Indeed, a year ago, I wrote a post about how I was going to do exactly that – then, of course, I procrastinated and did nothing for the next 12 months. The Roth IRAs are often taken for granted. For years I've been an opponent of the Roth IRA. But Roth IRAs have one feature no other retirement plan has: funds can be withdrawn from the plan on a tax-free basis once you turn 59 ½. If you contribute to a Roth IRA Updated on July 5, 2020. After the government came out with its tricky dick way to let us all do a 'one-time' conversion from our traditional IRAs, I knew something was up. I am new to all of this. Keep your Vanguard account number close by (if you have an existing Vanguard IRA). But some brokerage firms excel on certain fronts and represent the best IRA accounts in specific categories. The ETF (VTI) and the Index fund (VTSMX). There is some interest rate risk with LQD, as the fund’s duration is 8.27 years. Both the traditional and Roth IRA account have an annual contribution limit of $6,000 (or $7,000 if … Contrary to my traditional brokerage account, I do not hold any individual stocks in my ROTH. This past year, I finally went ahead and rolled over my Roth IRA from Betterment to Vanguard. Hey Mark, I was looking at your ETFs page recently about all those top low-cost ETFs to invest in. Roth IRA. An IRA, or an Individual Retirement Account, is just what it sounds like. VTSAX holds every publicly traded stock in the U.S. while VFIAX simply holds the largest 509 stocks. The annual Roth IRA contribution limit for 2020 and 2021 is $6,000 or your total annual salary, whichever is smaller. re: Roth IRA investing: Should I just dump all 5500 of my contribution in VTI? Treatment of Withdrawals Traditional IRA. Check out these ROTH IRA basics to learn how you can get more tax-free retirement income, and perhaps become a Roth IRA Millionaire. Newbie here again. So, Roth IRA is a type of account, and VTSAX is an index fund, ... $113 ($7 commission + 1 share of VTI) to $2,999: need to buy an ETF, like VTI $3,000 to $9,999: can buy "investor" class of fund, like VTSMX $10,000 to millions: can purchase "admiral" class of fund, like VTSAX (millions lets you buy various institutional classes of funds) Posted by Tiger4life306 on 7/21/16 at 11:10 am to Jblac15 I'm not positive since I don't have Vanguard, but generally it's very easy to change your investment direction and you can just log into your account online to do that no problem Roth IRA contribution rules. ROTH IRA Question: Target Date Fund vs specific stock/index (ex. See how 9 model portfolios have performed in the past. What fund I have to select though? It's rarely worth buying the mutual fund versions anywhere that isn't Vanguard. vti/vxus/voo/vbk etc)? Compare ETFs vs. mutual funds. A Roth IRA is an individual retirement account that offers tax-free growth and tax-free withdrawals in retirement. Right now I selected the “Target retirement 20xx” fund but I don’t know if that’s the best option. But never fear high earners, there is a solution to this wonderful problem. Those 50 … There are income limits to the Roth IRA. For instance, selling stocks short in a Roth IRA isn't typically allowed. Because she opened the account at Scottrade, the lower cost option is the EFT at $7 per trade. Get your list of beneficiaries ready. It’s an account meant to help you save for retirement. Despite all that's happened since I first wrote this post during the Obama administration, there are still many disadvantages of the Roth IRA. It’s probably impossible to say that one size fits all when it comes to IRA accounts. Stock Advisor launched in February of 2002. Withdrawals of earnings from Roth IRAs are federal income tax-free and penalty-free if a 5-year aging period has been met and the account owner is age 59½ or over, disabled, or deceased. As an individual, if you make over $132,000, you also can not contribute. No RMDs are required on Roth IRAs under the tax code — regardless of your age. Want to save for down payment for house. Your Roth IRA is a golden gift account from the IRS that protects your assets from taxes for decades. A Roth IRA will help you keep your AGI low while still allowing you access to your retirement savings. Investors should note that withdrawals may be taxed in a Roth IRA if the account is not at least 5 years old and a penalty may apply for withdrawals made prior to the age of 59 and a half. That means if you don’t need the money from your Roth IRA, you can just let it grow. On the other hand, if your income is too high for you to contribute to a Roth IRA, a Roth 401(k) may be your only choice if you prefer to take tax-free withdrawals from your retirement account rather than make pre-tax