BGOL Investors, got a Roth IRA question....

[doe moe]

My personally managed Roth IRA is currently in VWELX index fund.

It's a mix of 50% stocks and 50% bonds. It's not an aggressive fund because of the large percentage of bonds that it's holding.

I want to move it to another index fund that is more aggressive.

Just trying to see the best method to make this happen without penalty since I'm not seeking to withdraw.

I'll keep digging around for a solution before I call Vanguard directly.

 

[bkqns718]

Sometimes these websites have Wizards where you can target an aggressive funds where its 70-80% equity and it would be labeled "Retire at <Blah Blah Year>" i opted for a fund that targets retirement at 55 which and it was pretty seamless this was with principal....

They should automatically allocate vanguard I have never use for retirement or roth however

 

[doe moe]

 

[Flawless]

All you need is VOO or the mutual fund equivalent VFIAX

​

 

[doe moe]

All you need is VOO or the mutual fund equivalent VFIAX

​

My first fund is VFIAX, I also have VSMAX and VTSAX.

I'm trying to dump the current fund and move over to VIMAX.

 

[Flawless]

My first fund is VFIAX, I also have VSMAX and VTSAX.

I'm trying to dump the current fund and move over to VIMAX.

VFIAX already includes midcap companies, I guess if you want more midcap some Vimax could work, you could also ad 10-20% of a international fund.

 

[APOPHIS]

Good topic.
I've been wanting to get into a more aggressive fund myself.
Reading and researching.

 

[doe moe]

Good topic.
I've been wanting to get into a more aggressive fund myself.
Reading and researching.

My 401K with the job is doing very well with the index funds I have selected.

It's the Roth IRA I'm managing on my own that I need some info on the best way to dump one fund and move all the money over to another without any penalties.

My other thought was keep the one I don't want for it's strong bond stability and just add the new fund to my Roth IRA.

 

[850credit]

My 401K with the job is doing very well with the index funds I have selected.

It's the Roth IRA I'm managing on my own that I need some info on the best way to dump one fund and move all the money over to another without any penalties.

My other thought was keep the one I don't want for it's strong bond stability and just add the new fund to my Roth IRA.

I don't know what "very well" is. I guess I should focus on return percentage rather than monetary value.

I have six figures which sounds good to me but I wonder am I missing out?

 

[DC_Dude]

@Madrox @HellBoy - any thoughts?

I was going to suggest Voo or VTI.

 

[Flawless]

My 401K with the job is doing very well with the index funds I have selected.

It's the Roth IRA I'm managing on my own that I need some info on the best way to dump one fund and move all the money over to another without any penalties.

My other thought was keep the one I don't want for it's strong bond stability and just add the new fund to my Roth IRA.

Keep is mind the market is at a record high right now and we could have a sell off coming soon.

 

[doe moe]

Keep is mind the market is at a record high right now and we could have a sell off coming soon.

For sure, that's why I'm researching the info I need now so I'm ready for the dip.

 

[Madrox]

This is tricky from the outside, but I would recommend that:

- You DEF speak with the folks at Vanguard just to get some assurances on how to move into whatever w/o any penalties or unforseen fees
- Make sure nothing you're planning on moving to is redundant or has too much overlap
- Depending on your age, you might want to either keep some of the bond exposure (more if you fittna retire sometime soon) or pick an appropriate target date joint like someone else mentioned.
My homegirl went that route and I know hers has a mix of Total Market/International/Bonds that will adjust automatically over time (aggressive now.. less aggressive later as you near your target retirement date).. THIS is what she has, for reference.
-... but I know you said you self manage so I take that as you want to try to be more hands on/ aggressive (?) ... I'm no expert and I manage my own small IRA too, but my goal is to have most of it in VTI, just to keep it as straight forward as possible with exposure to equities. I'm 45, no bonds yet, but I started late.

 

[HellBoy]

@Madrox @HellBoy - any thoughts?

I was going to suggest Voo or VTI.

Sorry no suggestion here. My 401k is managed for security. Anything my ROTH does is gravy.

