Roth IRA -What Are Some Good Index Funds?

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LRH
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Roth IRA -What Are Some Good Index Funds?

Post by LRH »

HI -

What are some good index funds for a roth ria account? I am 42 years old and currently contributing 10% of my salary into my 401 K and I have a 403B.
Last edited by LRH on Mon May 16, 2022 11:54 am, edited 1 time in total.
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Third Son
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Re: ROTH IRA -WHAT ARE SOME GOOD INDEX FUNDS?

Post by Third Son »

FSKAX.... Done
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Re: ROTH IRA -WHAT ARE SOME GOOD INDEX FUNDS?

Post by muffins14 »

Total world market:
VT

US-market:
VTI, ITOT, SCHB

International market:
VXUS, IXUS

Amal cap value:
AVUV, AVDV, FNDA, FNDC, IJS
Crom laughs at your Four Winds
niagara_guy
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Re: ROTH IRA -WHAT ARE SOME GOOD INDEX FUNDS?

Post by niagara_guy »

FXIAX Fidelity 500 index fund
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retired@50
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Re: ROTH IRA -WHAT ARE SOME GOOD INDEX FUNDS?

Post by retired@50 »

Thank you.

Regards,
Last edited by retired@50 on Mon May 16, 2022 1:27 pm, edited 1 time in total.
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InNameOnly
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Re: ROTH IRA -WHAT ARE SOME GOOD INDEX FUNDS?

Post by InNameOnly »

Third Son wrote: Mon May 16, 2022 6:40 am FSKAX.... Done
+1
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Re: ROTH IRA -WHAT ARE SOME GOOD INDEX FUNDS?

Post by mega317 »

Impossible to answer without knowing a bigger picture of your portfolio and goals. What if OP is 18 and the only way s/he could fill the Roth space is with the emergency fund?
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LRH
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Re: ROTH IRA -WHAT ARE SOME GOOD INDEX FUNDS?

Post by LRH »

Third Son wrote: Mon May 16, 2022 6:40 am FSKAX.... Done
Thanks
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LRH
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Re: ROTH IRA -WHAT ARE SOME GOOD INDEX FUNDS?

Post by LRH »

muffins14 wrote: Mon May 16, 2022 6:44 am Total world market:
VT

US-market:
VTI, ITOT, SCHB

International market:
VXUS, IXUS

Amal cap value:
AVUV, AVDV, FNDA, FNDC, IJS
Thanks
Topic Author
LRH
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Re: ROTH IRA -WHAT ARE SOME GOOD INDEX FUNDS?

Post by LRH »

niagara_guy wrote: Mon May 16, 2022 9:05 am FXIAX Fidelity 500 index fund
Thanks!
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LRH
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Re: Roth IRA -What Are Some Good Index Funds?

Post by LRH »

Is it a good strategy to have more than 1 index fund in your roth IRA?
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Re: Roth IRA -What Are Some Good Index Funds?

Post by arcticpineapplecorp. »

LRH wrote: Mon May 16, 2022 6:16 am HI -

What are some good index funds for a roth ria account? I am 42 years old and currently contributing 10% of my salary into my 401 K and I have a 403B.
more important than just the funds is:

How much risk do you need to take: https://www.cbsnews.com/news/asset-allo ... -you-need/
How much risk do you have the ability to take: https://www.cbsnews.com/news/asset-allo ... -you-take/
How much risk do you have the willingness to take: https://www.cbsnews.com/news/asset-allo ... tolerance/
How to deal with conflicts between the need, ability and willingness to take risk: https://www.cbsnews.com/news/asset-allo ... ing-goals/

if you are only prepared to lose 15% of your money what good would it do for me to tell you to vtsax and chill if you can't chill when vtsax loses 50% as it did here (yes it's S&P500 technically, but the risk was the same):

Image

the funds are important, but the asset allocation is critical because it informs you how much risk you're taking. Got to get that right for yourself.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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GerryL
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Re: Roth IRA -What Are Some Good Index Funds?

Post by GerryL »

LRH wrote: Mon May 16, 2022 11:55 am Is it a good strategy to have more than 1 index fund in your roth IRA?
It depends.
You need an overall plan for your portfolio, not tips about which fund or funds to put into one account.

I happen to have all of my Roth in Total International Stock, but that is part of my asset allocation, which includes total stock and total bond in other accounts. FIRST figure out what aa is right for you at this time in your life, and THEN figure out how to distribute that aa among your different account types.
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retiredjg
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Re: Roth IRA -What Are Some Good Index Funds?

