Finally ready to start investing in RothIRA (23yrs old)

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ynotyese.7
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Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Tue Oct 16, 2018 9:12 am

Hello,

First some background on my current situation.
23 yrs. old/making 21K a year as Graduate Assistant in college (I will be contributing earned income from a different job that I had from January-May of 2018)
High-Yield Savings: 40K
Do not own home or car: No Debt!

I have been reviewing the bogle heads forum for a while and have a conceptual understanding of the three-fund portfolio, the importance of diversification and asset allocation.
I have finally been able to transfer 2K into my IRA account, and would need nothing more than to write another check to reach the contribution limit. How would I make sure to do dollar-cost averaging if I contribute a lump sum, as opposed to transfer a specific amount over a specific amount of time?

I just want to make sure I have this right as I try to start investing the funds. I have an account with Schwab and think I will just need to invest in the equivalent funds typically mentioned (from Vanguard) in my Schwab account. The logistics and details are what really confuse me, like once I contribute the money I know I would buy shares from the appropriate fund, but how does that work? A step by step guide might be helpful, I am terrible with details!

Since I am going to max out the account and I plan to hold 90/10 or 80/20 in stocks and bonds would this be the break down?
Total Stock Market: 5000
Total Bond Market Index: 550
Total International Stock Market: ? Should this be a small amount from the 5,000?

-Also considering opening a taxable account to invest and make more money? Not sure if the three-fund portfolio method would also apply? How would I go about doing this?

Many unknowns in my life in terms of where I will be working or living within the next year, but trying to make smart financial decisions where I can, reducing my spending and saving as much as possible. If you have any other suggestions for other ways I could invest my money, please feel free to make suggestions!
Last edited by ynotyese.7 on Tue Oct 16, 2018 9:52 am, edited 1 time in total.

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David Jay
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by David Jay » Tue Oct 16, 2018 9:18 am

In order to contribute to a Roth, you must have earned income (equal or greater than the amount of your contribution). Teaching assistants can be paid in different ways, make sure that your pay format meets the Roth income requirements.

A few links (I searched on BH for "Roth teaching assistant"):

viewtopic.php?t=58606

viewtopic.php?t=150373
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

ynotyese.7
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Tue Oct 16, 2018 9:53 am

Sorry forgot to mention I will be contributing from earned income from a different job that I had from January-May of 2018. I have saved the paycheck stubs from that job and it totals just over the 5500 limit.

Flyer24
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by Flyer24 » Tue Oct 16, 2018 11:09 am

The international portion would be part of your equities. For example, 70% domestic 20% international 10% bonds. This gives you a 90/10 ratio.

longleaf
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by longleaf » Tue Oct 16, 2018 11:22 am

To DCA with a small balance would probably be with an etf. In your position, I would not. Lump sum vtsmx.

If you want more in taxable thats ok. Be sure to have your emergency fund covered. Especially with “unknowns”

I would go ahead and write that check to the roth and open a taxable holding money market for emergency fund if you haven’t already.

By the way, be aware of investment minimums for index funds. You can get away with smaller values using etfs; they are the same underlying fund. I noticed your specified level in the bond fund is below 3k
Frugality, indexing, time.

mortfree
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by mortfree » Tue Oct 16, 2018 11:25 am

check the minimums on the mutual funds you choose. Some of them can be 3,000.

ETFs do not have a minimum investment, but you need to buy whole number of shares.

mervinj7
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by mervinj7 » Tue Oct 16, 2018 11:32 am

longleaf wrote:
Tue Oct 16, 2018 11:22 am
By the way, be aware of investment minimums for index funds. You can get away with smaller values using etfs; they are the same underlying fund. I noticed your specified level in the bond fund is below 3k
OP opened his account at Schwab, not Vanguard. There is no minimum for Schwab's bond index fund. He can start implementing a three-fund portfolio right away as shown below.
ynotyese.7 wrote:
Tue Oct 16, 2018 9:12 am
Since I am going to max out the account and I plan to hold 90/10 or 80/20 in stocks and bonds would this be the break down?
Total Stock Market: 5000
Total Bond Market Index: 550
Total International Stock Market: ? Should this be a small amount from the 5,000?
For a Roth IRA, the max limit is $5500 (your current total is for $5550). At Schwab, a 70/20/10 US Stock/Intl Stock/Bonds could be implemented with 70% Total Stock Market (SCHB or SWTSX), 20% International Index (SCHF or SWISX), and 10% Core Bond (SCHZ or SWAGX). This wiki has suggestions for Boglehead-friendly three fund portfolios at various institutions.

https://www.bogleheads.org/wiki/Three-f ... head-style

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by triceratop » Tue Oct 16, 2018 11:53 am

Hello from another graduate research assistant. Sounds like you're set for earned income for 2018.