 

[doe moe]

I appreciate all the info Family!

I've reached out to Vanguard using secure email mail through my account.

I'll share their reply once received in the next 24 to 48 hours.

 

[Madrox]

Sorry no suggestion here. My 401k is managed for security. Anything my ROTH does is gravy.

I neglected my 401k for YEARS, then over the pandemic I hired some 3rd party (Blooom) to re-allocate (this was before I knew much about portfolio construction).

I think they did ok, but as I learned more and realized that I didn't want to constantly tinker with it, I ended up cancelling the monthly management by them and have let it ride since (no rebalancing or any of that).

My fund options don't include a total market, so the holdings are broken up into more funds than I'd LIKE (because of the diff expense ratios), but it comes out to:

VIIIX			S&P 500	34%
VTMNX			Int's (Developed)	23%
VMCIX			US Mid Cap	14%
VSCIX			US Small Cap	10%
DFEMX			Emergining Mar.	9%
DODIX			US Fixed	5%
DFREX			Real Estate	3%
DFGBX			Global Fixed	2%

	Domestic	58%
	International	32%
	Fixed Income	10%
	Equities	90%
	Fixed Assets	10%

(this is my own math and math is not my strong suit)

..my IRA I have a Total Market Fund, a Total International Fund and 3 or 4 individual companies. It's basically equal weighted atm but in a perfect world I'll be rebalancing or DCA'ing more into the Total Market funds over time. It's def not what the pros would recommend.

 

[Jupiter-One]

Why are you using an index fund? HOw

My personally managed Roth IRA is currently in VWELX index fund.

It's a mix of 50% stocks and 50% bonds. It's not an aggressive fund because of the large percentage of bonds that it's holding.

I want to move it to another index fund that is more aggressive.

Just trying to see the best method to make this happen without penalty since I'm not seeking to withdraw.

I'll keep digging around for a solution before I call Vanguard directly.

Why are you using an index fund? What's your age range? The Index Fund will almost never out perform the S&P. There will be a lot of market turbulence soon so it may be good time to take advantage of a concept called Dollar Cost Averaging, which means you leave the index fund and find an aggressive or even moderately aggressive fund...then you keep investing the same dollar amount every month NO MATTER what the market does. This works because when the market is down, yes, your account value will go down, but now you're getting more shares for the same price, and when those shares within the mutual grow again, you see a sudden growth in your account - this has been researched and the process always does better than an index fund on average. Plus your in a Roth IRA so all of that growth is Tax Free...If you are older, say in your late sixties or seventies, then yes stay in Index Fund...But if you're between 30 - 55 I would say now is a good time to be fully vested aggressively or moderately aggressive...Index funds do invest in stocks but they are moderately guided, they invest in stocks which have a track record of producing consistent divended and reinvesting them back into their strategy, so the stock yield within an index fund will usually be lower than if you simply left the index and got directly into a growth/aggressive growth retail fund.

Just my thoughts pimp

 

[Jupiter-One]

I neglected my 401k for YEARS, then over the pandemic I hired some 3rd party (Blooom) to re-allocate (this was before I knew much about portfolio construction).

I think they did ok, but as I learned more and realized that I didn't want to constantly tinker with it, I ended up cancelling the monthly management by them and have let it ride since (no rebalancing or any of that).

My fund options don't include a total market, so the holdings are broken up into more funds than I'd LIKE (because of the diff expense ratios), but it comes out to:

VIIIX			S&P 500	34%
VTMNX			Int's (Developed)	23%
VMCIX			US Mid Cap	14%
VSCIX			US Small Cap	10%
DFEMX			Emergining Mar.	9%
DODIX			US Fixed	5%
DFREX			Real Estate	3%
DFGBX			Global Fixed	2%

	Domestic	58%
	International	32%
	Fixed Income	10%
	Equities	90%
	Fixed Assets	10%

(this is my own math and math is not my strong suit)

..my IRA I have a Total Market Fund, a Total International Fund and 3 or 4 individual companies. It's basically equal weighted atm but in a perfect world I'll be rebalancing or DCA'ing more into the Total Market funds over time. It's def not what the pros would recommend.

