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I'm still frozen on this issue. I decided to wait and see the distribution yield for TBM on June 1. Distribution yield dropped from 2.36% to 2.34%. SEC yield rose from 1.56% to 1.63%. Not much insight from those numbers for me. Alternatives to TBM: 1. Vanguard Brokered CDs: The easiest option would ...

The SEC yield is the yield you will get on the bond fund going forward. The other yield you see is past performance. This can be confusing. The SEC yield is considerably lower right now than the historical yield. Keep in mind that if the SEC yield of a bond fund were to rise your NAV would simultan...

As I get ready to purchase CDs, I realize that the total bond fund distributions are higher than the 2% that I can get for a cd right now. I am conflicted between staying the course until the distributions drop below the cd rate and the concern that the cd won't be available at the same rate when I ...

I understand the math that says that holding a bond fund for the duration of the fund after an interest rate increase will result in a return of the temporarily lost NAV plus a total return at the rate of return in effect prior to the interest rate increase. My question is which rate of return to ex...

Yes, in theory, I could hold for 5 years after each interest rate increase and I'd earn the interest rate prevailing at the time of the interest rate increase. But, at what cost? If instead, I purchase individual bonds and hold them to maturity, I never suffer any NAV loss regardless of what intere...

The reason to consider individual bonds is the guarantee that they will not lose NAV if held to maturity. In theory the fund also could function similarly if held for the duration after an interest rate increase. But, the NAV hit from multiple interest rate increases and the tiny returns have me con...

Thanks for some interesting thoughts. But, I think some are not clear on my question. I am suggesting moving out of two bond funds (total bond and Cal. intermediate tax free) and moving the money into individual California general obligation tax exempt bonds. I hear LH saying that treasuries and TIP...

I hold bond funds to offset equity risk too. The problem I'm having with bond funds is that they are becoming more risky and simultaneously going down in total return. As a result, I'm looking for alternatives that don't have the risk of a significant principle loss while at the same to meeting or b...

Sorry for another bond funds post. But, I'm starting to rethink my bond fund exposure. I'm in the Van total bond index fund in my IRA and the Cal. intermediate tax exempt bond fund in my taxable account. I hate the thought of significant NAV losses in these funds. These funds are supposed to be the ...

Denismurf suggested Zions Direct to me a few years ago and they have been great. Straight $9.95 per purchase.

A few years ago, I finally overcame my fear of bond funds going down when interest rates rose and moved a big chunk from CD's and savings accounts to Van Total Bond in an IRA account and Van Cal. Intermediate Tax Exempt in a taxable account. Over the course of the first year or so, I saw a bunch of ...

Thank you. After some web searches, I came to the same conclusions: 1. IRA: Name the children as primary beneficiaries. The only purpose of the trust is probate avoidance. Therefore, there is no purpose (and some potential downsides) to naming the trust as primary beneficiary. 2. Deferred Annuity: K...

After a few web searches, it appears that the potential downside to naming a trust as the primary beneficiary of an IRA is that it is possible that the IRA could be required to be distributed more quickly resulting in negative tax consequences. While the opinions on the web aren't totally uniform, i...

My elderly mother has a rollover IRA account in her name with the primary beneficiary the Living Trust for my mother and now deceased father. The secondary beneficiaries are all of her children. My mother also has an after tax deferred annuity account with the same company (Ameriprise) where the pri...

I'm not sure how many financial advisors understand the benefits of the Roth conversion. However, you should be able to find some articles on it. I've written on it for the Journal of Retirement Planning, and others have written on it for various journals. Or you could give them Dick Benson's and m...

I've been noodling the Roth issue. I now understand the tax savings. My Mom is on the edge of making this worth the effort. However, my siblings are VERY resistant to the idea. They keep asking why we would make Mom pay the tax now when we can pay it later if there is anything left when she passes. ...

I finally received copies of the annuity contracts from Riversource. I don't totally follow the annuity tables. But, here are some details: 1. Dad's Deferred Variable Annuity in rollover IRA (now rolled over into Mom's name in a new IRA with Ameriprise): Bought in 1988 with lump premium Fixed Intere...

My father just passed away and I am trying to help my mother get all of the financial affairs in order. They had a living trust and all of their bank and investment accounts included the living trust somehow (but they appear to be somewhat different at each location). I asked the attorney who drafte...

I hadn't thought about the Roth conversion. She has a few IRA's so the issue could cover more than one account. Obviously, she is at the stage where she can take out as much of the IRA that she wants without a penalty. So, the only question is whether it is worth taking the tax hit now for tax free ...

Thanks everyone. I have requested the contracts for both annuities. They are looking . . . My father passed in 2013 so we have this year as married filing jointly. But, I have been rolling over all of my dad's IRA's into IRA's for my mom--either newly created at the same financial instituation or in...

One thing I didn't see mentioned was what the money is currently invested in and if it would generate any taxes or fees if she sells her current investments to move the money around. I would assume that it might not but that would be worth confirming. Putting $10K a year into i-bonds would likely b...

you are comparing apples and oranges. If you put $500k in an annuity, you will get $60k per year in income, forever (using your figures). The advantage is your mom can't run out. The disadvantage is that her heirs will get nothing. Your plan actually makes her situatio more risky, and yours potenti...