Post by retiredjg »

Don't pick funds for a single account. Plan a portfolio and then find the funds that fit the plan.

See the link at the bottom of this message for how to get help doing these things.
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LRH
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Re: Roth IRA -What Are Some Good Index Funds?

Post by LRH »

Is it good to create a 2 or 3 index fund portfolio??
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Re: Roth IRA -What Are Some Good Index Funds?

Post by retiredjg »

LRH wrote: Tue May 17, 2022 4:41 pm Is it good to create a 2 or 3 index fund portfolio??
A good portfolio can be created with 2 or 3 index funds if you have the right funds available. Sometimes it takes more funds that that. Sometimes it can be done with 1 fund (such as an all-in-one fund).

The important thing is to have broad coverage in US stocks, broad coverage in foreign stocks (some think this is not necessary) and a pretty good bond fund or combination of bond funds.

A good place to start planning your portfolio is seeing what you have available at low cost in a work plan (if you have one) and build the rest of the portfolio around that. This is commonly called "the 3 fund portfolio' although it sometimes takes more than 3 funds to put it together.

This might be a good place to explore. https://www.bogleheads.org/wiki/Getting_started

And here too. https://www.bogleheads.org/wiki/Three-fund_portfolio
manuvns
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Re: Roth IRA -What Are Some Good Index Funds?

Post by manuvns »

vanguard target date are good for IRA , it did large distribution last year( see related thread about a lawsuit about the distribution) but it was not an issue in IRA .
Thanks!
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Re: Roth IRA -What Are Some Good Index Funds?

Post by Vanguard User »

44 here. All in on FZROX.
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LRH
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Re: Roth IRA -What Are Some Good Index Funds?

Post by LRH »

Thanks for the help everyone.

If I decide to create a 2 index fund portfolio in my roth ira, what percentage of my money should go to my total market index fund and my international index fund?
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Re: Roth IRA -What Are Some Good Index Funds?

Post by placeholder »

It's difficult to give advice in isolation so it would be best to do a full portfolio review.
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Re: Roth IRA -What Are Some Good Index Funds?

Post by ruralavalon »

LRH wrote: Mon May 16, 2022 6:16 am HI -

What are some good index funds for a roth ria account? I am 42 years old and currently contributing 10% of my salary into my 401 K and I have a 403B.
Which fund for or brokerage is the Roth IRA with?

I often suggest a total stock market index the for a Roth IRA.

In an account at Vanguard that would be Vanguard Total Stock Market Index Fund (VTSAX), the ETF share class is VTI.

In an account at Fidelity that would be Fidelity® Total Market Index Fund (FSKAX).

In an account at Schwab that would be Schwab Total Stock Market Index Fund (SWTSX).

It matters what funds are on offer on your employer's 401k and 403b plans.

LRH wrote: Sat May 21, 2022 6:15 pm Thanks for the help everyone.

If I decide to create a 2 index fund portfolio in my roth ira, what percentage of my money should go to my total market index fund and my international index fund?
It matters what funds are on offer on your employer's 401k and 403b plans.

It's often better to coordinate investments among all accounts treating all accounts together as a single unified portfolio, rather than treating each account separately.

What is your desired overall asset allocation? What is your age? About how long until expected retirement? Do you have any debt? Do you have any dependents? How would you describe your risk tolerance?

What funds do you use in each of your employer's plans? What funds are offered in each of your employer's plans? Please give fund names, tickers and expense ratios.

Please simply add any new information to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.

Please use this format: Asking Portfolio Questions.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Re: Roth IRA -What Are Some Good Index Funds?

Post by LRH »

Emergency funds: Yes I have one

Debt: Mortgage with 3.5% interest rate

Tax Filing Status: Single

Tax Rate: 24% Federal, % State (DC) $3,500, plus 8.5% of the excess over $60,000

State of Residence: DC

Age: 42

Desired Asset allocation: 80% stocks / 0% bonds
Desired International allocation: 20% of stocks

Please provide an approximate size of your total portfolio - 200 K

Show us your current portfolio including all investment and retirement accounts (yourself and spouse or civil partner, if applicable) as it's important to look at the portfolio as a unified whole rather than look at accounts in isolation. Also include the available funds in your employer provided retirement plans.