Sorry I just saw this and realized you already understood DCA my bad

 

[Jupiter-One]

Keep is mind the market is at a record high right now and we could have a sell off coming soon.

I neglected my 401k for YEARS, then over the pandemic I hired some 3rd party (Blooom) to re-allocate (this was before I knew much about portfolio construction).

I think they did ok, but as I learned more and realized that I didn't want to constantly tinker with it, I ended up cancelling the monthly management by them and have let it ride since (no rebalancing or any of that).

My fund options don't include a total market, so the holdings are broken up into more funds than I'd LIKE (because of the diff expense ratios), but it comes out to:

VIIIX			S&P 500	34%
VTMNX			Int's (Developed)	23%
VMCIX			US Mid Cap	14%
VSCIX			US Small Cap	10%
DFEMX			Emergining Mar.	9%
DODIX			US Fixed	5%
DFREX			Real Estate	3%
DFGBX			Global Fixed	2%

	Domestic	58%
	International	32%
	Fixed Income	10%
	Equities	90%
	Fixed Assets	10%

(this is my own math and math is not my strong suit)

..my IRA I have a Total Market Fund, a Total International Fund and 3 or 4 individual companies. It's basically equal weighted atm but in a perfect world I'll be rebalancing or DCA'ing more into the Total Market funds over time. It's def not what the pros would recommend.

I completely understand the expense ratio thing. Have you thought about incorporating some moderately aggressive ETF's into your portfolio? ETFS always have much lower expense ratios because they do not buy and sell (thats part of why expense ratios are higher as you know) - ETFs have a good track record of providing moderate growth with much lower expense ratios because of the way they are traded. I mean we're talking about a 200 to 300 basis point difference in expense ratios

 

[doe moe]

Why are you using an index fund? HOw

Why are you using an index fund? What's your age range? The Index Fund will almost never out perform the S&P. There will be a lot of market turbulence soon so it may be good time to take advantage of a concept called Dollar Cost Averaging, which means you leave the index fund and find an aggressive or even moderately aggressive fund...then you keep investing the same dollar amount every month NO MATTER what the market does. This works because when the market is down, yes, your account value will go down, but now you're getting more shares for the same price, and when those shares within the mutual grow again, you see a sudden growth in your account - this has been researched and the process always does better than an index fund on average. Plus your in a Roth IRA so all of that growth is Tax Free...If you are older, say in your late sixties or seventies, then yes stay in Index Fund...But if you're between 30 - 55 I would say now is a good time to be fully vested aggressively or moderately aggressive...Index funds do invest in stocks but they are moderately guided, they invest in stocks which have a track record of producing consistent divended and reinvesting them back into their strategy, so the stock yield within an index fund will usually be lower than if you simply left the index and got directly into a growth/aggressive growth retail fund.

Just my thoughts pimp

I'm 51.

I contribute monthly to VFIAX, VTSAX, VSMAX and VWELX(This is my Roth IRA), all total it comes out to $1,450 per month and I've been doing this since 2018.

I also doing 12% through my job and they match 4% so in all I'm contributing 16% of my salary to my 401K.

There are two stocks I buy monthly as well. Two Amazon and two Google.

 

[Madrox]

Sorry I just saw this and realized you already understood DCA my bad

All good, I think your response was meant for Doe Moe anyway, so thanks for going in-depth.

 

[Madrox]

I completely understand the expense ratio thing. Have you thought about incorporating some moderately aggressive ETF's into your portfolio? ETFS always have much lower expense ratios because they do not buy and sell (thats part of why expense ratios are higher as you know) - ETFs have a good track record of providing moderate growth with much lower expense ratios because of the way they are traded. I mean we're talking about a 200 to 300 basis point difference in expense ratios

Again, me personally, the handful of annoying funds that I mentioned are in my 401k with the job so it is what it is (for now).

I do have low-fee ETFs in my IRA (VTI and VXUS).

