Can I manage all funds in Vanguard?
I'm new to this. Want to invest a portion of my saving in a low cost index fund like VTSAX. I also want to maintain my emergency fund in Vanguard too. What type of Vanguard account should I open? General investing? Traditional or Roth IRA? It's good to be able to cash it out if needed for downpayment or anything else. What fund should I usef or emergency fund that is extremely low risk? Or is it a better idea just to keep it in a bank account as cash? Thanks.
Open a Roth IRA. You can withdraw principal amount for a fee that’s $50-100, just can’t touch gains. Can also withdraw 10k for first house. I think there may be a 5 year rule of some sort though
Roth vs traditional IRA is basically trying to guess what your taxes will be like in retirement. Most people are wrong about this. If you’re high income and live in California, your taxes will likely not be higher in retirement. Best option, keep 50% of your money in post tax retirement vehicles (traditional), and 50% in pre tax retirement (Roth). Once you max your IRA, 401k, and HSA then move to just a straight up brokerage account.
This guy has the right idea. I would invest in your 401k up to the maxing limit, so if your company matches you up to 5% of your income or some dollar limit then invest up to that limit because you are getting free money from your company with that match. Then if you have more to invest, switch to putting it into your Roth IRA as you will typically have access to a broader selection of funds or ETFs and at lower fees. If you max out your Roth IRA, then switch back to putting money into your 401k as that’s your only option left until you hit the 401k limit. It’s a bit of back and forth but it’s probably the most advantaged way to do it. And if you are young, put 1-2% of your savings into Bitcoin. High risk gamble sure but if it folds over then you barely lost anything. If it works out it could end up being a small fortune.
There are advantages to straight up brokerage, you can use the money before you retire. What it really comes down to effective financial goal setting. Determine for what and when you want to use your money then execute on that.
I keep my emergency fund in Ally’s high interest savings account - it’s at ~1.8% interest right now. There may be others with a better rate, but over the years I’ve been really happy with them.
Is keeping in Ally’s secure? 1.85 sounds good.
Yes, FDIC up to $250,000
You can certainly do that but I don't recommend it. I would open a money market account with whoever you have your checking account with so you can easily transfer funds in those times of emergency. Vanguard isn't FDIC insured either, so it's best to keep emergency money with your bank.