Vanguard is expensive when you buy ETFs or stocks, or even non Vanguard mutual funds-that is when Vanguard acts as a broker.

im 24 but in the same boat...thoroughly confused...I think i've settled on vanguard for my acct., but am confused on which way to go. For instance, Vanguard Target Retirement 2045 Fund Summary...how is this different from just opening a roth ira with vanguard? In the 2045 do they just preselect your funds and in a roth you pick your own or what? Sorry for newb talk but i've been reading and can't find an answer to this specific ?


another question I have would have to do with if I opened the acct. by april 17th or whatever. coming up with the 4k is not a problem as I have a lot more than that in an HSBC high yield acct. So should I go ahead and open now, contribute the 4k and be done with it? I've already filed taxes if that matters.

Once again thanks for being patient with my incoherant babbling.

Minoritydan said:pwiddy said:im 24 but in the same boat...thoroughly confused...I think i've settled on vanguard for my acct., but am confused on which way to go. For instance, Vanguard Target Retirement 2045 Fund Summary...how is this different from just opening a roth ira with vanguard? In the 2045 do they just preselect your funds and in a roth you pick your own or what? Sorry for newb talk but i've been reading and can't find an answer to this specific ?


another question I have would have to do with if I opened the acct. by april 17th or whatever. coming up with the 4k is not a problem as I have a lot more than that in an HSBC high yield acct. So should I go ahead and open now, contribute the 4k and be done with it? I've already filed taxes if that matters.

Once again thanks for being patient with my incoherant babbling.

You don't have an understanding of how the TR 2045 works, read the info on it or call vanguard directly and inquire with them.


Open now, and add 8k. 4k for 2006, 4k for 2007.

obviously I don't understand it...even after reading. Perhaps I do understand the fund...what I do not understand is which one I should go with...Perhaps this has been covered before and I just don't see it. Also when you say add 8k now, the full 8k would have to be done before the 17th? I guess I can call them and talk to them about it...


edit** so i guess within the TR 2045 it can be a roth ira no?**

I opened my first Roth IRA last year - I did it at ING Direct because I had a savings account there and at the time I was attracted by the simple easy-to-understand list of ING Funds.

Now that I have learned more (thanks Fatwallet) I realize I am basically getting screwed by ING due to the tiny number of funds available and the high fees on them, and I am looking at opening a new Roth at Vanguard. I assume I can request a rollover from the funds in my ING account, but are there any penalties or losses associated with rolling over a Roth account? Does the amount I rollover count towards my annual contribution limit?:

What benefits do you get from using a broker like Vanguard as opposed to going with like an ING or E*Trade Roth account?

Dearth thanks a ton for the input. I'm thinking I might be best to switch from Etrade to Vanguard. I have 4K to put in and could probably round up another 1K to avoid the charge. I know very little about buying stocks at this point, I'm trying to research as quickly as possible but it seems like the funds might be a better right for right now. Hopefully E*Trade will free my funds without charging me an account closing fee. Do I need to make two seperate contributions a 4K and 1K or can I just contribute 5K in one lump sum and assume they'll release how to split the contribution years? Thanks again.

llcwannabe said:Dearth thanks a ton for the input. I'm thinking I might be best to switch from Etrade to Vanguard. I have 4K to put in and could probably round up another 1K to avoid the charge. I know very little about buying stocks at this point, I'm trying to research as quickly as possible but it seems like the funds might be a better right for right now. Hopefully E*Trade will free my funds without charging me an account closing fee. Do I need to make two seperate contributions a 4K and 1K or can I just contribute 5K in one lump sum and assume they'll release how to split the contribution years? Thanks again.

I saw your other thread(s).... their right next time search I opened my Roth in February and all the pertinent info I needed was in stickies or searches.

But anyhow when you open with Vanguard online they walk you right thru similar to opening any financial account online, they'll link to your checking account etc. You say you already have an ETrade Roth, remember you can only contribute $4,000/year to a Roth so if you have some 2006 contributions already keep that in mind. You can contribute a full $4,000 for 2006 or 2007 or both depending on what you might have already put in your ETrade Roth towards 2006. There will be a drop down menu asking what year you'd like the contribution to be credited towards.

So if you've already put say $2,500 into your Etrade Roth for 2006 you can put another $1,500 plus whatever you'd like for 2007. Remember most funds at Vanguard are $3,000 min and don't worry too much if you can't break $5,000 right off the bat the fee is only $10 a year and they give you the option to pay the fee separate from your contribution. Hopefully you'd only be sub $5k for one year.

There was a post on this forum not too long ago about why to avoid "Target Retirement Funds"

Whatever company you choose, the most important thing is the fund manager.

Look for a manager that's been there for a while, and more importantly look at their 10-year track record.

Avoid funds that have been "hot" over the past few years, it's well known that these funds get too much money and end up underperforming.

Skinz said:Can anyone link a site that explains Roth IRA's in a simple easy read, without all the fancy dooda about how you will soon be a millionare trust us.

I'll be 19 soon and I want to open one with the money I will be making through internships this year, I heard you need to invest over the next few years as well but next year with my busy schedule I probably won't be able to work. I'll have enough saved from past jobs to contribute but as a student I won't have any income for the year.

So I simple website or break down would be very helpful and greatly apreciated. Thanks
Fairmark-Roth IRA Info

EDIT: I just realized that the response I gave was from a year ago. But, I hope it helps someone anyway.

ltcm said:mcmillan2k said:There was a post on this forum not too long ago about why to avoid "Target Retirement Funds"

Whatever company you choose, the most important thing is the fund manager.

Look for a manager that's been there for a while, and more importantly look at their 10-year track record.

Avoid funds that have been "hot" over the past few years, it's well known that these funds get too much money and end up underperforming.


Just to be fair, I started that thread and that was NOT the consensus of the thread, there were many good arguments made on both sides.

I actually read through that thread and agree that it was not the consensus of the thread. What I took from it was that Target Retirement Funds are not one size fits all, and just because you are planning on retiring in 20XX doesn't mean their 20XX plan fits your investing goals and risk tolerance.