Bogleheads.org

If using "not sure" seems to work fairly well when joining credit unions, has anybody tried this at Southern gas credit union http://www.depositaccounts.com/cd/3-year-cd-rates.html They have 3year cd at 2.35% It doesn't necessarily work at all or even most credit unions. I joined another ...

Don't notice that much difference. I record it, and occasionally watch it, fast forwarding through most of it.

Kevin

I'm checking them out now and all appears good. To qualify for membership, one only has to have bought an appliance sometime during their lifetime. My transfers from other IRAs have been completed, and I can see, online, my money sitting happily in the 5-year CD. There were a couple of minor snafus...

Scooter57 wrote:So minimizing earnings to cut taxes seems silly to me.

Who proposed that? I think what we want is to maximize after-tax returns and after-tax income.

Kevin

Kevin, yes, I've been thinking of using CDs in taxable to free up some space for VSS and VTV in tax-advantaged (given that CD rates are ~1% nominal after-tax currently with best credit / default risk). Tax-advantaged space for me does not have as good of CD options (brokered CDs at best) and bond y...

if your positive you will break the cd early go with ally. if not i can see going to somewhere else.this fixation i see on this board is just about everyone thinks rate will go up in the near term. i don't think so Only if you're likely to break the CD in less than two years. The MACU CD comes out ...

So I have total bond market in a Roth IRA at Vanguard. I could "transfer" that Roth IRA to Mountain in order to take advantage of the CD being discussed? Thanks Xram Yes. You can do a partial or complete transfer of your Vanguard IRA (Roth or Traditional) to another custodian, such as MAC...

Ally Bank has a 5 year CD paying 1.54% with 2 month interest penalty for early withdrawal versus Mountain Credit's 6 month penalty, maybe the difference in interest rate at Ally and the early withdrawal rate at Mountain is a wash and Ally would be the better vehicle, just a thought. The Ally rate i...

Any thinking on Ulta Short Bond funds or ETFs (example: PIMCO Enhanced Short Maturity (MINT)) that are actively managed? Thanks You should look carefully at the fund. I'm generally averse to anything called "ultra short", because ultra short funds performed disastrously during the fiscal ...

I don't really have "new money", since I'm retired . Kevin You make that sound like a bad thing. :wink: Funny, I certainly didn't mean it that way. :o Thanks for the info, from one retired friend to another. :sharebeer Right on. Some people just don't understand how busy being retired can...

Good info, Kevin, thanks for sharing. So, are you using your remaining bond funds to rebalance, rebalancing with new money or some other method? Thanks Blues. Lately rebalancing has been from stocks to fixed income, so it hasn't been an issue. When I added to equities during the last couple of equi...

I tilt, all in taxable, except for REIT (if you want to consider that tilting) which is in an IRA. I have harvested enough tax losses to offset gains from rebalancing for many years. If you don't have losses carried forward to offset future gains, I think the degree to which you tilt in taxable depe...

I just published a blog post on my experience with opening an account at Mountain America Credit Union, and transferring money from other IRA accounts into a new IRA account at MACU to purchase one of their 5-year CDs: Kevin On Investing: Mountain America Credit Union 5-Year CD . I like to share thi...

I am in the limited term tax exempt fund, in a taxable account. Would a CD ladder give me a better yield - and how do i set that up with vanguard? I have a brokerage acct. Yes, you can definitely do much better with CDs than with that fund, especially if using SEC yield as your measure (if using di...

I now conclude that this is a very stupid investment. I can get 1% with stable asset value in a money market fund with one of my credit unions and in a savings account at Citizen's Bank. (It's a teaser rate, so every couple months I have to close the account and start a new one to keep getting it.)...

Is most of your portfolio tied up in 401K/403B plans, or do you have a fair amount in IRAs and taxable accounts? If the latter, then I would favor CDs over any bond fund, since you can get a comparable if not better yield with much less risk. If the former, then I would weight my fixed income toward...

Yes. I retired in 2007, and rebalanced into equities in 2008 and early 2009, although perhaps not completely back to my targets due to fear/caution. I recently rebalanced out of equities to get back to target. I also added to equities during the couple of 10%-20% corrections we have had since 2009. ...

