Roth IRA-Vanguard

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togajord40
Posts: 5
Joined: Fri Oct 20, 2017 9:20 am

Roth IRA-Vanguard

Post by togajord40 »

Hey everyone,
I just invested a max lump sum of 5500 dollars into a Vanguard Roth IRA before the end of the year, so I can begin to invest in regularly at the beginning of 2018. I would like it to be in a Target 2050 retirement mutual fund, but when I signed up for my Vanguard account, it didn't ask me what I wanted to invest in, and automatically put my funds into a money market settlement fund. I just might not understand the website interface at this point, but is the settlement fund basically a "middle man" before I can put my money into a Target fund? Is there a way to have the money go directly to a Target fund without having to have this extra step of keeping it in the settlement fund? Any education on this would be greatly appreciated!

Thanks!
indexonlyplease
Posts: 1571
Joined: Thu Apr 30, 2015 12:30 pm
Location: Florida

Re: Roth IRA-Vanguard

Post by indexonlyplease »

togajord40 wrote: Tue Dec 12, 2017 5:35 am Hey everyone,
I just invested a max lump sum of 5500 dollars into a Vanguard Roth IRA before the end of the year, so I can begin to invest in regularly at the beginning of 2018. I would like it to be in a Target 2050 retirement mutual fund, but when I signed up for my Vanguard account, it didn't ask me what I wanted to invest in, and automatically put my funds into a money market settlement fund. I just might not understand the website interface at this point, but is the settlement fund basically a "middle man" before I can put my money into a Target fund? Is there a way to have the money go directly to a Target fund without having to have this extra step of keeping it in the settlement fund? Any education on this would be greatly appreciated!

Thanks!
Yes, the money market is a settlement fund. And Yes, you can direct money monthly from your checking or saving directly into the Target 2050. I do both. I put money in our Roth each month. I also, have money in my money market account that invest auto each month into a Vanguard Fund.

You can set it up online but I find it easy to call them and get help. Tell them to move your $5500 into the Roth and then set up monthly max for Jan 2018.
Topic Author
togajord40
Posts: 5
Joined: Fri Oct 20, 2017 9:20 am

Re: Roth IRA-Vanguard

Post by togajord40 »

indexonlyplease wrote: Tue Dec 12, 2017 6:04 am
togajord40 wrote: Tue Dec 12, 2017 5:35 am Hey everyone,
I just invested a max lump sum of 5500 dollars into a Vanguard Roth IRA before the end of the year, so I can begin to invest in regularly at the beginning of 2018. I would like it to be in a Target 2050 retirement mutual fund, but when I signed up for my Vanguard account, it didn't ask me what I wanted to invest in, and automatically put my funds into a money market settlement fund. I just might not understand the website interface at this point, but is the settlement fund basically a "middle man" before I can put my money into a Target fund? Is there a way to have the money go directly to a Target fund without having to have this extra step of keeping it in the settlement fund? Any education on this would be greatly appreciated!

Thanks!
Yes, the money market is a settlement fund. And Yes, you can direct money monthly from your checking or saving directly into the Target 2050. I do both. I put money in our Roth each month. I also, have money in my money market account that invest auto each month into a Vanguard Fund.

You can set it up online but I find it easy to call them and get help. Tell them to move your $5500 into the Roth and then set up monthly max for Jan 2018.

So even though I signed up for the Roth, my money wasn't invested in a Roth yet? Does my money have to be in a settlement fund before I move it into a Target fund?

Thanks for all of the info!
spoonfork
Posts: 36
Joined: Fri Oct 13, 2017 9:16 pm

Re: Roth IRA-Vanguard

Post by spoonfork »

If it's in your Roth settlement funds then you have contributed to your Roth. You can then move that money into index funds or ETFs or into a target date fund. And yes you can bypass the settlement fund entirely when you make the contribution. On my account I just tell them to take money from my bank and put it directly into the 2050 retirement.
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CAsage
Posts: 3526
Joined: Sun Mar 27, 2016 6:25 pm

Re: Roth IRA-Vanguard

Post by CAsage »

Think of the settlement fund like the mailbox on your house - it's an interim placeholder. Stuff goes in there, and it can sit for a while, but then you need to move it inside. I get monthly rollovers from a prior employer, and the check goes into my IRA settlement fund, and as soon as I see it, I buy more shares of my fund. They are required now due to .... complexities in brokerage accounts.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.
Engineer250
Posts: 1082
Joined: Wed Jun 22, 2016 1:41 pm

Re: Roth IRA-Vanguard

Post by Engineer250 »

Yes you contributed to your Roth. Settlement fund is just a money market fund. Technically your money is invested, just in a money market.

There are a few drop down menu items on your balances page. One should be "buy". With that you can buy shares in the mutual fund you want to move your money into.

There is also a drop down for "contribute to my IRA" or something to that effect. You can do a one time with that or recurring. That will give you the option of where the money will go. When you enter into the options for that it will let you pick any funds you already have money in or select a new fund or ETF or stock.

If any of that is unclear you can come back here. I agree Vanguard's interface isn't super obvious if you are new to it but it's pretty easy to learn when you get used to their lingo.
Where the tides of fortune take us, no man can know.
rkhusky
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Joined: Thu Aug 18, 2011 8:09 pm

Re: Roth IRA-Vanguard

Post by rkhusky »

Note that within your Roth account you can have a number of funds - you could have a money market fund, a US stock fund, an International fund, a bond fund, etc. You can transfer between these at will with no cost via Vanguard's web site, subject only to Vanguard's frequent trading policy - after you sell a fund in an account, you can't buy that same fund in that account for 30 days via the web site. You can buy and then sell the next day, you can buy and then buy some more, you can sell and then sell some more, but you just can't sell and then buy within 30 days (unless you do it by mail or set up a recurring transaction). And Vanguard keeps track of that and the web site won't let you do it.
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