For 2019, your stipend may represent earned income, especially if it is W-2 income. However if you have a fellowship of any kind things can get complicated (still worth having the fellowship, of course, life isn't about taxes).

For a taxable account you can open that just about anywhere. It's an ordinary account (retirement accounts are the special ones). Schwab, Fidelity, and Vanguard are fine choices. Note that Vanguard sometimes causes people trouble with taxable accounts, due to mistakes in accurately accounting their cost basis.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by BL » Tue Oct 16, 2018 12:08 pm

You have the right idea. Make sure the annual amount does not exceed 5500. The % does not have to be exact when starting out, and some wait with international until more invested for simplicity.

Schwab Target 2060 Index (SWYNX) sounds like a simple, low-ER, set and forget fund while you concentrate on college. (I am most familiar with V. funds, but check it out, unless you want to spend more time on investing.)

Amounts for possible needs (emergency fund) should be in cash, Money market, savings, etc. See Bankrate for some online interest rates. I like Vanguard Prime Money Market, 2.17%, with no loss of principal, but not FDIC insured.

ynotyese.7
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Wed Oct 17, 2018 12:23 pm

triceratop wrote:
Tue Oct 16, 2018 11:53 am
Hello from another graduate research assistant. Sounds like you're set for earned income for 2018.

For 2019, your stipend may represent earned income, especially if it is W-2 income. However if you have a fellowship of any kind things can get complicated (still worth having the fellowship, of course, life isn't about taxes).

For a taxable account you can open that just about anywhere. It's an ordinary account (retirement accounts are the special ones). Schwab, Fidelity, and Vanguard are fine choices. Note that Vanguard sometimes causes people trouble with taxable accounts, due to mistakes in accurately accounting their cost basis.
Great, thank you for the advice. I opened an account with Schwab but heard it might be better to go with Vanguard or Fidelity to have lower fees and to "cut out the middleman". Do you have any thoughts on this? I would love to hear any more advice or tips you might have since we are both in similar spots.

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by triceratop » Wed Oct 17, 2018 1:00 pm

ynotyese.7 wrote:
Wed Oct 17, 2018 12:23 pm
triceratop wrote:
Tue Oct 16, 2018 11:53 am
Hello from another graduate research assistant. Sounds like you're set for earned income for 2018.

For 2019, your stipend may represent earned income, especially if it is W-2 income. However if you have a fellowship of any kind things can get complicated (still worth having the fellowship, of course, life isn't about taxes).

For a taxable account you can open that just about anywhere. It's an ordinary account (retirement accounts are the special ones). Schwab, Fidelity, and Vanguard are fine choices. Note that Vanguard sometimes causes people trouble with taxable accounts, due to mistakes in accurately accounting their cost basis.
Great, thank you for the advice. I opened an account with Schwab but heard it might be better to go with Vanguard or Fidelity to have lower fees and to "cut out the middleman". Do you have any thoughts on this? I would love to hear any more advice or tips you might have since we are both in similar spots.
I don't know that it's necessarily true that Vanguard/Fidelity has lower fees. Schwab has broad-market ETFs which are dirt cheap. The money market funds at Vanguard are definitely better, but maybe you shouldn't care too much about that (I certainly don't). For a simple 3-fund portfolio with ETFs you could do SCHB/SCHF/SCHZ or SCHB/SCHF/SCHR. However if you prefer to use mutual funds as opposed to ETFs then I might advise you to stick with Vanguard.

(I myself don't use any of those and instead use Merrill Edge. But that doesn't mean you should, it only makes sense at Merrill if you have a certain amount of assets to qualify for free trades. I started out at Vanguard.)
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

viz
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by viz » Wed Oct 17, 2018 3:17 pm

triceratop wrote:
Wed Oct 17, 2018 1:00 pm
ynotyese.7 wrote:
Wed Oct 17, 2018 12:23 pm
triceratop wrote:
Tue Oct 16, 2018 11:53 am
Hello from another graduate research assistant. Sounds like you're set for earned income for 2018.

