Fidelity and Roth IRA question, new to group

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zoeyjjsaw
Posts: 1
Joined: Thu Nov 07, 2019 12:54 am

Fidelity and Roth IRA question, new to group

Post by zoeyjjsaw » Thu Nov 07, 2019 1:05 am

Hi,

I am new to the group. I just opened a Roth IRA at Fidelity after transferring funds over from my employer. Currently in cash and so need to be re invested.

1. Understanding that this Roth account will be part of my overall allocation with other retirement and taxable accounts, what are good asset classes to put in Roth accounts. total market index? Reit index? What would be more favorable asset classes to hold in a Roth account vs. in a 401K or taxable account?

2. I am new to Fidelity. What are good broad, low expense ratio index funds with Fidelity. An equivalent to a VTSAX for example?

Thanks!

mervinj7
Posts: 1129
Joined: Thu Mar 27, 2014 3:10 pm

Re: Fidelity and Roth IRA question, new to group

Post by mervinj7 » Thu Nov 07, 2019 1:25 am

1. https://www.bogleheads.org/wiki/Tax-eff ... _placement

2. https://www.bogleheads.org/wiki/Fidelity

Read the above and feel free to ask follow up questions.

557880yvi
Posts: 90
Joined: Wed Mar 06, 2019 3:11 pm

Re: Fidelity and Roth IRA question, new to group

Post by 557880yvi » Thu Nov 07, 2019 6:51 am

If you can provide a bit more information about your situation - age (or years to retirement), other retirement assets, goal for retirement, the responses can be more tailored. :moneybag :D

Big Jim24
Posts: 11
Joined: Sun Oct 13, 2019 2:12 pm

Re: Fidelity and Roth IRA question, new to group

Post by Big Jim24 » Thu Nov 07, 2019 9:48 am

I am in the same boat as you, so I will be watching the responses.

HomeStretch
Posts: 2648
Joined: Thu Dec 27, 2018 3:06 pm

Re: Fidelity and Roth IRA question, new to group

Post by HomeStretch » Thu Nov 07, 2019 9:53 am

Welcome! Fidelity is a great place to hold your Roth IRA (as is Vanguard) in my experience. They offer diversified, low-cost mutual funds and ETFs.

If your portfolio also includes a 401k and Taxable account, likely you should hold 100% equity in your Roth accounts for highest expected growth, tax-free (assuming you have space in your 401k to hold your desired bond allocation). Fidelity has good equity funds/ETFs like the US/International total stock market funds or S&P 500 fund

If you have follow-up questions after reading the linked BH wiki pages, above, please post your questions and financial picture as suggested in “Asking Portfolio Questions” found here:
https://www.bogleheads.org/wiki/Asking_ ... _questions
Last edited by HomeStretch on Thu Nov 07, 2019 9:58 am, edited 1 time in total.

Jack FFR1846
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Location: 26 miles, 385 yards west of Copley Square

Re: Fidelity and Roth IRA question, new to group

Post by Jack FFR1846 » Thu Nov 07, 2019 9:58 am

FZROX

there ya go.
Bogle: Smart Beta is stupid

nix4me
Posts: 314
Joined: Sat Oct 13, 2018 9:32 am

Re: Fidelity and Roth IRA question, new to group

Post by nix4me » Thu Nov 07, 2019 12:10 pm

FZROX or ITOT

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ruralavalon
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Location: Illinois

Re: Fidelity and Roth IRA question, new to group

Post by ruralavalon » Thu Nov 07, 2019 12:36 pm

Welcome to the forum :) .

Some additional information is necessary. What is your tax bracket, both federal and state? What funds are offered in your 401k plan? Please give fund names, tickers and expense ratios. Do you currently have a taxable brokerage account? If so what funds are you currently using in that account? Again please give fund names, tickers and expense ratios.

Please simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.


zoeyjjsaw wrote:
Thu Nov 07, 2019 1:05 am

I am new to the group. I just opened a Roth IRA at Fidelity after transferring funds over from my employer. Currently in cash and so need to be re invested.

1. Understanding that this Roth account will be part of my overall allocation with other retirement and taxable accounts, what are good asset classes to put in Roth accounts. total market index? Reit index? What would be more favorable asset classes to hold in a Roth account vs. in a 401K or taxable account?
It depends. What are the better fund choices offered in your 401k plan? These decisions cannot be made in a vacuum, they depend on the specifics of your situation.

The fund choices in a 401k plan are always limited, often there are few good choices offered.

Start fund selection by picking the best choices offered in your 401k plan, and then complete fund selection using the nearly unlimited choices available in the IRA and taxable account.

In general prefer stock funds in your Roth IRA and place your bond allocation in your 401k, but again it depends on what is offered in your 401k plan. (Don't use a poor quality or high expense bond fund in your 401k account, don't let tax considerations overrule all other considerations.) In general in a taxable account use very tax-efficient stock index funds. In general do not use bond funds or REIT funds in a taxable account, they are not tax-efficient.

Wiki article, Tax-efficient Fund Placement ".


zoeyjjsaw wrote:
Thu Nov 07, 2019 1:05 am
2. I am new to Fidelity. What are good broad, low expense ratio index funds with Fidelity. An equivalent to a VTSAX for example?
Fidelity® Total Market Index Fund (FSKAX) ER 0.015%.
Fidelity® Total International Index Fund (FTIHX) ER 0.06%.
Fidelity® US Bond Index Fund (FXNAX) ER 0.025%.

In my opinion Fidelity ZERO Total Market Index (FZROX) would be a bad choice for a taxable account. It can never be moved to another brokerage. Selling the fund to switch to another fund at Fidelity, or selling to switch to another brokerage, would create income tax liability.

in my opinion iShares Core S&P Total US Stock Mkt ETF (ITOT) ER 0.03% and iShares Core MSCI Total Intl Stk ETF (IXUS) ER 0.09% would be good choices for a taxable brokerage account at Fidelity. They are more tax-efficient than the Fidelity stock index funds.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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