Target Date fund Questions

**deca** · 11-09-2007, 02:17 AM

I have a traditional IRA account at Vanguard in a target date fund. There was an initial deposit requirement of $3,000; however I was rolling over an account from a former employer that only had about 2600 and it turned out to not be an issue. I thought they were going to want me to top up within a certain time period but it's been several months. Anyway I think I can set up a monthly contribution, I just haven't done so yet.

As for a max amount, that would depend on your tax situation. You didn't say whether this is to be a taxable or retirement account. So it kind of depends.

**deca** · 11-09-2007, 02:28 AM

Okay, since I was thinking about it I just popped over to the Vanguard site and set up a monthly contribution from my checking account. It was totally easy and took about 5 minutes. You can choose the amount to contribute monthly with a minimum of just $50.

**jIM_Ohio** · 11-09-2007, 06:26 AM

T Rowe Price $0 minimums if you set up asset builder at $50/month.

**boefixepa** · 11-09-2007, 09:38 AM

I have a vanguard account...traditonal IRA. It was painless to set up on line. THere is the 3K min, yes to monthly automatic withdrawls from checking, and it will tell you on the site the year to date amount you can contribute and how much is left....I've had no problems with mine.

**Aleta** · 11-09-2007, 09:46 AM

I have a Vanguard Target account also. I can't add much to what most have said here except to say that I have been sleeping alot better at night since I did this and especially lately. In the beginning I was pretty aggressive with the account putting my target date some years ahead, but I started realizing that it was foolish to be 89% in stocks and less in bonds. Lately, I have seen what happened to that account and I'm glad that I made the decision when I did.

Also, most people aren't aware that you can also have a target account even if it's not for a traditional ira, or whatever. Some people like the simplicity of this type of account and will have both, one that is taxable and one that isn't taxable.

**hawkster** · 11-09-2007, 07:32 PM

Thanks for the replies

I'm thinking it will be a taxable account. My gross annual will be roughly $115,000 for 2007 so I suspect I am over the limit and that I will not get any tax advantage right away.

In that case I'm assuming because its not a tax deduction for me there will be no limit / max to what I can put into it. Correct?

That said, we'll be setting up an account for my wife as well and that will be a tax advantage as she is not currently working.

**Fern** · 11-10-2007, 01:37 PM

I will have about $20K to invest once the 401k from my curent employer is rolled over to an IRA when i leave the company soon. I am looking forward to gradually moving this money into a TRP target retirement fund as i already have too many funds already and this wil be instant diversification.

**kv968** · 11-10-2007, 02:52 PM

Originally posted by hawkster View Post

Thanks for the replies

I'm thinking it will be a taxable account. My gross annual will be roughly $115,000 for 2007 so I suspect I am over the limit and that I will not get any tax advantage right away.

In that case I'm assuming because its not a tax deduction for me there will be no limit / max to what I can put into it. Correct?

That said, we'll be setting up an account for my wife as well and that will be a tax advantage as she is not currently working.

If you aren't covered by a retirement plan at work, you can take the full deduction no matter what your salary. If you are offered a retirement plan at work you won't get the deduction but you could still open a Roth IRA if you file jointly and your AGI is under $156k.

**hawkster** · 11-10-2007, 04:07 PM

Originally posted by kv968 View Post

If you aren't covered by a retirement plan at work, you can take the full deduction no matter what your salary. If you are offered a retirement plan at work you won't get the deduction but you could still open a Roth IRA if you file jointly and your AGI is under $156k.

I have a pension plan at work that is fully funded as well as a 401K account that the company contributes to as well.

**kv968** · 11-10-2007, 05:04 PM

Originally posted by hawkster View Post

I have a pension plan at work that is fully funded as well as a 401K account that the company contributes to as well.

I would say open a Roth then and if there's anything left over once you reach the $4000 max this year and $5000 max next year, then do a taxable account. That is assuming that this money is earmarked for retirement. Is it?

**hawkster** · 11-11-2007, 12:08 AM

Originally posted by kv968 View Post

I would say open a Roth then and if there's anything left over once you reach the $4000 max this year and $5000 max next year, then do a taxable account. That is assuming that this money is earmarked for retirement. Is it?

It is for retirement; I'm aggressively saving so I can retire some where around 55 years old (15 more years)

Target Date fund Questions