For 2019, your stipend may represent earned income, especially if it is W-2 income. However if you have a fellowship of any kind things can get complicated (still worth having the fellowship, of course, life isn't about taxes).

For a taxable account you can open that just about anywhere. It's an ordinary account (retirement accounts are the special ones). Schwab, Fidelity, and Vanguard are fine choices. Note that Vanguard sometimes causes people trouble with taxable accounts, due to mistakes in accurately accounting their cost basis.
Great, thank you for the advice. I opened an account with Schwab but heard it might be better to go with Vanguard or Fidelity to have lower fees and to "cut out the middleman". Do you have any thoughts on this? I would love to hear any more advice or tips you might have since we are both in similar spots.
I don't know that it's necessarily true that Vanguard/Fidelity has lower fees. Schwab has broad-market ETFs which are dirt cheap. The money market funds at Vanguard are definitely better, but maybe you shouldn't care too much about that (I certainly don't). For a simple 3-fund portfolio with ETFs you could do SCHB/SCHF/SCHZ or SCHB/SCHF/SCHR. However if you prefer to use mutual funds as opposed to ETFs then I might advise you to stick with Vanguard.

(I myself don't use any of those and instead use Merrill Edge. But that doesn't mean you should, it only makes sense at Merrill if you have a certain amount of assets to qualify for free trades. I started out at Vanguard.)
As always, great advice from triceratop. I would suggest fidelity if you are starting with MF. Lower minimum and lower expense ratio. If you already had a vanguard account then it would have been a perfectly good place to be.

retiredjg
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by retiredjg » Wed Oct 17, 2018 3:25 pm

It is unclear, but it appears your money is at Schwab and you are thinking of buying Vanguard funds. Don't do that.

You can buy a Schwab Target INDEX fund and get everything you need in one fund with the money you have there right now. There is no need to do anything else.

Be sure you find the Index version of Schwab's target funds. The other version is not as low cost.

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by jakehefty17 » Thu Oct 18, 2018 9:51 am

Hello and welcome!

Schwab/Vanguard/Fidelity are all perfectly reasonable brokerage options for a Roth IRA. I use Vanguard for my Roth IRA and have a Schwab taxable. All provide no transaction fee, low-cost index funds. If you're at Schwab, use their index funds to build your portfolio. If you decide to change in the future it's not that big of a deal.

For 90/10, I'd suggest something like this:
70% SWTSX Schwab Total Stock Market Index Fund
20% SWISX Schwab International Index Fund
10% SWAGX Schwab U.S. Aggregate Bond Index Fund

Or for 80/20 something like:
60% SWTSX
20% SWISX
20% SWAGX

Of course those are just the simple 3-fund portfolios, but that's a great place to start.

If you start a taxable check out this page for valuable information regarding taxes - https://www.bogleheads.org/wiki/Tax-eff ... _placement
Schwab has excellent ETF selections which I would recommend using for a taxable account.

Good luck! Read up in the wiki and be confident with your decisions before moving forward. You're in the right place.
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." -Charles Bukowski

ynotyese.7
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Thu Oct 18, 2018 3:01 pm

retiredjg wrote:
Wed Oct 17, 2018 3:25 pm
It is unclear, but it appears your money is at Schwab and you are thinking of buying Vanguard funds. Don't do that.

You can buy a Schwab Target INDEX fund and get everything you need in one fund with the money you have there right now. There is no need to do anything else.

Be sure you find the Index version of Schwab's target funds. The other version is not as low cost.
Yes, I was not clear. I have money in Schwab but have not invested in any funds. Just considering other options just in case. I was considering a three-fund portfolio over a Target fund

ynotyese.7
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Thu Oct 18, 2018 3:02 pm

jakehefty17 wrote:
Thu Oct 18, 2018 9:51 am
Hello and welcome!

Schwab/Vanguard/Fidelity are all perfectly reasonable brokerage options for a Roth IRA. I use Vanguard for my Roth IRA and have a Schwab taxable. All provide no transaction fee, low-cost index funds. If you're at Schwab, use their index funds to build your portfolio. If you decide to change in the future it's not that big of a deal.

