Question about a Roth IRA and Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)?

Question

If I open an Roth IRA can I have Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) within the Roth IRA? I know that I am limited as to how much I can contribute each year. Wouldn't I be better of just investing in VTSAX as an index fund by itself, therefore I could contribute as much as I wanted. Can I have the Roth containing the VTSAX fund and have another account where I invest in the VTSAX additionally with no limit?

Answer 1

looking at the fees and minimums, I'm not sure that you can buy into this fund for an initial start up of a Roth IRA, it look like it is held for people with 100,000 dollar portfolios, but i would give Vanguard a call and check it out.

after you do pick your funds, you should do the Roth IRA and max it out then start putting money into the other investments. the money will grow in the Roth for retirement and grow tax free, while if you has put that money into a regular investment account you would have to pay tax on it when it comes out. Max out the Roth. Good Luck!!

Answer 2

I don't think you'll be eligible for the Admiral shares version -- that is for larger investments than your initial Roth IRA will be.  However, the fund is available as Vanguard Total Stock Mkt Idx (VTSMX) which is the same thing with a bit higher fee.  (The Admiral shares are essentially a discount for big investments, but all forms of this fund have extremely low fees.)

It's an excellent choice as an all-encompassing stock index fund.  The equivalent ETF is VTI from Vanguard.

The tax advantages of tax-deferred accounts are large enough that you should take advantage of them (either IRA or Roth IRA, leaning heavily to the Roth IRA if you are young or early-middle-aged).

So open your Roth IRA by either (a) opening it directly at Vanguard and buying VTSMX or (b) opening it at any discount brokerage and buying VTI.

Then if you have additional funds to invest, open a non-tax-deferred regular account and buy more.  At some point it will make sense for you to diversify further into bonds or other non-stock investments, but as a one-shot diversified stock fund, your choice is a good one.