Show each fund or holding as a percentage of the entire portfolio, not as a percentage of the account that holding is in. If this instruction is not clear, see the example under the Key Points section below. For example:

Current retirement assets
* The format below is shown using his/her pronouns. Use whatever pronouns or identifying names you prefer as long as it is clear which assets belong to which person.

Taxable
M1 Account - 2500
Individual Account at Fidelity -
4 shares of AAPL
0.0037 shares of AMZN
0.053 shares Googl
5 shares of JSTC
2 shares of MSFT
1 share of SYK
1 share of VGT
2 shares of VOO
2 shares of VTI


401k

100% fund name (FSNZX) (0.01%)
No



403b

100% fund name (FSNZX) (0.01%)
Company match? Yes 5%

SIMPLE IRA at Fidelity
50% fund name (FSKAX) (0.01%)
50% (FTIHX) (0.06%)


_______________________________________________________________

1. Just looking for some feeback. Looking to optimize my accounts. Should I make any changes to my Individual Account and Roth IRA?

2.
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Re: Roth IRA -What Are Some Good Index Funds?

Post by retiredjg »

Thank you for more information, but we con't do much with this because we don't know how much money is in which account. Since the total portfolio is about $200k, each holding should be shown as a percentage of that $200k.

We also need to know what accounts are getting new money each year and about how much.

Please include fund names so that people don't have to look all of them up.
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Re: Roth IRA -What Are Some Good Index Funds?

Post by bertilak »

You need to look at your investments across all accounts, if you have more than just that Roth. Decide on an overall AA. Consider the following:
  1. US Stocks
  2. International stocks
  3. Bonds
That defines the three-fund portfolio which you can explore at Bogleheads both in these boards and in the Wiki: Pretty much anyplace you invest will have index funds to cover each those three categories.

Another aspect to consider is asset placement. This basically boils down to "avoid putting bonds in a taxable account -- if a tax advantaged account is available to hold them."
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Re: Roth IRA -What Are Some Good Index Funds?

Post by ruralavalon »

retiredjg wrote: Sun May 22, 2022 10:05 am Thank you for more information, but we con't do much with this because we don't know how much money is in which account. Since the total portfolio is about $200k, each holding should be shown as a percentage of that $200k.

We also need to know what accounts are getting new money each year and about how much.

Please include fund names so that people don't have to look all of them up.
+ 1.

How much do you contribute annually to each account? What are the relative sizes of the accounts (in other words what percentage of the total portfolio is in each account)?

The expense ratio on Fidelity Freedom® 2045 K (FSNZX) is 0.65%, not 0.01%.
Last edited by ruralavalon on Sun May 22, 2022 11:26 am, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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LRH
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Re: Roth IRA -What Are Some Good Index Funds?

Post by LRH »

LRH wrote: Sun May 22, 2022 9:28 am Emergency funds: Yes I have one

Debt: Mortgage with 3.5% interest rate

Tax Filing Status: Single

Tax Rate: 24% Federal, % State (DC) $3,500, plus 8.5% of the excess over $60,000

State of Residence: DC

Age: 42

Desired Asset allocation: 80% stocks / 0% bonds
Desired International allocation: 20% of stocks

Please provide an approximate size of your total portfolio - 200 K

Show us your current portfolio including all investment and retirement accounts (yourself and spouse or civil partner, if applicable) as it's important to look at the portfolio as a unified whole rather than look at accounts in isolation. Also include the available funds in your employer provided retirement plans.

Show each fund or holding as a percentage of the entire portfolio, not as a percentage of the account that holding is in. If this instruction is not clear, see the example under the Key Points section below. For example:

Current retirement assets
* The format below is shown using his/her pronouns. Use whatever pronouns or identifying names you prefer as long as it is clear which assets belong to which person.

Taxable
M1 Account - 2500
Individual Account at Fidelity -
4 shares of AAPL
0.0037 shares of AMZN
0.053 shares Googl
5 shares of JSTC
2 shares of MSFT
1 share of SYK
1 share of VGT
2 shares of VOO
2 shares of VTI


401k

100% fund name (FSNZX) (0.01%)
No



403b

100% fund name (FSNZX) (0.01%)
Company match? Yes 5%

SIMPLE IRA at Fidelity
50% fund name (FSKAX) (0.01%)
50% (FTIHX) (0.06%)


_______________________________________________________________

1. Just looking for some feeback. Looking to optimize my accounts. Should I make any changes to my Individual Account and Roth IRA?

2.

retiredjg wrote: Sun May 22, 2022 10:05 am Thank you for more information, but we con't do much with this because we don't know how much money is in which account. Since the total portfolio is about $200k, each holding should be shown as a percentage of that $200k.