For 90/10, I'd suggest something like this:
70% SWTSX Schwab Total Stock Market Index Fund
20% SWISX Schwab International Index Fund
10% SWAGX Schwab U.S. Aggregate Bond Index Fund

Or for 80/20 something like:
60% SWTSX
20% SWISX
20% SWAGX

Of course those are just the simple 3-fund portfolios, but that's a great place to start.

If you start a taxable check out this page for valuable information regarding taxes - https://www.bogleheads.org/wiki/Tax-eff ... _placement
Schwab has excellent ETF selections which I would recommend using for a taxable account.

Good luck! Read up in the wiki and be confident with your decisions before moving forward. You're in the right place.
I understand so those percentage would be taken from the total 5500 that I have to work with, at least for this tax year. I appreciate the help I am planning on following that lay out as I built up a portfolio!

ynotyese.7
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Thu Oct 18, 2018 3:06 pm

triceratop wrote:
Wed Oct 17, 2018 1:00 pm
ynotyese.7 wrote:
Wed Oct 17, 2018 12:23 pm
triceratop wrote:
Tue Oct 16, 2018 11:53 am
Hello from another graduate research assistant. Sounds like you're set for earned income for 2018.

For 2019, your stipend may represent earned income, especially if it is W-2 income. However if you have a fellowship of any kind things can get complicated (still worth having the fellowship, of course, life isn't about taxes).

For a taxable account you can open that just about anywhere. It's an ordinary account (retirement accounts are the special ones). Schwab, Fidelity, and Vanguard are fine choices. Note that Vanguard sometimes causes people trouble with taxable accounts, due to mistakes in accurately accounting their cost basis.
Great, thank you for the advice. I opened an account with Schwab but heard it might be better to go with Vanguard or Fidelity to have lower fees and to "cut out the middleman". Do you have any thoughts on this? I would love to hear any more advice or tips you might have since we are both in similar spots.
I don't know that it's necessarily true that Vanguard/Fidelity has lower fees. Schwab has broad-market ETFs which are dirt cheap. The money market funds at Vanguard are definitely better, but maybe you shouldn't care too much about that (I certainly don't). For a simple 3-fund portfolio with ETFs you could do SCHB/SCHF/SCHZ or SCHB/SCHF/SCHR. However if you prefer to use mutual funds as opposed to ETFs then I might advise you to stick with Vanguard.

(I myself don't use any of those and instead use Merrill Edge. But that doesn't mean you should, it only makes sense at Merrill if you have a certain amount of assets to qualify for free trades. I started out at Vanguard.)
Understood, so it really just comes down to deciding if I want to do Mutual funds or ETFs and sticking with a brokerage that is better for MFs vs. ETFs! I appreciate the help. I will need to look into this.

ynotyese.7
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Thu Oct 18, 2018 3:08 pm

Flyer24 wrote:
Tue Oct 16, 2018 11:09 am
The international portion would be part of your equities. For example, 70% domestic 20% international 10% bonds. This gives you a 90/10 ratio.
Oh yes, that is right. I mixed that up! Thank you for catching that.

ynotyese.7
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Thu Oct 18, 2018 3:10 pm

BL wrote:
Tue Oct 16, 2018 12:08 pm
You have the right idea. Make sure the annual amount does not exceed 5500. The % does not have to be exact when starting out, and some wait with international until more invested for simplicity.

Schwab Target 2060 Index (SWYNX) sounds like a simple, low-ER, set and forget fund while you concentrate on college. (I am most familiar with V. funds, but check it out, unless you want to spend more time on investing.)

Amounts for possible needs (emergency fund) should be in cash, Money market, savings, etc. See Bankrate for some online interest rates. I like Vanguard Prime Money Market, 2.17%, with no loss of principal, but not FDIC insured.
Thank you for the advice! I do have an emergency fund in a high-yield savings account that has about a 1.9% interest rate, from what I can tell the main difference with the money market would be the higher interest rate and those are not FDIC insured, compared to the High-yield savings. Am I correct?

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Thu Oct 18, 2018 3:11 pm

mortfree wrote:
Tue Oct 16, 2018 11:25 am
check the minimums on the mutual funds you choose. Some of them can be 3,000.

ETFs do not have a minimum investment, but you need to buy whole number of shares.
Good point, thanks!