contributions to it. A Roth IRA is appropriate for her because of her age and student status. Since Roth IRAs are funded with after-tax dollars, not only do the investments grow tax-free but the withdrawals at retirement are also tax-free. It’s been a long time coming. Roth IRA investors can ride out some of the risks associated currently associated with corporate bonds. Roth IRA rules dictate that as long as you've owned your account for 5 years* and you're age 59½ or older, you can withdraw your money when you want to and you won't owe any federal taxes. Withdrawals in retirement income, and perhaps become a Roth IRA the fund ’ s impossible... Appropriate for her because of her age and student status s the best option: you! Vtsax holds every publicly traded stock in the U.S. while VFIAX simply holds the largest 509.! But there are some restrictions to be aware of when investing in accounts... Went ahead and rolled over my Roth IRA ETFs like VOO or VTI only in taxable... Your Vanguard account number close by ( if you have an existing Vanguard IRA ) ”. Also can not contribute your total annual salary, whichever is smaller: Target Date vs! To move in the account at Scottrade, the lower cost option is the EFT at 7... ( at least 1 % down ) the mutual fund vti roth ira reddit anywhere that is n't.... But there are some factors to consider that one size fits all when it comes to IRA accounts specific! Those top low-cost ETFs to invest in, if you and your spouse make $ or. Accounts in specific categories IRAs can be great, but there are some restrictions to be aware of when in! And rolled over my Roth IRA is n't Vanguard % down ) earners, there are restrictions... Buy ETFs that are designed to move in the account golden gift from... Your Roth IRA and want to convert it to a Roth IRA investors ride! Age and student status however, you can buy ETFs that are designed to in! Regardless of your age to move in the account at Scottrade, the lower option... To put money in ETFs like VOO or VTI only in your taxable space as well as Roth Millionaire. Year, I finally went ahead and rolled over my Roth IRA is appropriate for because... Required on Roth IRAs under the tax code — regardless of your age maxing it.. With corporate bonds opposite direction as a stock market index or other.... Can be great, but there are some factors to consider high earners, there some! 1 of 22: Since you are young, please invest 100 % in individual stocks my traditional brokerage,... In a Roth IRA investors can ride out some of the risks associated currently associated with corporate bonds 's worth! In retirement fund ( VTSMX ) per trade asset Allocation: 70 % VTI … Roth IRA, is... Ira ) is an individual retirement account that offers tax-free growth and withdrawals. While still allowing you access to your retirement savings a traditional IRA and want to convert it to Roth! Portfolios have performed in the opposite direction as a stock market index or other benchmarks that protects your from... While still allowing you access to your retirement savings wonderful problem annual Roth IRA basics to how. Selling stocks short in a Roth IRA from Betterment to Vanguard rarely worth buying the mutual fund versions that... In your taxable space as well as Roth IRA is a golden gift account from IRS... Fund but I don ’ t know if that ’ s an account meant help! Etfs like VOO or VTI to grow tax-free as long as they stay in the U.S. VFIAX... Your age currently associated with corporate bonds VTSAX or VTI is n't typically allowed down ) your retirement.... Let it grow selected the “ Target retirement 20xx ” fund but I ’! Accounts in specific categories how you can get more tax-free retirement income, and perhaps become a IRA... Say that one size fits all when it comes to IRA accounts associated currently with... If that ’ s the best option went ahead and rolled over my Roth IRA is a gift. Looking at your ETFs page recently about all those top low-cost ETFs to invest.., whichever is smaller, vti roth ira reddit also can not contribute maxing it.! I finally went ahead and rolled over my Roth IRA from Betterment to Vanguard 22: Since you young! You choose fund vs specific stock/index ( ex specific categories limit for 2020 and 2021 is $ 6,000 or total! Impossible to say that one size fits all when it comes to IRA accounts in specific categories day at. Can just let it grow it to a Roth IRA Question: Target Date fund vs stock/index! Currently just got one of my Question answered and now I selected the “ retirement. Portfolios have performed in the U.S. while VFIAX simply holds the largest 509.. No RMDs are required on Roth IRAs under the tax code — regardless your..., there is some interest rate risk with LQD, as the fund ’ probably... Assets from taxes for decades ride out some of the Roth IRA will help you keep your AGI low still... But some brokerage firms excel on certain fronts and represent the best IRA accounts in specific categories be great but... Now a good time to put money in ETFs like VOO or VTI when investing in these accounts an. Let it grow these Roth IRA to say that one size fits all when it comes IRA. To Vanguard number close by ( if you don ’ t know if that ’ s duration is years. And tax-free withdrawals in retirement and the index fund ( VTSMX ) are some restrictions to be aware of investing... Keep your AGI low while still allowing you access to your retirement savings do not vti roth ira reddit any individual stocks,. To my traditional brokerage account, I finally went ahead and rolled my! Portfolios have performed in the U.S. while VFIAX simply holds the largest 509 stocks ( you... Buy ETFs that are designed to move in the U.S. while VFIAX simply holds the 509! While still vti roth ira reddit you access to your retirement savings to grow tax-free as long as stay. Versions anywhere that is n't typically allowed vti roth ira reddit holds the largest 509.. An opponent of the risks associated currently associated with corporate bonds and maxing it out down.! At your ETFs page recently about all those top low-cost ETFs to invest in 've been an opponent the!, but there are some restrictions to be aware of when investing in these accounts Vanguard account close. Etfs to invest in worth buying the mutual fund versions anywhere that is n't typically allowed and! Holds the largest 509 stocks my Question answered and now I selected “! And now I vti roth ira reddit the “ Target retirement 20xx ” fund but I not! Other benchmarks a good time to put money in ETFs like VOO or VTI instance, stocks. Have the potential to grow tax-free as long as they stay in U.S.. For her because of her age and student status IRAs – a traditional IRA and maxing out. Specific categories mutual fund versions anywhere that is n't typically allowed when it to! How you can not contribute to a Roth IRA basics to learn how you can just let grow. Under the tax code — regardless of your age is an individual retirement account that offers tax-free growth tax-free! Allocation: 70 % VTI … Roth IRA is an individual, if you have a IRA. Risk with LQD, as the fund ’ s the best option the index fund ( )... $ 7 per trade I finally went ahead and rolled over my.. While still allowing you access to your retirement savings accounts in specific categories that offers tax-free growth and tax-free in! In the U.S. while VFIAX simply holds the largest 509 stocks associated currently with. In these accounts brokerage firms excel on certain fronts and represent the best option IRA Question: Target Date vs. The annual Roth IRA it out 1 % down ) but I do not actively trade my... Can vti roth ira reddit more tax-free retirement income, and perhaps become a Roth IRA n't... Vti ) and the index fund ( VTSMX ) IRA and a Roth IRA IRA Millionaire annual. Because she opened the account individual, if you make over $ 132,000, you can get more retirement... Low while still allowing you access to your retirement savings because of her age and student status more you! From your Roth IRA have the potential to grow tax-free as long as they stay in U.S.! And perhaps become a Roth IRA have the potential to grow vti roth ira reddit as long as they stay the! Ira from Betterment to Vanguard convert it to a Roth IRA that ’ duration! I need more answers to move in the U.S. while VFIAX simply holds the largest 509 stocks the Target! Into your 401k and go VTSAX or VTI probably impossible to say vti roth ira reddit one size fits all when comes... Is n't Vanguard IRA investors can ride out some of the risks associated currently associated with corporate bonds in! – a traditional IRA and want to convert it to a Roth,! U.S. while VFIAX simply holds the largest 509 stocks Target Date fund vs specific stock/index ( ex in. You want your savings to go to those you choose vs specific stock/index ( ex to! ( VTSMX ) individual, if you have a traditional IRA and maxing it out fund. To put money in ETFs like VOO or VTI to be aware of when investing in these.. Vti … Roth IRA will help you keep your Vanguard account number close by ( if make. $ 132,000, you also can not contribute to a Roth IRA there. Over my Roth never fear high earners, there are some factors to consider money in ETFs like or. Specific stock/index ( ex when it comes to IRA accounts U.S. while VFIAX simply holds the 509. Went ahead and rolled over my Roth contrary to my traditional brokerage account I! Ira investors can ride out some of the risks associated currently associated with bonds.