Open Your Roth IRA, Invest in a Total Stock Market Index Fund | 5 Minute Military Money 7/10 #225
Step 7 in our 10-part series: open a Roth IRA at Vanguard, Fidelity, or Schwab and max out your contribution into a total stock market index fund.
Spencer and Jamie break down why the LADS method (Low-cost, Automated, Diversified, Simple) beats stock picking and why Roth almost always wins for military pay.
Topics covered:
- Why to open a Roth IRA at one of the big three: Vanguard, Fidelity, or Schwab
- Total stock market index fund options: VTI, SCHB, FZROX, VTSAX, VT
- Spencer's LADS method: Low-cost, Automated, Diversified, Simple
- How low fees compound — 3 cents per $100 vs. high-load funds from military-targeted advisors
- Buying the haystack instead of hunting for the needle (you already owned Nvidia a decade ago)
- Mutual funds vs. ETFs — why the difference doesn't matter for most investors
- Recreating a total US stock market in the TSP with 80% C Fund / 20% S Fund
- How the Roth IRA is a separate bucket from the Roth TSP — both have their own contribution limits
- Why Roth (pay taxes now) beats Traditional for most military families with low effective tax rates
- The narrow edge cases where Traditional might make sense (O-5+ doctors, some dual-military couples)
- Spencer's effective tax rate as a pilot and major was under 10% — often under 5%
Resources mentioned:
- Vanguard, Fidelity, Schwab (Roth IRA providers)
- VTI — Vanguard Total Stock Market Index Fund
- SCHB — Schwab Total Stock Market Index Fund
- FZROX — Fidelity Total Stock Market Index Fund
- VTSAX — Vanguard Total Stock Market mutual fund
- tsp.gov (for current contribution limits)
- Bogleheads forum (for the mutual fund vs. ETF deep dive)
Spencer and Jamie offer one-on-one Military Money Mentor sessions. Get your personal military money and personal finance questions answered in a confidential coaching call at militarymoneymanual.com/mentor.
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