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by WhiteMaxima » Thu Oct 18, 2018 3:19 pm

Congrats. Invest aggressivly and grow big. DCA, don't lump sum. in the next 50 years, tech revolution will change how we will live. AI, Biotech, new energy. Don't to too aggressive, you will have time to recover for any market loss. Good luck.

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Thu Oct 18, 2018 3:40 pm

Of course those are just the simple 3-fund portfolios, but that's a great place to start.

If you start a taxable check out this page for valuable information regarding taxes - https://www.bogleheads.org/wiki/Tax-eff ... _placement
Schwab has excellent ETF selections which I would recommend using for a taxable account.

Good luck! Read up in the wiki and be confident with your decisions before moving forward. You're in the right place.
[/quote]

I forgot to ask when investing in a taxable account would one invest differently? I know you mentioned investing in ETF's and making sure to be tax efficient (it might help that I am at one of the lowest taxes brackets I will ever be) , but are there any other considerations I should look at compared to a tax advantaged IRA?

Living Free
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by Living Free » Thu Oct 18, 2018 4:08 pm

ynotyese.7 wrote:
Thu Oct 18, 2018 3:40 pm


I forgot to ask when investing in a taxable account would one invest differently? I know you mentioned investing in ETF's and making sure to be tax efficient (it might help that I am at one of the lowest taxes brackets I will ever be) , but are there any other considerations I should look at compared to a tax advantaged IRA?
not really. generally favor broad market index funds in taxable accounts over bond funds. if at schwab or fidelity instead of vanguard then use ETF index funds; if at vanguard use mutual fund or etf index funds.
in general try to max out tax advantaged retirement accounts prior to investing in a taxable account

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by jakehefty17 » Fri Oct 19, 2018 8:40 am

ynotyese.7 wrote:
Thu Oct 18, 2018 3:40 pm
I forgot to ask when investing in a taxable account would one invest differently? I know you mentioned investing in ETF's and making sure to be tax efficient (it might help that I am at one of the lowest taxes brackets I will ever be) , but are there any other considerations I should look at compared to a tax advantaged IRA?
The short answer is no, you don't invest much differently. Try to hold any bonds, REITs and other specific types of investments in your tax deferred account. Holding broad-market stock ETFs with low turnover will produce the least taxes while still giving you wide diversification (i.e. Total market, Total International, S&P 500... these types of ETFs). Hold your asset allocation across all accounts (treat all accounts as one big portfolio).

The wiki page I linked in my previous post should have all the information you need. -https://www.bogleheads.org/wiki/Tax-eff ... _placement
I bookmarked this link when I was starting as well. Good information. - https://investorjunkie.com/2898/tax-eff ... investing/

On a side note... Schwab has no transaction fee, low cost index mutual funds. The tickers I provided previously were for mutual funds. ETFs are considered slightly more tax efficient so I recommended them for your taxable if you choose to start one. Schwab is arguably the best provider of NTF ETFs, and has many index ETFs. However for your IRA (Roth or otherwise) you should probably choose mutual funds. Easier to manage.

Once you have the basics down it's all downhill from there.
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." -Charles Bukowski

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by retiredjg » Fri Oct 19, 2018 9:37 am

ynotyese.7 wrote:
Thu Oct 18, 2018 3:40 pm
I forgot to ask when investing in a taxable account would one invest differently? I know you mentioned investing in ETF's and making sure to be tax efficient (it might help that I am at one of the lowest taxes brackets I will ever be) , but are there any other considerations I should look at compared to a tax advantaged IRA?
A couple of differences to consider.

At Schwab, the ETF version of a fund may be a little more tax-efficient than the mutual fund version. (This is not true at Vanguard so don't let that difference confuse you.) If you don't like using ETFs and do prefer to remain at Schwab, I'm not sure I'd worry about it. I'd just use the mutual funds in taxable. I say that without knowing the actual difference, but I just can't see how it could be that much. Maybe others will disagree.

If you want or need to hold bond funds in a taxable account, you will need tax-exempt bonds if you are a high earner ( which I guess you are not right now).

Do not use a taxable account at all for retirement money if you have space available in a plan at work. Fill that plan first and the Roth IRA and then use taxable.

blastoff
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by blastoff » Fri Oct 19, 2018 9:48 am

PhD or masters?

There is a decent chance you'll have some earned income after first year or so if funded off PI grants.

