Although I blog about everything money, I want to make perfectly clear that the amount of entries I devote to a particular topic does not directly correlate with its importance. For example, out of 20 posts I may talk about easy ways to make $100 or the latest savings account rates for 15 of them. Maybe only 1 or 2 talk about saving for retirement. Why? Because saving for retirement is dead simple for me:
1) I save money regularly, and put it in tax-deferred accounts.
2) I buy an auto-pilot retirement fund – Vanguard’s VTIVX.
It takes hardly any time at all, but that is the most important thing I am doing for my future. The rest is just gravy. Obviously, I love gravy! 😉
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I learned about your blog in Business Week. I think your posts and info are great and very valuable. Keep up the good work. I look forward to reading your blog.
From where can i buy / contibute to – Vanguard’s VTIVX retirement fund
You can set up an account directly at Vanguard.com, or buy their funds at another broker like Scottrade or Ameritrade. However, if you use another broker you will most likely have to pay a transaction fee every time you buy, which would really hinder dollar-cost-averaging. Firstrade.com is one where there is no fee, but a minimum holding period instead.
I hadn’t heard of the retirement 2045 fund (mirrors the College 529 accounts, which I like a lot) and it seems very interesting. I spend a lot of time playing around with my allocation to try to get it to match what I am “supposed” to be doing, so this might help. I have two questions for readers:
1) VTIVX seems to have things allocated, but they are all large cap indices. What about small/mid cap?
2) What is the “right” allocation for people in their 30’s? I’ve had a hard time finding a good answer online.
1) VTIVX includes the Vanguard Total Stock Market Index, which is a the market-weighted index of the entire US stock market. Of course, this is weighted towards large-caps by definition, but it does include the markets weight of small and mid-caps.
2) Hard question, maybe others will have opinions. But it depends on things like risk tolerance and time to retirement, I’d try some of the books mentioned in Book Reviews category on the right, or in the post after this =)
That sounds pretty good. But I’m wondering if you ever invest outside of your autopilot program? It would seem to me you would miss a lot of opportunity if that’s all you put your money into. Just curious.
To clarfify further, the Vanguard Total Stock Market Index (VTSMX) has about 65 percent invested in large-cap companies, 25 percent in mid-cap companies and 9 percent in small-cap companies. Again, this is based on the makeup of the overall US Market.
Tim – In the next few weeks, I will be rebuilding my entire portfolio from seperate mutual funds. I do have some individual stock holdings that I plan on liquidating, they total about $5,500.
Geoff,
I’m 32. I currently have a Roth IRA invested in the Vanguard 2035 Retirement fund. The symbol is VTTHX.
As far as asset allocation I currently have my 401K set up to be 85% stock funds, 15% bond funds as I can still afford to be a bit risky at this point in the game.