If you have options outside of 401K/403B plans, like IRAs or taxable accounts, then I would hold a minimal amount of any short-term bond fund. Instead I would put a major chunk of my fixed income in 5-year CDs earning between 1.5% and 2.0% with reasonable early withdrawal penalties (60 days to 180 d...

I found a high-yield fixed income ETF that doesn't own any bonds with ratings lower than "B". It's the Powershares Fundamental High Yield Corporate Bond Portfolio (PHB) I wonder if this would be an apples-to-apples high yield bond fund in comparison to Vanguard High Yield Corporate Bond F...

... advisors who recommend against buying I Bonds, given today's lack of a better risk-free option and with all the benefits that come with I Bonds (tax-deferral, freedom from state and local taxes and the possible tax-free use for qualifying educational expenses) are probably doing so to line thei...

The advisors are clearly telling people no.. so more for us. http://articles.marketwatch.com/2013-02-12/finance/37051732_1_savings-bonds-series-i-savings-current-variable-rate $22 million total for the country from 2012 tax returns. After all the advisor doesn't make money from selling I-bonds, so ...

Her 401k has all institutional or signal shares of the Vanguard big 3: Total Stock Market Index, Total international, and Total Bond. Basically I'm setting up a TR fund in the 401k with the underlying funds to save her some $ on expense ratios over the years (although as discussed, I may substitute...

Although I think TR funds are great for simplicity, I would not use one in a multi-account portfolio. I would take advantage of the excellent funds available at Vanguard to get what I couldn't get in the 401K. Also, the TR fund makes tracking AA more complicated. That's me though. Given your sister'...

Thanks for all the feedback. The opinions are pretty one-sided, perhaps rare for the Bogleheads, but that makes it easier for me. 25% of her 401k allocation is for fixed income, so maybe I'll have her do 15% stable value and 10% Total Bond Market. I'll have to wait until her 401k plan lets her chan...

Yep, at least half of fixed income in the SV fund, if not all.

Kevin

RE: I Bonds and your EF, why not just count the appropriate portion of them as your EF and include the rest as fixed income in your portfolio (disclaimer; I haven't read the details of your situation lately, just the question I'm addressing here). Personally, I have never considered any part of my p...

It seems the Wiki is incorrect on this point. It also is incorrect about the $10K per SSN limit, since you can buy an additional $10K in an entity account that uses the same SSN as your individual account; e.g., for a living trust. I've done so for the last two years.

Kevin

A Barclays rep confirmed by phone that CDs opened before 3/16 are covered by the terms in effect at that time; i.e., EWP of 90 days of interest. The FAQ has been updated to be consistent with the new terms (180 days of interest for CDs with terms longer than 2 years). He said they will send me a wri...

Kevin of course if you get big enough moves you can still be forced to buy equities instead of just drawing down on the better performing bonds to get you back into balance---but that becomes even more psychologically difficult. Best wishes Larry Tell me about it! I woke up anxious every morning fo...

Unfortunately not everybody else ignored her municiple bond forecast. Vg municiple bond fund dropped quite a bit following that forecast. The forecast was wrong and has since recovered nicely for those staying the course. Not only did I ignore it, I actually greatly increased my muni-bond fund hold...

Thanks for sharing, Larry. Good interview, and great points about following Buffett's advice to be a relatively passive investor. Only part I disagree with is that you said in the withdrawal phase you aren't buying, but only selling what has done relatively well. For me that has not been the case. A...

Remember Meredith Whitney's infamous prediction of massive muni bond defaults? Well, I just happened to catch her on CNBC. After strong recommendations to buy Bank of America and Discover, she said this in response to her view on "the broader market": "I have not been this constructiv...

In a comment someone posted on my recent blog post about opening a Barclays 5-year CD, it was pointed out that the CD Terms and Conditions state that the early withdrawal penalty (EWP) on CDs with terms longer than two years is 180 days of interest, although on the web site (specifically in the FAQ)...

Thanks Blues, but even if they had replied in the negative, I would keep doing what I'm doing. I've had several correction notices from the IRS (on other issues), all of which were resolved in my favor (they even ended up sending me a small refund in one case), and the impression I always got is the...

