Mutual Funds or ETF for Investment Account & IRA Roth contribution question

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Topic Author
MickMal
Posts: 35
Joined: Wed Mar 13, 2019 12:52 pm

Mutual Funds or ETF for Investment Account & IRA Roth contribution question

Post by MickMal » Mon Mar 18, 2019 3:23 pm

I hope it is ok that I post two questions together and if not, I apologize and will not do so in the future.

First question- I am opening an investment (taxable/non-retirement) account with Vanguard where I plan to invest in Vanguard index funds. I will set up an auto-investment which will debit my bank account twice a month. My understanding is that you cannot set up auto-investment if you are purchasing ETFs and wanted to ask if I am missing something in not considering ETFs? I do not plan to actively trade rather steadily invest in index funds over the next 10-15 years.

Second question - our (married jointly filing) adjusted gross income (AGI) is just over the limit allowing contributions to a Roth IRA but I am unclear for the modified AGI if we can subtract our Standard deduction or Itemized deduction since if I can, we just skate by in being able to contribute to a Roth IRA.

retiredjg
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Joined: Thu Jan 10, 2008 12:56 pm

Re: Mutual Funds or ETF for Investment Account & IRA Roth contribution question

Post by retiredjg » Mon Mar 18, 2019 3:26 pm

MickMal wrote:
Mon Mar 18, 2019 3:23 pm


First question- I am opening an investment (taxable/non-retirement) account with Vanguard where I plan to invest in Vanguard index funds. I will set up an auto-investment which will debit my bank account twice a month. My understanding is that you cannot set up auto-investment if you are purchasing ETFs and wanted to ask if I am missing something in not considering ETFs? I do not plan to actively trade rather steadily invest in index funds over the next 10-15 years.
You are not missing anything. Vanguard ETFs and mutual funds are different versions of the same stuff. Use the one that does what you want (auto investing).

Second question - our (married jointly filing) adjusted gross income (AGI) is just over the limit allowing contributions to a Roth IRA but I am unclear for the modified AGI if we can subtract our Standard deduction or Itemized deduction since if I can, we just skate by in being able to contribute to a Roth IRA.
You are out of luck. The modified AGI for Roth IRA is BEFORE standard/itemized deductions.

Topic Author
MickMal
Posts: 35
Joined: Wed Mar 13, 2019 12:52 pm

Re: Mutual Funds or ETF for Investment Account & IRA Roth contribution question

Post by MickMal » Mon Mar 18, 2019 3:37 pm

Thank you, sir.

Mutual funds it will be for the investment account and I thought I was out of luck with the Roth contribution but wanted to be certain.

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Duckie
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Re: Mutual Funds or ETF for Investment Account & IRA Roth contribution question

Post by Duckie » Mon Mar 18, 2019 4:43 pm

MickMal wrote:I thought I was out of luck with the Roth contribution but wanted to be certain.
There's always the Backdoor Roth method.

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