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I currently hold vanguards 2045 lifecycle fund in my roth IRA, I have a 401k(not a roth 401k) as well that has the vanguard 2045 fund as an investment option. should I invest in the vanguard fund in my 401k or in my IRA?
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Hi,

I think we need to clarify your question. Are you talking about investing new money, and want to decide if that new money should go into the pretax 401k or post-tax Roth? Or are you investing money near the annual limits in both accounts anyway, and want to decide which should hold your portfolio allocation for this particular 2045 lifecycle fund?

The answer either way is likely to be the 401k, but for different reasons.

- Erik
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Either the 401k or Roth IRA tax advantaged accounts would be suitable for the lifecycle (target retirement) fund. If you are trying to decide which one it depends on what other investments you have.

Bob
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I max out both my 401k and my roth each year. The roth is not with vanguard(I use USAA for my roth) so I have to pay a big fee to make a trade on vanguard(each year I make the max contribution to the roth in 1 shot so I only have to pay the fee once. Should I start adding to the vanguard fund in my 401k and wait until the vanguard in my roth recovers then sell it off and buy something else in the roth while continuing to contribute to the vanguard in my 401k?
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If you're maxing both the 401k and the Roth, then the decision on where to hold Vanguard 2045 Lifecycle would depend on which account has better options for the portion of your portfolio that isn't this fund. Typically the offerings of a 401k (where you're locked in to one custodian with no competition) won't be as good as those of a Roth custodian. Your situation might differ of course.

And I think that fee makes the choice clear in favor of the 401k. However, why not just open a Roth at Vanguard directly? You can have more than one Roth at different custodians, keeping the USAA Roth as well.


wait until the vanguard in my roth recovers then sell it off

This is market timing. Nobody knows what the Vanguard in your Roth will do in the next month or five months or year or five years. You could wait forever for a recovery, or sell after a partial recovery and miss a big run up.

However, I also need to point out that selling the Vanguard fund in the Roth and simultaneously buying it somewhere else is a zero-sum wash. If you're selling low, you're also buying low at the same price. Market timing should not be a factor in any of these decisions.

Hope that helps,
- Erik
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