@doe moe is the OP tryna go from the Wellington Fund --> to a more streamlined and aggressive portfolio.

(sorry for the confusion, I know I added mad interference)

 

[RoomService]

I'm 51.

I contribute monthly to VFIAX, VTSAX, VSMAX and VWELX(This is my Roth IRA), all total it comes out to $1,450 per month and I've been doing this since 2018.

I also doing 12% through my job and they match 4% so in all I'm contributing 16% of my salary to my 401K.

There are two stocks I buy monthly as well. Two Amazon and two Google.

It’s funny when you start running the numbers just how late in the game, starting at the age of 30 compared to 20 years old and investing in an ETF for 40 years instead of 30 years.

Starting 10 years early is almost three times as much profit if you retire at 60. Started with $6000 and invested $500 a month for 40 years with a 10% profit return in an ETF. 3.2 mill with only $246,000 in contribution. Compared to 1.3 mil with the total contribution of $186,000

 

[doe moe]

It’s funny when you start running the numbers just how late in the game, starting at the age of 30 compared to 20 years old and investing in an ETF for 40 years instead of 30 years.

Starting 10 years early is almost three times as much profit if you retire at 60. Started with $6000 and invested $500 a month for 40 years with a 10% profit return in an ETF. 3.2 mill with only $246,000 in contribution. Compared to 1.3 mil with the total contribution of $186,000

FACTS!!!

 

[DC_Dude]

It’s funny when you start running the numbers just how late in the game, starting at the age of 30 compared to 20 years old and investing in an ETF for 40 years instead of 30 years.

Starting 10 years early is almost three times as much profit if you retire at 60. Started with $6000 and invested $500 a month for 40 years with a 10% profit return in an ETF. 3.2 mill with only $246,000 in contribution. Compared to 1.3 mil with the total contribution of $186,000

Facts man. Shit makes me sick because I did an analysis of the money I was sending for student loans and put it into one of those investment calculators on top of what I been contributing to my 401K I probably would have an additional 250K by now assuming a 10% return on that money that went to student loans.

Granted those loans were for graduate school and what I would have made staying at my old job compared to now, I’ve made that amount up (salary doubled and some), but still just to think about it is cringing.

Working a part time job for 12 years that offered a 401K helped also.

 

[HellBoy]

Facts man. Shit makes me sick because I did an analysis of the money I was sending for student loans and put it into one of those investment calculators on top of what I been contributing to my 401K I probably would have an additional 250K by now assuming a 10% return on that money that went to student loans.

Thats the reason we should pass on this knowledge to our kids and young family members. That head start is fantastic.

 

[Aww Skeet Skeet!]

I don't have any clear advice. You have a Roth. I believe, don't quote me, within an IRA (both traditional and Roth) you can buy and sell [capital gains or not] it won't be taxed at the time you sell (only withdrawals are taxed for traditional, and Roth IRA is tax free assuming you've had the Roth for more than 5 years). Note buying/selling isn't withdrawing.

"Investors can even buy and sell stocks and other assets repeatedly for large gains in a traditional IRA account and not be subject to capital gains taxes or taxes on dividends. However, withdrawals from a traditional IRA are taxed."

"In addition, Roth IRA investments are not subject to capital gains or dividend taxes, meaning they'll grow faster than they would in a taxed account."

https://money.usnews.com/investing/investing-101/articles/brokerage-account-vs-ira-which-should-you-invest-in#:~:text=Investors%20can%20even%20buy%20and,a%20traditional%20IRA%20are%20taxed.

Active Trading In A Roth IRA: 5 Key Things To Consider | Bankrate

Because the Roth IRA eliminates a major cost of trading, taxes, some investors think they can actively trade their way to even greater gains.

www.bankrate.com

What Is The Roth IRA 5-Year Rule? | Bankrate

The Roth IRA is a retirement saver's dream. The Roth IRA five-year rule mandates a five-year waiting period for tax-free withdrawals of earnings.

www.bankrate.com

I don't own VWELX, but I see that 0.25% expense ratio and there's probably some money to be saved there. Since this is a mutual fund, be sure there aren't any fees when selling it (eg back loaded fees on B-share MFs). How aggressive are you talking? An all equity index fund is aggressive.

