Q: My wife and I make too much to qualify for a Roth. I want to make a non-deductible IRA contribution for 2011 and then convert it to a Roth at a later time. Which Vanguard fund would you recommend? We are both 33 years old.
A: Regardless of your plans for future conversion, your current IRA investment allocation should match the allocation you have picked out for your retirement goal/bucket of assets. You could do this by mixing and matching Vanguard funds that invest in specific asset classes. Or you could consider using one of Vanguard’s actively managed or diversified funds – like a Wellesley or Wellington. We can’t specifically recommend how you invest, but I hope that points you in the right direction. At your age, keeping your fees as low as possible is a great way to augment your return in the decades to come, so Vanguard is a great place to start.