[Chris]

Maxed out in my Roth VTSAX. Looking to invest in something else. I’m now considering opening a traditional IRA and leaning towards investing in VFIAX.

I’m aware both are solid index funds but want to diversify and make the most out of tax advantages.

Given my current portfolio allocation and goals, I’m curious about the community’s perspective on holding VFIAX in a traditional IRA.

Does this approach provide sufficient diversification or is there too much overlap between VTSAX and VFIAX?

Are there alternative funds or strategies you recommend for balancing growth and tax efficiency?

Any insights on long-term returns, risk, or potential benefits of holding these specific funds in a Roth vs. traditional IRA?

I’d appreciate any advice or experiences!

[Sean]

If you already maxed out the Roth IRA you can’t also contribute to a traditional Ira.

If you you already have vtsax, vfiax doesn’t really add any diversity or anything.

[Barry]

Others have covered the Roth/Traditional IRA limit (basically, it’s a combined total for the two, so if you’ve maxed one, you’re done for the year).

If you are looking for other funds to invest in, consider adding some small-cap value (VIOV, AVUV, or similar).

Paul Merriman famously recommends 50% Total Stock Market, 50% SCV as a simple, long-term accumulation portfolio, and ChooseFI luminary Frank Vasquez does something similar on the equities side of his risk parity portfolios.

[Charlie]

It’s Roth OR Traditional IRA…unless you mean you maxed out your Roth 401k?

[Bill]

HDHP with HSA. You can max and invest that money. For 2024, $4,150 for single and $8,300 Self + 1/Family.

[Author]

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