX or VTSMX? Or a combination of the two? Would very much like to hear opinions on this so thank you very much in advance.

hdas
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Joined: Thu Jun 11, 2015 8:24 am

Re: Asset Allocation for Minor ROTH IRAs for Kids Ages 15 & 13

Post by hdas » Fri Sep 21, 2018 9:21 am

This thread should be good for discussing how to best (outcome, cost, safety) hold a leveraged long position in stocks for the long term. H

mervinj7
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Joined: Thu Mar 27, 2014 3:10 pm

Re: Asset Allocation for Minor ROTH IRAs for Kids Ages 15 & 13

Post by mervinj7 » Fri Sep 21, 2018 11:38 am

Jajb6029 wrote:
Fri Sep 21, 2018 9:01 am
Hi Bogleheads,

In the process of moving my kids' minor ROTH IRAs to Vanguard. Previous financial advisor had them in PROSHARES S&P 500 ETF, Dividend A, NOBL for 60% and then 40% in a cash sweep account??? Kids are 15 and 13 so they have a very long horizon for this to grow. Balance of each is approx. $25,000.

So since these are tax advantaged plans do we go the bond route with VBTLX or be agressive with VTSAX or VTSMX? Or a combination of the two? Would very much like to hear opinions on this so thank you very much in advance.
A 60/40 allocation seems reasonable if the Roth IRA was intended to be used for college tuition. That is, withdraw just the contributions when the kids are 18-22. However, if this Roth IRA is intended as true Retirement Vehicle with a 50+ year time horizon, I would throw 100% into the Vanguard Target Retirement 2065 Fund (VLXVX) and call it a day. Don't think about about for the next 10-15 years till the kids have other retirement/taxable accounts to balance for their Asset Allocation (AA). KISS.

https://investor.vanguard.com/mutual-fu ... file/VLXVX

Edit: changed from 2060 to 2065 fund. Also, waiting for another poster to ask how the kids got $25k in a Roth IRA by age 13...

Miriam2
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Re: Asset Allocation for Minor ROTH IRAs for Kids Ages 15 & 13

Post by Miriam2 » Fri Sep 21, 2018 6:22 pm

Hi
Jajb6029 wrote: . . . Kids are 15 and 13 so they have a very long horizon for this to grow. Balance of each is approx. $25,000. . . .
Hi Jajb6029,
I'm interested in how your kids got $25k in each Roth IRA by age 13 and 15?

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F150HD
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Re: Asset Allocation for Minor ROTH IRAs for Kids Ages 15 & 13

Post by F150HD » Fri Sep 21, 2018 7:48 pm

Miriam2 wrote:
Fri Sep 21, 2018 6:22 pm
Hi
Jajb6029 wrote: . . . Kids are 15 and 13 so they have a very long horizon for this to grow. Balance of each is approx. $25,000. . . .
Hi Jajb6029,
I'm interested in how your kids got $25k in each Roth IRA by age 13 and 15?
+1 on that. 13 years old and $25k invested :confused

Grt2bOutdoors
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Re: Asset Allocation for Minor ROTH IRAs for Kids Ages 15 & 13

Post by Grt2bOutdoors » Fri Sep 21, 2018 8:10 pm

70% Total Stock Market Index
30% Total International Stock Index
Let them ride.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

PFInterest
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Re: Asset Allocation for Minor ROTH IRAs for Kids Ages 15 & 13

Post by PFInterest » Fri Sep 21, 2018 8:38 pm

Grt2bOutdoors wrote:
Fri Sep 21, 2018 8:10 pm
70% Total Stock Market Index
30% Total International Stock Index
Let them ride.
This. Or just VTSAX. Or basically anything 100% stock.
Please don't take out any money for college or a house.

Jajb6029
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Re: Asset Allocation for Minor ROTH IRAs for Kids Ages 15 & 13

Post by Jajb6029 » Sat Sep 22, 2018 12:23 pm

Both have been blessed to have professional modeling contracts for 4+ years. Lucky kiddos.

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