Money Matters
cbee817
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Vanguard STAR for Roth IRA? Or recommendations
After meeting with a CPA/CFP this weekend, DH and I are going to set up Roth IRA accounts before April for 2013. Does anyone use the Vanguard STAR Fund (VGSTX) at all? Seems like there are $0 fees if you sign up online with electronic statements.. just didn't know if it was too good to be true!
Any other recommendations on who to choose/what funds for a Roth IRA? Thanks!
Re: Vanguard STAR for Roth IRA? Or recommendations
In comparison to the STAR fund, it is just a more high-risk allocation of assets. I think that the STAR fund is really good, but for me I think it's better to buy more stocks due to my age. Not sure what your age is?
I'm 32 and DH is 31. The biggest reason I was looking into the Vanguard STAR fund is that I didn't realize you could take out the $ you put in (not earnings) without a penalty before 59.5. I've felt a little uncomfortable with 529 plans for my girls' college education simply because I don't know what they'll end up wanting to do or what type of scholarships they'll receive. But if we can pull money from our Roth IRAs to pay for college, that would be awesome. I currently contribute 9% with 1.5% match from my employer to my 401K and DH is a public school teacher so he'll get a state pension and he contributes 4% to a 403b. Once the girls are out of day care (currently eats up $1,700/month), we'll have some more flexibility to add to our 401K/403b so I kind of felt like these Roth IRAs would be great for their college and then eventually will add to our retirement.
I may get some comments back on this, but not helping with their college is not an option for us. I got a partial scholarship and my mom covered the rest for undergrad, my work paid for grad school, so I had $0 in loans. That helped me buy a condo at 22, get married at 24, sell a condo and buy a home at 26, and have my 2 girls by 30. DH had $37,000 in loans (his parents didn't help at all) that we paid off in January 2013 and even though that isn't a ton, it was still a burden for us. I don't want my girls to have that and I want them to be able to start out with the same opportunity that I had.
You could still invest in the fund that interests you, just in a 529 instead of a Roth IRA.
I see where the concern is. The CPA/CFP we met with actually recommended this because 529 plans are more restrictive. He provided us with a distribution of income based on our current retirement savings projected and DH's pension and we're actually in good shape through 2076 without a Roth IRA at all. We're meeting with him again tomorrow to open up our Roth IRAs anyway. Once day care is done, we'll see what we want to do to continue to save for the girls' college- get the real specifics of the 529 plans instead of just the overview on our state's website.