Sorting out retirement savings: Vanguard love and funds
May 30, 2013
I love Vanguard. I love their service, the easy user interface, the fact I’ve never had to talk to anyone just to get simple things done. Most of all: I love their low expense ratios and the option to buy Admiral Shares to lower the expense ratios even more.
My accounts have mostly been lying fallow for the past few years as my employer sponsored plans were with another, much more expensive, company. It was, for a saving junkie, a pretty depressing sight: fund changes fully dependent on the whim of the market and not on my active saving. And my savings rate was dismal: I only put away enough to maximize the match because my cash flow needs were awkwardly high.
Three years down the road, my contributions, match and any gains totaled about $19k in the new account.
Time to clean house
1. We finally processed the rollover IRA paperwork, months after I should have done it. Stupidly, I couldn’t just take care of it myself, my former employer had to be involved. But: done.
2. Three years ago, my very first sub-$3000 401(k) had no place to go with Vanguard’s $3000 minimum to open any normal account. My only choice was a STAR fund. It had a whopping 0.34% expense ratio but that was still better than those other firms that charge nearly 1%. Into the STAR fund it went.
3. The new Rollover IRA money went into the STAR funds account and the whole shebang was used to buy up new Admiral Shares.
I now have $74k split into three accounts across a variety of funds:
- 70%: split between a large blend (large cap and a blend of growth & value) and foreign large blend index funds.
- 20%: split between an emerging markets index fund, a mid-cap growth fund, a small cap investor fund, and a total stock market index investor fund.
- 10%: in treasury bonds. (Roth)
It’s no $100K saved by age 30, despite putting something away every year since I was 21, so I’ve got some catching up to do. Also, my current employer doesn’t yet offer a retirement savings plan so it’s time to research ways to put away money on my own.
On the plus side, we arranged for PiC to max out his plan this year to make up for my lack of a plan so that’s great.
How’s your saving for retirement or just plain savings going?