Been so long since I've had any interest bearing bank accounts that I was wondering if it would be okay (next year) to combine the aggregate interest from multiple CD's and a money market from a single payer on one 1099-INT on the tax prep software? (All accounts registered in the same fashion.) Th...

I hear what you are saying about I Bonds and CDs, only my situation here involves rebalancing inside tax advantaged space (e.g., 401K or Trad IRA). With markets behaving as they have of late, I have crossed a band and need to re-up my bond allocation to stay in line with plan. I think you misunders...

I would do neither. I would transfer some or all of the IRA to a bank or credit union where I could earn between 1.6% and 2% on a 5-year or 7-year CD with an early withdrawal penalty of between 60 days and 365 days of interest. With a current SEC yield of 1.73% for Total Bond, a good CD gives you a ...

Barclays still is offering 1.00% on their savings accounts, and opening an account is super easy. Also, their web interface is cleaner and much faster than Ally's. I haven't yet bothered to open a savings account there for the few extra basis points over Ally (although I might at some point; it only...

Yes, and it's a good option. As long as your RMDs are likely to cover your tax liability, you can wait until late in the year to determine how much to withhold, and there will be no penalty for underpayment of estimated taxes. For example, I was planning on doing a Roth conversion last year, so plan...

No. Some time ago I helped a friend switch from ETF share class to admiral share class in an IRA (to simplify buying and selling for him). We used proceeds from money market and/or short-term bond funds to do the initial admiral shares purchases, selling approximately the same amount of the ETFs on ...

^For the duration relationship you reference to apply evenly to bond funds of different durations would require a parallel shift in the yield curve. If short-term rates increase while intermediate-term rates stay flat, short-term bond funds will decrease in value while intermediate-term bond funds w...

Whoops I missed typed that. I meant to say "But for the future, I am gonna look into transferring my Taxable Money Market to a bank or a credit union" FYI, I don't use IRA CDs at banks and credit unions to replace money market funds in my IRAs, I use them as an alternative to bond funds. ...

Thanks. So you're saying it's not really too good to be true. Also, FYI, you and the previous poster put three "c"s in your website link. (Fixed the links in my previous posts) No, not too good to be true. I first mentioned reward checking accounts in my blog in December of 2009, Your Cas...

Only problem I see is that the IRS does not allow make-up contributions in future years. If it did, I could agree with placing a higher priority on paying down high-interest rate debt. Good to consider, but the young folks I know are not coming close to maxing out their retirement accounts each yea...

^ I Bonds (in taxable) to the max each year ($30K for you, spouse and trust, and another $5K as tax refund), then non-brokered CDs paying up to 2% in IRAs (requires doing a partial IRA transfer to a bank or credit union).

Kevin

How is it that banks' checking accounts offer better interest rates than savings accounts / CD's? I'd gladly set up direct deposit and be sure to use my debit card XX times per month for guaranteed 4% on checking... You can read all about reward checking accounts at http://www.depositaccounts.com, ...

So if I have 5k in the money market for my Roth IRA for 2 years. I will see it increase by .01% every year? Unless rates change, yes. You will earn about $0.50 for the year, so you will see a dividend of about $0.04 per month. If it were me, I probably would transfer the Roth to a bank or credit un...

I just checked, and the last dividend I got in my Prime Money Market account (sweep account for brokerage) was $0.03 on 12/31/12. Prior to that I got a dividend of $0.02 on 2/29/12. The fund pays dividends monthly, so apparently if you haven't accumulated at least $0.01 in interest, you don't see a ...

You don't see the expense represented by the ER come out of your account. It happens behind the scenes. The interest or dividends you earn is what's left after the fund expenses are paid. The yields shown by Vanguard are after-expense yields. That's why the lower cost (lower ER) Admiral shares of a ...

The close to 0% yield on the money market funds is why I don't use them in taxable accounts anymore, other than as a sweep account for my brokerage account (and anything that gets swept into it is soon transferred to one of my bank accounts). Instead I have links to checking and savings accounts pay...