Investing

In general, you should save money in the following accounts in order:

1. 401k, 403b, or thrift savings (up to employer-match)
2. Traditional or Roth IRA (up to IRS limit)
3. 401k, 403b (up to IRS limit)
4. Investing account
5. High-yield Savings, Cash account, or CD
6. Checking account

• 1-3 will be tax-advantaged (either tax-free or tax-deferred)
• 4-6 will not be tax-advantaged

Individual Retirement Account (IRA)

A tax-advantaged retirement account you can control.
The IRS allows you to deposit up to $6000 ($7000 if 50 or older) per year or up to your income, whichever is lower. Note that this limit is for all your IRAs combined. Typically, you should save in a Roth IRA unless you surpass the income limit. If you're not eligible for the Roth IRA, you may consider the backdoor Roth IRA.

Traditional IRA

In a traditional IRA, you deposit pre-tax money. Thus, your deposit counts as a tax-deduction. You pay taxes when you withdraw your money.

Notes

• Early withdraws (before age 59.5) are subject to a 10% penalty plus taxes
• You must start taking required minimum distributions (RMDs) at age 72
• No more contributions after age 70.5

Roth IRA

In a Roth IRA, you deposit post-tax money. However, your money grows tax-free.
There is an income limit to the Roth IRA of $124,000 in 2020.

Notes

• No required minimum distributions on your own Roth IRAs
  • There are RMDs on inherited Roth IRAs
• You can withdraw your contributions (but not earnings) without penalty
  • Note that any further contributions will count towards your annual limit so you cannot "borrow" from your Roth IRA.
• No age limits on contributions

ETFs

Exchange-traded funds. Typically these will have a fee called an expense ratio. However, since they are not usually actively managed, their fees are often lower than mutual funds. The expense ratio is measured in basis points. 25 basis points is an annual fee of 0.25%.

Stocks

S&P 500

• SPY SPDR S&P 500 Trust ETF
  • Expense Ratio: 0.0945%
• VOO Vanguard S&P 500 ETF
  • Expense Ratio: 0.03%
  • Holdings: 512
• IVV iShares Core S&P 500 ETF
  • Expense Ratio: 0.04%
    • Holdings: 505

Total US Stock Market

• VTI Vanguard Total Stock Market ETF
  • Expense Ratio: 0.03%
  • Holdings: 3,592
• SCHB Schwab U.S. Broad Market ETF
  • Expense Ratio: 0.03%
  • Holdings: 2,477
• ITOT iShares Core S&P Total U.S. Stock Market ETF
  • Expense Ratio: 0.03%
  • Holdings: 3,685

Forign Stocks

• VEA Vanguard FTSE Developed Markets ETF
  • Expense Ratio: 0.05%
• IXUS iShares Core MSCI Total International Stock ETF
  • Expense Ratio: 0.09$
• SCHF Schwab International Equity ETF
  • Expense Ratio: 0.06%

Emerging Markets

• VWO Vanguard FTSE Emerging Markets ETF
  • Expense Ratio: 0.12%
• IEMG iShares Core MSCI Emerging Markets ETF
  • Expense Ratio: 0.14%
• SCHE Schwab Emerging Markets Equity ETF
  • Expense Ratio: 0.13%

Robo-Investors

Acorns

Main article: Acorns (company)

You can select between 5 different portfolios of ETFs based on your risk level.

Acorns invests in the following ETFs:

• Large Company Stock (VOO)
• International Large Company Stocks (VEA)
• Small Company Stock (VB)
• Corporate Bonds (LQD)
• Government Bonds (SHY)
• Real Estate Stock (VNQ)
• Emerging Market Stock (VWO)

Later

Acorns later is an IRA account.
They offer a traditional IRA, Roth IRA, and SEP IRA.
You can signup and deposit money but you have no other choices.
Your portfolio is selected by Acorns based on your age.

Wealthfront

Main article: Wealthfront

Referral

Benefits

• Tax-Loss Harvesting

Cash Account

Wealthfront offers a cash (i.e. savings) account. This account is distributed between 4 banks so it is FDIC Insured up to $1 million