| 28y & just discovering my financial profile |
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mattryan86
New Poster
Cash: $ 0.45
Posts: 2
Joined: 29 Jan 2015
Location: United States
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| 28y & just discovering my financial profile |
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Hi there. I'm 28 years old, debt free, renting, living very conservatively, making $40K a year, expecting a raise in the near future at the company I've worked at for 5+ years. I've began to think about buying a house in 6+ years and thinking about retirement when the time comes. So far I've got 40K cash saved up in a CD account making 1.3% interest off it. I'm just now realizing that investing in index stocks have FAR BETTER interest rates than my CD account and should most likely benefit me in saving towards a down payment on a house in the not so distance future.
Furthermore, I've come to realize how disappointing my Roth IRA looks compared to other options I've found at brokers like Vanguard. I currently have:
The Growth Fund of America (AGTHX) = $1,031.04
The Investment Company of America (AIVSX) = $4,340.39
New Perspective Fund (ANWPX) = $938.08
That come with so many fees.....Annual Management Fees 0.24%, Other Expenses 0.14%, and Service 12b-1 0.23% That's a total of 0.66%!!! :'(
I also have a SEP-IRA that seems to get me nothing in interest...
SPAXX = $10,129
Any advice on how I can fix my current financial profile is greatly appreciated!!!
Matt Ryan
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Thu Jan 29, 2015 3:20 am |
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oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
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quote:
how disappointing my Roth IRA looks compared to other options I've found at brokers like Vanguard.
Yes - I would open a Roth at Vanguard and move all of those into their SP500 Index Fund.
And personally, I would move at least 3/4 of that CD into a taxable account, SP500 Index at Vanguard, it grows tax-deferred, accessible in a day.
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Thu Jan 29, 2015 4:53 am |
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mattryan86
New Poster
Cash: $ 0.45
Posts: 2
Joined: 29 Jan 2015
Location: United States
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Why the SP500 Index Fund instead of a TDF?
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Thu Jan 29, 2015 5:16 am |
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oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
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More info pls - TDF?
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Thu Jan 29, 2015 3:44 pm |
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MrNewEngland
Full Member
Cash: $ 20.85
Posts: 98
Joined: 04 Nov 2009
Location: The QC
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quote:
Originally posted by oldguy
I would move at least 3/4 of that CD into a taxable account, SP500 Index at Vanguard, it grows tax-deferred.
Is this right?
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Thu Jan 29, 2015 6:57 pm |
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oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
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Mostly right -
The growth part of stock is tax-deferred -you pay the reduced capital gains tax on your profit if you sell - if you let it ride, the tax isn't due.
The SP500 Index has a longterm average return of about 11%/yr - about 9% is growth (deferred) and about 2% is a dividend, that part is taxed yearly.
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Thu Jan 29, 2015 8:16 pm |
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