Originally posted by dgcoupe
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I don't disagree with the Vanguard rep who was suggesting that you need to consider various fund types. As I noted earlier, though, you can't do that from day one because you won't have enough money to do so. Due to the minimum deposit, you can only start with one fund. Some will argue that you should make that one fund more diversified than the stock fund I suggested. Vanguard has some balanced funds, meaning the fund has both stock and bond holdings within the same fund. They also have the Target Retirement funds https://personal.vanguard.com/us/wha...entfundchoices which are broadly diversified and automatically adjust the allocation as you get closer to your indicated retirement age. Some folks invest in a Target fund for their entire retirement portfolio - one fund and they're done. There is a lot to be said for simplicity.
Here's what I'd suggest. The sooner you start your retirement savings, the better. Open the Vanguard account. Send in your $3,000. Put it into a money market fund. Then take a few weeks or even a few months to educate yourself about asset allocation. During that time, continue to contribute to the Roth so that you get the full $5,000 in for 2010 (you actually have until April 15, 2011 to accomplish that). Once January 1 rolls around, you can then start working on your 2011 contribution. But at least you will have taken the first step to building your retirement nest egg.
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