Automatic investing on Vanguard

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Topic Author
jacobacro
Posts: 10
Joined: Wed Mar 18, 2020 5:44 pm
Location: Springfield, Oregon, USA

Automatic investing on Vanguard

Post by jacobacro » Tue May 05, 2020 12:17 am

I have a Vanguard Roth IRA and I make monthly contributions. The problem is that the process is not as automatic as I would like. I have set up automatic investments, but that money goes into an escrow account and I still have to login and buy a fund. Is there a way to make this more automatic? I only have ETFs so far and no mutual funds. Are mutual funds more automatic? What about Target Date Funds?

Thanks

-Jacob

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Eagle33
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Joined: Wed Aug 30, 2017 3:20 pm

Re: Automatic investing on Vanguard

Post by Eagle33 » Tue May 05, 2020 1:29 am

You can set up automatic contributions for purchase of mutual funds - we have done it. Mutual funds are purchased by the dollar amount, not by share as ETFs.
Rocket science is not “rocket science” to a rocket scientist, just as personal finance is not “rocket science” to a Boglehead.

rkhusky
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Re: Automatic investing on Vanguard

Post by rkhusky » Tue May 05, 2020 6:51 am

Eagle33 wrote:
Tue May 05, 2020 1:29 am
You can set up automatic contributions for purchase of mutual funds - we have done it. Mutual funds are purchased by the dollar amount, not by share as ETFs.
+1
You need mutual funds at Vanguard. Or a brokerage that allows fractional shares of ETF's.

kclark
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Joined: Wed Sep 19, 2018 7:35 am

Re: Automatic investing on Vanguard

Post by kclark » Tue May 05, 2020 3:17 pm

I too had that very same issue with my Vanguard account. I figured out how to set up my automatic investment in my Roth and just like others said, I use mutual funds only in my Roth. I have the money pulled from my bank account every 2 weeks and dollar cost average into all my Vanguard funds I've chosen in my Roth account. You also can control how the breakdown of your contribution amount equally or by percentage into your funds within the Roth account. Now for my Vanguard Brokerage Account, I specifically have my ETF's and stocks in that account only. EFT's and stock purchases method is the same for both where you need to buy at the full share price to get it. I'm waiting for the day Vanguard will allow the purchase of fractional shares, then you can could routinely by ETFs and stocks at a specific dollar amount without the need of buying the whole share.

Topic Author
jacobacro
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Joined: Wed Mar 18, 2020 5:44 pm
Location: Springfield, Oregon, USA

Re: Automatic investing on Vanguard

Post by jacobacro » Tue May 05, 2020 8:04 pm

That answers my question. Thanks everybody. I need to get mutual funds.

Robert20
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Joined: Fri Apr 10, 2020 10:51 pm

Re: Automatic investing on Vanguard

Post by Robert20 » Tue May 05, 2020 9:41 pm

jacobacro wrote:
Tue May 05, 2020 12:17 am
I have a Vanguard Roth IRA and I make monthly contributions. The problem is that the process is not as automatic as I would like. I have set up automatic investments, but that money goes into an escrow account and I still have to login and buy a fund. Is there a way to make this more automatic? I only have ETFs so far and no mutual funds. Are mutual funds more automatic? What about Target Date Funds?

Thanks

-Jacob
Even I was looking for such options with vanguard. But unfortunately its not there yet.

But I was preferring fractional shares and hence i moved to fidelity now.. Happy so far..

Topic Author
jacobacro
Posts: 10
Joined: Wed Mar 18, 2020 5:44 pm
Location: Springfield, Oregon, USA

Re: Automatic investing on Vanguard

Post by jacobacro » Fri May 22, 2020 10:15 pm

I helped my girlfriend get the 2050 Vanguard Target Date Fund. What happens to this fund in 2050? Does the end date only mean that the slow asset reallocation stops? I assume that if my girlfriend did not collect the money in 2050 then the money would continue to collect interest? Is she under any obligation to cash out in 2050?

-Jacob

vsquid
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Joined: Sat May 18, 2019 2:24 pm

Re: Automatic investing on Vanguard

Post by vsquid » Fri May 22, 2020 11:11 pm

jacobacro wrote:
Fri May 22, 2020 10:15 pm
I helped my girlfriend get the 2050 Vanguard Target Date Fund. What happens to this fund in 2050? Does the end date only mean that the slow asset reallocation stops? I assume that if my girlfriend did not collect the money in 2050 then the money would continue to collect interest? Is she under any obligation to cash out in 2050?

-Jacob
From Vanguard product page:
The funds provide broad diversification while incrementally decreasing exposure to stocks and increasing exposure to bonds as each fund’s target retirement date approaches. The funds continue to adjust for approximately seven years after that date until their allocations match that of the Target Retirement Income Fund.
So the fund will keep on adjusting for 7 years after the stated date. The composition will match Target Retirement Income Fund after that. I assume Vanguard would merge the fund to Target Retirement Income once the adjustments have completed.

Topic Author
jacobacro
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Joined: Wed Mar 18, 2020 5:44 pm
Location: Springfield, Oregon, USA

Re: Automatic investing on Vanguard

Post by jacobacro » Sat May 23, 2020 1:08 am

So the fund will keep on adjusting for 7 years after the stated date. The composition will match Target Retirement Income Fund after that. I assume Vanguard would merge the fund to Target Retirement Income once the adjustments have completed.
Thanks. That explains it.

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Cheez-It Guy
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Re: Automatic investing on Vanguard

Post by Cheez-It Guy » Sat May 23, 2020 8:02 am

If you really prefer to use ETFs, you may want to set up the automated investing in mutual funds as suggested, but then on some appropriate frequency (annually?), call Vanguard and ask them to convert your mutual funds to the matching ETF, assuming the selected mutual fund has one. This ability is unique to Vanguard, and is not a taxable event even if it occurs within a taxable investment account. You can convert the full balance or a partial balance, and continue your automated mutual fund investments thereafter.

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