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Starting up the ROTH, again.

June 29th, 2009 at 12:43 pm



When I got laid off last October, the economy was bombing and I stopped my ROTH contributions. I've been gainfully employed for 5 months now and I'm a little embarrassed to say I haven't picked them up. My thinking was that with the market the way it was it made more sense to invest in things that will have more tangible return on investment, like topping off our emergency fund and making some good headway on our goals savings account, and completing our badly needed master bath remodel.

While I am still very reluctant to do so, I do have faith that the economy will start to come back up in the next few years, and obviously missing out on the growth would be missing out on the whole point of investing. We're mostly a target date fund kinda family when it comes to retirement investments so I am going to re-start contributing to the Vanguard 2040 once again and try not to obsessively watch it month to month like I tend to do.

Even Dave Ramsey is Wrong Sometimes

October 30th, 2008 at 10:27 am



I was half-listening to Dave Ramsey's podcast on ITunes yesterday while getting some work done. My ears perked up when a caller asked whether he should roll-over his TSP into an IRA at Vanguard after separating from Federal Service.

This is my exact situation, and my TSP is the only account I haven't consolidated into my Vanguard Target Retirement Fund.
Dave told the guy to roll it over, since you have more choices at Vanguard, and the choices in the TSP are very limited. I went and did a little research on my own.

Here is a breakdown of TSP(Barclays) vs Vanguard fund fees:

0.15% G Fund -
0.15% F Fund - 0.20 (VBMFX) Total Bond Market Index
0.15% C Fund - 0.15% (VFINX) S&P 500 Index
0.15% S Fund - 0.24% (VEXMX) Extended Market Index
0.15% I Fund - 0.22% (VDMIX) Developed Markets Index
0.15% L2040 - 0.19% (VTIVX) Target retirement 2045

Barclays gets a subsidy for managing the TSP, hence the really low fees. Considering the near identical 5/10 year returns I don't really see the point of switching unless you're 100% in the C fund.

Am I missing something here?

Where should I roll over my 401K?

October 17th, 2008 at 12:09 pm



I've got a question for all you readers out there, I could really use your advice...

I've just received my rollover forms from Principal Investors, the company that handled 401k for my previous employer. What I've done in the past with all my errand, abandoned 401k accounts was rollover and consolidate them all into one Vanguard IRA. The amounts were pretty small and having them all under one roof with a lot more funds to choose from were huge benefits.

At Vanguard everything is invested in the TargetRetirementFund2045 (VTIVX). That fund is 90% stocks and 10% bonds and has fallen -33.00 this year, and -4.10 the past three years. My rational mind tells me to buy low and sell high, and that it has time to rebound since I won't need that money for a long time, but I'm still scared. Should I be buying bonds, treasuries or commodities instead of this fund? Should I leave it at Principal in case one of these guys folds, even though their choices are meager and the performance just as bad?

I'd like to know what you would do if faced with the same situation... (as long as it doesn't involve cashing it out and stashing it in my mattress)