Etrade Question

[Vpxggmr17]

So I recently opened a Etrade Roth IRA (I'm 24) and have been contributing about $200-300 a month with the inclusion of a $1000 initial deposit.

What I wanted to know was in my Roth 401k through my work, my investments are pulled from my paycheck and automatically invested into the allocation I have created.

I would like to set up the same system with my Roth IRA but I have no idea how to do this. I have figured out about 16 different Mutual funds and ETFs I want to invest in long term and it would be nice to contribute the maximum amount per month and have it automatically purchase set mutual funds each month without having to manually calculate everything.

Anyone have any insight on this or is the manual approach the only way to go?

Thanks!

[bjl584]

I contribute automatically every month to my brokerage account and to my Roth IRA (which is set up at the same brokerage firm.) I simply had to fill out a few forms and give them my account numbers and routing numbers for my bank, the amount that I wished to transfer, and the day of the month that I wanted the transaction to occur. I would assume that E trade has a similar service.

[jpg7n16]

I would assume that E trade has a similar service.

Billy Madison "That is correct" - YouTube

https://us.etrade.com/e/t/invest/aihome

[disneysteve]

I have figured out about 16 different Mutual funds and ETFs I want to invest in

WHY? 16 funds and ETFs is a lot. And that's on top of whatever investments you hold in your 401k. I'd suggest simplifying that plan and narrowing it down to maybe 5 or 6 funds. You should be able to cover most asset classes that way.

[Vpxggmr17]

WHY? 16 funds and ETFs is a lot. And that's on top of whatever investments you hold in your 401k. I'd suggest simplifying that plan and narrowing it down to maybe 5 or 6 funds. You should be able to cover most asset classes that way.

Well 16 is more of what I am looking at originally and then I will narrow that down. I will obviously need to strike balance. My Roth 401k is allocated to 6 different funds and the free stock I get from my company.

I can post the ones I'm looking at if someone would like to give feedback on any I'm looking at?

[violet80907]

https://us.etrade.com/e/t/invest/aihome

Except that the poster said he had ETFs in which he wanted to invest. This program is only for their no-load, no transaction fee mutual funds. From the link you provided from Etrade:

Our free Automatic Investment Plan lets you transfer a fixed amount of money at set intervals into any of the 1000 no-load, no-transaction-fee mutual funds offered through E*TRADE

[snafu]

Wow! 16 MFs are a lot to monitor, and track holding to avoid repetition. What are the MERs? Would you be willing to list the funds you are considering within the parameters of E trade offerings?

[Bades]

I contribute automatically every month to my brokerage account and to my Roth IRA (which is set up at the same brokerage firm.) I simply had to fill out a few forms and give them my account numbers and routing numbers for my bank, the amount that I wished to transfer, and the day of the month that I wanted the transaction to occur. I would assume that E trade has a similar service.

I would watch out contributing monthly - or at least making transactions monthly. A lot of investments have a transaction fee. So if you're contributing every month and also making a purchase with that money, you could be incurring transaction fees monthly. Usually they are nothing big, but $7-10 a month for years can add up.

I personally add to my Roth at the beginning of each year (usually my bonus for the previous year)

Does this make sense?

[BuckyBadger]

You need no more than three funds -- total US stock, total International stock, and total bond -- to be set for the rest of your life.

Please google "three fund lazy portfolio," click on the first link, and read all about it. You might be surprised about how easy this can be (unless you choose to make it difficult).

Also -- you didn't really give us any additional information about tax brackets or other investments, so I'm wondering the reason for using a Roth 401k rather than a traditional pre-tax 401k. If you are also contributing to a Roth IRA you will be able to have both pre tax and post tax tax advantaged accounts. Right now it's all after-tax, which is more "expensive" to invest. If you have both pre tax and post tax accounts you are getting a tax break as well as hedging your bets about what tax rates might be like in the future.

Good luck investing!!

[Vpxggmr17]

[QUOTE=BuckyBadger;344960]
Also -- you didn't really give us any additional information about tax brackets or other investments, so I'm wondering the reason for using a Roth 401k rather than a traditional pre-tax 401k. If you are also contributing to a Roth IRA you will be able to have both pre tax and post tax tax advantaged accounts. Right now it's all after-tax, which is more "expensive" to invest. If you have both pre tax and post tax accounts you are getting a tax break as well as hedging your bets about what tax rates might be like in the future.
QUOTE]

I posed that question/discussion in another forum a ways back. As I'm 24 years old, I anticipate having a much higher tax rate upon the time I start withdrawing this money so I chose to go with the Roth Accounts (also, because I can afford to do so now versus what may pop up later)

16 Funds may have been an exageration heh, but I do have a lot that I had been "scouting":

My Roth IRA currently holds SDIV and TUR and my watchlist is as follows:

PRGFX
EGPT
VNM
IBB
IEMG
USO
ACRNX
SCEMX
HAHHX
ICHCX
LEXCX
PRMSX
TGIGX
STCSX

Obviously I wouldn't purchse stake in all of these. And to address a previous poster, I do focus on No Load/No Transaction Fee Funds/ETFs. I recognize that TUR doesn't fit that mold nor do a few others on my watchlist, but those I would probably do a bulk purchase annually versus monthly.

Lastly, my 401k funds are as follows (always open to feedback):
BGRIX
DODFX
FDGRX
CRARX
PTTRX
OAKMX
And the stocks that my company contributes as a match (I don't invest in any company stock)

[BuckyBadger]

Just remember that if you play your cards right, you may be able to have an extremely low tax rate when you retire. You can have a great deal of wealth but not a lot of income and easily be in the lowest income bracket.

I'd still want to hedge my bets a bit.

As far as all those funds, what is it you hope to accomplish? What is your desired asset allocation? What is your risk tolerance? No one can recommend specific funds if we don't know what your goal is.

Did you read anything about the lazy three fund portfolio? What issues do you have with it? Why are you not interested in it?

[BuckyBadger]

Also, can you list the names of those funds and the expense ratios, as well as what else is available in your 401k? I started looking them up but I (quite frankly) don't feel like looking them all up!

[Vpxggmr17]

but the key issue before you select the funds is what you are trying to do with your overall portfolio. that could narrow things down quite a bit. anyway, you were asking about the fund selection process and this is how you go about it.

Your post was immensely insightful. Thank you.

I guess my struggles sometimes factor in the realization that there is so much out there it's a tad overwhelming.

[stockmarketmate]

you definitely want to minimize your transaction fees...make perfect sense

You might be able to negotiate commission fees with Etrade. As the business has become more competitive brokers are open to discussion about the fees they charge.