We also need to know what accounts are getting new money each year and about how much.

Please include fund names so that people don't have to look all of them up.


Thanks for the feedback...

401K - 47% of my portfolio

403B - 41%

Roth Ira - 7%

Individual Account - 5%

Is this more helpful or should I include my assest allocation?
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LRH
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Re: Roth IRA -What Are Some Good Index Funds?

Post by LRH »

ruralavalon wrote: Sun May 22, 2022 10:21 am
retiredjg wrote: Sun May 22, 2022 10:05 am Thank you for more information, but we con't do much with this because we don't know how much money is in which account. Since the total portfolio is about $200k, each holding should be shown as a percentage of that $200k.

We also need to know what accounts are getting new money each year and about how much.

Please include fund names so that people don't have to look all of them up.
+ 1.

How much do you contribute annually to each account? What are the relative sizes of the accounts (in other words what percentage of the total portfolio is in each account)?
Right now I am contributing 8% of my salary into my 401K

Roth IRA - 5% of my salary

Individual Account - 2%

M1 Account - 2%

Thanks for any feedback..
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Re: Roth IRA -What Are Some Good Index Funds?

Post by ruralavalon »

LRH wrote: Sun May 22, 2022 11:24 am
ruralavalon wrote: Sun May 22, 2022 10:21 am
retiredjg wrote: Sun May 22, 2022 10:05 am Thank you for more information, but we con't do much with this because we don't know how much money is in which account. Since the total portfolio is about $200k, each holding should be shown as a percentage of that $200k.

We also need to know what accounts are getting new money each year and about how much.

Please include fund names so that people don't have to look all of them up.
+ 1.

How much do you contribute annually to each account? What are the relative sizes of the accounts (in other words what percentage of the total portfolio is in each account)?
Right now I am contributing 8% of my salary into my 401K

Roth IRA - 5% of my salary

Individual Account - 2%

M1 Account - 2%

Thanks for any feedback..
What are the contributions to each account in dollars.

Among other things we are trying to determine if you are making the maximum annual contributions, and whether money put in one account might be better put in another account.

Please list the funds offered in your 401k and 403b plans. Please give fund names, tickers and expense ratios.

Are all Fidelity funds available in the SIMPLE IRA at Fidelity?

The expense ratio on Fidelity Freedom® 2045 K (FSNZX) is 0.65%, not 0.01%, unless there is some special rate available in your employer's plans.
Last edited by ruralavalon on Sun May 22, 2022 11:45 am, edited 4 times in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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ruralavalon
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Re: Roth IRA -What Are Some Good Index Funds?

Post by ruralavalon »

You can simply use the edit button (the pencil icon near the upper right corner of your post) to add new information to your original post. It helps at lot if all of your information is in one place.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Re: Roth IRA -What Are Some Good Index Funds?

Post by retired@50 »

LRH wrote: Sun May 22, 2022 9:28 am 401k
100% fund name (FSNZX) (0.01%)

403b
100% fund name (FSNZX) (0.01%)
Company match? Yes 5%
Are you certain about the expense ratio for the FSNZX fund?

From what I can tell on Yahoo! Finance, it's showing up as Fidelity Freedom 2045 Fund Class K with an expense ratio of 0.65%.

Source: https://finance.yahoo.com/quote/FSNZX?p ... c=fin-srch

If the 0.01% expense ratio is accurate, that's a pretty good deal.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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LRH
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Re: Roth IRA -What Are Some Good Index Funds?

Post by LRH »

ruralavalon wrote: Sun May 22, 2022 11:29 am
LRH wrote: Sun May 22, 2022 11:24 am
ruralavalon wrote: Sun May 22, 2022 10:21 am
retiredjg wrote: Sun May 22, 2022 10:05 am Thank you for more information, but we con't do much with this because we don't know how much money is in which account. Since the total portfolio is about $200k, each holding should be shown as a percentage of that $200k.

We also need to know what accounts are getting new money each year and about how much.

Please include fund names so that people don't have to look all of them up.
+ 1.

How much do you contribute annually to each account? What are the relative sizes of the accounts (in other words what percentage of the total portfolio is in each account)?
Right now I am contributing 8% of my salary into my 401K

Roth IRA - 5% of my salary

Individual Account - 2%

M1 Account - 2%

Thanks for any feedback..
What are the contributions to each account in dollars.