Read about tax GAIN harvesting. If limited Roth or other space, and making 21k, you basically have a Roth in taxable land until you make more money. 0% LTCG. 0%qual div.

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Fri Oct 19, 2018 2:04 pm

retiredjg wrote:
Fri Oct 19, 2018 9:37 am
ynotyese.7 wrote:
Thu Oct 18, 2018 3:40 pm
I forgot to ask when investing in a taxable account would one invest differently? I know you mentioned investing in ETF's and making sure to be tax efficient (it might help that I am at one of the lowest taxes brackets I will ever be) , but are there any other considerations I should look at compared to a tax advantaged IRA?
A couple of differences to consider.

At Schwab, the ETF version of a fund may be a little more tax-efficient than the mutual fund version. (This is not true at Vanguard so don't let that difference confuse you.) If you don't like using ETFs and do prefer to remain at Schwab, I'm not sure I'd worry about it. I'd just use the mutual funds in taxable. I say that without knowing the actual difference, but I just can't see how it could be that much. Maybe others will disagree.

If you want or need to hold bond funds in a taxable account, you will need tax-exempt bonds if you are a high earner ( which I guess you are not right now).

Do not use a taxable account at all for retirement money if you have space available in a plan at work. Fill that plan first and the Roth IRA and then use taxable.
Got it thank you!

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Sat Oct 20, 2018 10:56 am

blastoff wrote:
Fri Oct 19, 2018 9:48 am
PhD or masters?

There is a decent chance you'll have some earned income after first year or so if funded off PI grants.

Read about tax GAIN harvesting. If limited Roth or other space, and making 21k, you basically have a Roth in taxable land until you make more money. 0% LTCG. 0%qual div.
Masters to possibly PhD, still thinking about it. Yes after the 1st year there would be some earned income. Thanks for the advice.

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BL
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by BL » Sat Oct 20, 2018 10:40 pm

You probably don't want to bounce around with your retirement accounts as most (except Vanguard) charge 50-100 dollars to close the account when you move. With V you would choose e-statements to avoid low-balance fee. I don't know if other brokerages have other fees, but I have never had a fee at V or any type of problem, for that matter.

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by AtlasShrugged? » Sun Oct 21, 2018 4:48 am

ynotyese.7....My advice, simplify. At age 23, you have time. Lots of it. Dump everything into FSTVX. Don't worry about bonds/Intl for a couple years. Just make that initial investment, and try to get into the habit of contributing regularly - inculcate that behavior/habit.

Fidelity customer service is outstanding. Their website is very good also.
“If you don't know, the thing to do is not to get scared, but to learn.”

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BL
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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by BL » Sun Oct 21, 2018 7:09 am

The important stuff is all in this 16-page pdf:
https://www.etf.com/docs/IfYouCan.pdf

A target date fund is similar to the 3-fund portfolio. That uses ~10% bonds which is fine if you don't get nervous when market is crashing. Look for low ERs, probably index funds.

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Mon Oct 22, 2018 10:47 am

BL wrote:
Sun Oct 21, 2018 7:09 am
The important stuff is all in this 16-page pdf:
https://www.etf.com/docs/IfYouCan.pdf

A target date fund is similar to the 3-fund portfolio. That uses ~10% bonds which is fine if you don't get nervous when market is crashing. Look for low ERs, probably index funds.
Got it thanks!

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Mon Oct 22, 2018 10:48 am

BL wrote:
Sat Oct 20, 2018 10:40 pm
You probably don't want to bounce around with your retirement accounts as most (except Vanguard) charge 50-100 dollars to close the account when you move. With V you would choose e-statements to avoid low-balance fee. I don't know if other brokerages have other fees, but I have never had a fee at V or any type of problem, for that matter.
Oh yes, you make a good point! It may be better to stick with Schwab

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Re: Finally ready to start investing in RothIRA (23yrs old)

Post by ynotyese.7 » Mon Oct 22, 2018 10:49 am

AtlasShrugged? wrote:
Sun Oct 21, 2018 4:48 am
ynotyese.7....My advice, simplify. At age 23, you have time. Lots of it. Dump everything into FSTVX. Don't worry about bonds/Intl for a couple years. Just make that initial investment, and try to get into the habit of contributing regularly - inculcate that behavior/habit.

Fidelity customer service is outstanding. Their website is very good also.
Got point, thank you!!

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