I should preface this by saying my knowledge of anything financial is extremely limited. I’ve tried educating myself and I’m looking up definitions and then the words in the definitions.
I still don’t really understand what expense ratio is, the timing of when to buy shares, whether market or limited is better and why some funds are better than others.
I opened a Fidelity Roth IRA in 2016. I’ve fully funded it each year but didn’t realize I had to invest with each deposit. I thought whatever I deposited would go in what I initially invested in. I didn’t understand buying shares at all.
So now I’m 44 and I’ve lost so much time. I have about 8k in Vanguard Target Retirement 2050 and 53k just sitting. Thankfully I also opened a 403(b) a few years ago that’s been doing ok.
I did some reading and thought VOO was where I should put the 53k. But then I did more reading and it sounds like maybe VFIFX (where my 8k is) or FXAIX is better?
Like everyone else, I want to gain the most money as possible (especially since I’m paying a dummy tax for messing up 9 years of my life) but also should probably choose something I don’t have to watch/play around with.
I realize this is an incredibly basic question but I hope it’s not too basic of a question to post because I really need help!
I messed up my Roth IRA and now I’m very behind. Where to invest the money?
byu/betterlucknexttime81 inpersonalfinance
Posted by betterlucknexttime81
5 Comments
Dude don’t beat yourself up too much, at least you were saving the money instead of blowing it on random stuff
For the 53k just dump it all into FXAIX or keep it simple and match what you already have with VFIFX. Target date funds are literally designed for people who don’t want to think about it – they automatically adjust as you get older so you can just set it and forget it
You’ve still got 20+ years to let compound interest do its thing, that’s not nothing
VT, total world, chill https://www.bogleheads.org/forum/viewtopic.php?t=414923
All three should be very similar. For an example look at the total returns in this historical post, https://www.reddit.com/r/Bogleheads/comments/103g8vj/comparing_vfiax_voo_and_fxaix/. You can’t go wrong with either of the 3. Also you are doing fine! 60k in retirement is not bad for 44 (you are right around the median of Americans). https://www.federalreserve.gov/econres/scf/dataviz/scf/table/#series:Retirement_Accounts;demographic:agecl;population:all;units:median
This pains me. I can’t believe you have made it to 44 without figuring this out: stop assuming and start asking questions.
You assumed contributions got invested. You should have checked to be sure your assumption was correct. Calling the broker and making your intentions clear would’ve resolved this in minutes.
For your sake in the future, please never assume again and don’t stop asking questions until you are sure.
FXIAX and FSKAX are good for someone that has a fidelity account. VOO and VT for someone that has a Vangaurd account. Both are similar ETFs just with different brokerage firms