 

[DC_Dude]

 

[Madrox]

Facts man. Shit makes me sick because I did an analysis of the money I was sending for student loans and put it into one of those investment calculators on top of what I been contributing to my 401K I probably would have an additional 250K by now assuming a 10% return on that money that went to student loans.

Granted those loans were for graduate school and what I would have made staying at my old job compared to now, I’ve made that amount up (salary doubled and some), but still just to think about it is cringing.

For real. I used to dwell on that too. But my mindset now is that even though I started late, I'm happy that I'm on a path to growing my money as much as I possibly can.

Thats the reason we should pass on this knowledge to our kids and young family members. That head start is fantastic.

DEF the added benefit of financial literacy. Being to help guide the ppl you care about on a better/smoother path than you had is rewarding af.

I'm still trying to refine my approach though, as far as convincing folks to at least start small and stick with it.

 

[An RnB Thug]

Man invest YOUR OWN MONEY.
Stop giving it to cacs who get paid whether you lose or make money.
I'm amazed that so many people keep following outdated and old fashion ways to make bread. You have a Crypto bullrun about to take off and you giving bread to a Roth IRA?!?!?! #My2Cent

 

[DC_Dude]

For real. I used to dwell on that too. But my mindset now is that even though I started late, I'm happy that I'm on a path to growing my money as much as I possibly can.



DEF the added benefit of financial literacy. Being to help guide the ppl you care about on a better/smoother path than you had is rewarding af.

I'm still trying to refine my approach though, as far as convincing folks to at least start small and stick with it.

Yup.

 

[Aww Skeet Skeet!]

Man invest YOUR OWN MONEY.
Stop giving it to cacs who get paid whether you lose or make money.
I'm amazed that so many people keep following outdated and old fashion ways to make bread. You have a Crypto bullrun about to take off and you giving bread to a Roth IRA?!?!?! #My2Cent

But his ROTH is self directed. There are expense fees but Crypto has them too... And they ain't cheap.


But There's room for both, right? I would say it depends on your risk tolerance and how often you want to look at your investments. Crypto has been asleep until recently.

And even with the latest run, my bread/return from my brokerage account is far out in front. Got in at 2017/2018. During a spike... Ouch.

 

[An RnB Thug]

But his ROTH is self directed. There are expense fees but Crypto has them too... And they ain't cheap.


But There's room for both, right? I would say it depends on your risk tolerance and how often you want to look at your investments. Crypto has been asleep until recently.

And even with the latest run, my bread/return from my brokerage account is far out in front. Got in at 2017/2018. During a spike... Ouch.

Stocks, Roth IRAs...401ks
Are all SLOW MONEY.
I made well over 1 million in 2018 & then again in 2021. Plus you make the money OFF THE GRID.
I'm not gonna convince anybody that Crypto is a FAR better option. If you know you know.

 

[Madrox]

I believe I always contributed, but it was minimal for a decade and change. I think there are a few things at play:

1. When you're young, retirement doesn't even seem real. And depending how much dough you're making (or not) when you starting out, your first instinct is to try to keep as much money close as possible. Unless you have someone in your ear that can explain how advantageous retirement accounts/savings can be, folks tend to view that money as just an extra expense instead of what it can become.

2. I didn't realize how many folks have no idea what is actually IN their retirement accounts. Some think it's just a bank account or magic money savings machine, not realizing that there are actual businesses behind these funds, that will compound your money backed by the machine that is the American Economy (VTI/S&P, at least).

When I finally put that in perspective (way too late), that's what really turned me on to things. At a base level, in my mind, this whole investing thing is the easiest way to actually become a business owner w/o the bullshit and friction. As long as you're patient it really can be a magic money machine and grow whatever money you DO have.

Like Marks says the key is to BE invested.

 

[Madrox]

But There's room for both, right?

I think so, for sure.