Among other things we are trying to determine if you are making the maximum annual contributions, and whether money put in one account might be better put in another account.

Please list the funds offered in your 401k and 403b plans. Please give fund names, tickers and expense ratios.

Are all Fidelity funds available in the SIMPLE IRA at Fidelity?

The expense ratio on Fidelity Freedom® 2045 K (FSNZX) is 0.65%, not 0.01%, unless there is some special rate available in your employer's plans.
401K FSNZX - $500 a month. Expense ratio -0.64%

403B - FSNZ - $700. Expense ratio - 0.64% (Employee makes contributions)
Topic Author
LRH
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Re: Roth IRA -What Are Some Good Index Funds?

Post by LRH »

retired@50 wrote: Sun May 22, 2022 12:05 pm
LRH wrote: Sun May 22, 2022 9:28 am 401k
100% fund name (FSNZX) (0.01%)

403b
100% fund name (FSNZX) (0.01%)
Company match? Yes 5%
Are you certain about the expense ratio for the FSNZX fund?

From what I can tell on Yahoo! Finance, it's showing up as Fidelity Freedom 2045 Fund Class K with an expense ratio of 0.65%.

Source: https://finance.yahoo.com/quote/FSNZX?p ... c=fin-srch

If the 0.01% expense ratio is accurate, that's a pretty good deal.

Regards,
My mistake. Sorry about that.
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LRH
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Re: Roth IRA -What Are Some Good Index Funds?

Post by LRH »

To keep things simple, I have 2 index fund in my Roth IRA. If I can contribute $400 a month, what percentage should go to each index fund? 80/20 split?

FSKAX - FIDELITY TOTAL MARKET INDEX FUND

FTIHX -FIDELITY TOTAL INTL INDEX FUND

Thanks
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Re: Roth IRA -What Are Some Good Index Funds?

Post by ruralavalon »

LRH wrote: Sun May 22, 2022 9:28 amTaxable
M1 Account - 2500
Individual Account at Fidelity -
4 shares of AAPL
0.0037 shares of AMZN
0.053 shares Googl
5 shares of JSTC
2 shares of MSFT
1 share of SYK
1 share of VGT
2 shares of VOO
2 shares of VTI


401k
100% fund name (FSNZX) (0.01%)
No



403b
100% fund name (FSNZX) (0.01%)
Company match? Yes 5%

SIMPLE IRA at Fidelity
50% fund name (FSKAX) (0.01%)
50% (FTIHX) (0.06%)
LRH wrote: Sun May 22, 2022 11:22 amThanks for the feedback...

401K - 47% of my portfolio

403B - 41%

Roth Ira - 7%

Individual Account - 5%

Is this more helpful or should I include my assest allocation?
LRH wrote: Sun May 22, 2022 12:06 pm401K FSNZX - $500 a month. Expense ratio -0.64%

403B - FSNZ - $700. Expense ratio - 0.64% (Employee makes contributions)
LRH wrote: Fri May 27, 2022 9:22 am To keep things simple, I have 2 index fund in my Roth IRA. If I can contribute $400 a month, what percentage should go to each index fund? 80/20 split?

FSKAX - FIDELITY TOTAL MARKET INDEX FUND

FTIHX -FIDELITY TOTAL INTL INDEX FUND

Thanks
It's usually better to coordinate investments among all accounts treating all accounts together as a single unified portfolio, rather than treating each account separately.

Because you use Fidelity Freedom® 2045 K (FSNZX) ER 0.65% in your 401k and 403b accounts, in your Roth IRA I suggest Fidelity Freedom® Index 2045 Fund Investor Class (FIOFX) ER 0.12%.

Using an allocation fund seems to inoculate the investor against behavioral errors, and so prices higher investor returns. Morningstar, "Mind the Gap 2019", link.

it looks like you contribute $14,400 ($1200 x 12) to your employer's plans. The maximum annual employee contribution is $20.5k. The employer match does not count toward the employee maximum, it's extra.

I suggest that you make the maximum annual contribution ($6k) to your Roth IRA.

In general it's better to make maximum annual contributions to all available tax-advantaged accounts as a priority ahead of contributions to a taxable brokerage account. So I suggest stopping contributions to the two taxable brokerage accounts (at M1 and Fidelity), and increasing contributions to your employer's plans.

Wiki article, Prioritizing investments.

How much do you contribute annually to the "SIMPLE IRA at Fidelity" which you mentioned earlier? Are all Fidelity funds available to use in that account?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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