I am helping my 84 year old mother after my dad recently passed away. I just discovered that they have two annuities and I'm not sure what to do with them. I haven't bothered studying up on annuities because I was always turned off by the fees. Anyway, I'd appreciate any insights into these two annu...

It is interesting that you mentioned a possible annuity. Here are the reasons why I decided that an annuity did not make sense in this situation. I have not studied annuities because I was always turned off by the fees. But, it looks like I may need to be a little more educated now. Buying an annuit...

Thanks for all the comments. This list is always great for helping me make sure that I've thought through all of the potential issues. One nugget that I can contribute is that I checked on NCUA deposit insurance limits and learned that they are expanded by the number of beneficiaries, if the account...

Ok, that makes sense. She is very conservative as my folks did somewhat poorly under a churning financial advisor years ago. It was all I could do to get them into the 22k total stock fund 7 years ago. Now that it is just my mom and she is 84, I think it is best just to stick with asset protection.

I don't think I could talk her into putting any more into the market. And, to be fair, I don't think she needs to take on any risk. If she lives to be 100, she could take out double her current spending needs (including social security) and still have enough to last all that time. Why take on any ma...

My father recently passed away and my mother has asked me to help her figure her finances. The bottom line is that she has about $550k in assets, not including her house and a small mountain cabin. Social security provides about $20k/year. I'm still getting my arms around annual spending. But, my gu...

I am sitting on a large foreign tax credit as a result of former employment. My accountant tells me that it is essentially useless because my new employment does not involve foreign income. Would investing in mutual funds with foreign stocks allow me to utilize my credit? I've got some of my portfol...

You could spend $3.9 M on an immediate annuity adjusted for inflation. That would give you $150,000 the first year and adjust for inflation thereafter. That'd leave you $1.1 M to invest and never have to touch .. unless you wanted more than $150,000 some year. Really? You can buy an annuity that gi...

Here is a hypothetical example with some math behind my thinking. Let's say one has a portfolio of $5 million that is splite 50% total stock fund and 50% total bond fund and a current annual budget of $150K. $150K is 3% of $5 million. However, if the stock market drops by 50%, then the stock portion...

Did you verify this using http://www.firecalc.com/ ? I don't know that firecalc supports this plan. I did play around with it, but I didn't see exactly what I'm describing. As someone pointed out to me several years ago, if you only take a set percentage out of your portfolio, by definition it will...

I am certain someone (likely many people) have considered the 4% reset method where you reset your 4% withdrawal every year based on your new portfolio value. I remember discussing the issue several years ago on one of these boards. I am now at the point where my resources match my budget for 3-4% w...

Why not sell at a loss receive a tax benefit (i.e. Form 1040 & Schedule D - up to $3,000 can be offset against ordinary income) and then make a cash contribution yet receiving another tax benefit (i.e. Schedule A - Itemized Deductions). In this example, the tax loss sales are not really related...

Thanks all! I found the IRS language. Just so I don't look so ignorant, the one earlier post that I found on Bogleheads that referred to this issue actually suggested checking to see if donating appreciated shares and buying new shares would be considered a wash sale. So, at least two of us are in t...

Thank you! I'm a bit embarrassed to say that I missed this simple point (i.e., that the wash sale rule only applies to sales of losses). For some reason, I've always just looked at it as a basis shifting rule and, therefore, worried that the basis shifting rule could be applied to a donation of appr...

If you have a loss, I don't see why you don't sell and give the cash to charity. If you gift the shares, you can't claim a loss vs your cost basis (you just deduct the value of the shares as a charitable contribution). Since you don't claim a loss, wash sale rule shouldn't apply. Suppose I just wan...

I searched the IRS website and I searched this website. I haven't seen an answer to the following question anywhere: If I donate stock/mutual fund shares to a charity, can I purchase the exact same stock/mutual fund shares within 30 days (either way) and NOT violate the wash sale rules? Everything I...

I've been doing a bunch of reading over the last few days regarding municipal bonds. I'm starting to understand the secondary market for those bonds (Vanguard and Fidelity charge up to $250 to make a purchase/redemption while Zions Direct charges $10.95, for example). However, I'm struggling with fi...

I am considering moving from Vanguard intermediate tax free bond fund to individual California municipal bonds. I am planning to hold the bonds to maturity. If I decide to stop working at some point, I would simply use the income stream and still very likely leave the bonds until maturity. I'm in t...

I have been doing what you propose for about 13 years with a $million or so. All used to be in my state of residence (MO), but now nationwide (including CA) since there's no income tax in my new state. I stick with max 3 years to maturity, AA or better, and never sell. I buy all on the secondary ma...

Thanks for the comments and ideas. The reason that I'm considering this swap is that I am worrying about my bonds as they sit in bond funds and we face the prospect of significantly increasing interest rates. I don't want to dig a hole that will take a long time to climb out of, and if rates just co...

I simply can't get past looking at the NAV. I put around $800K in bond funds last fall. This is my "safe" money to balance my stock risks. I made the purchases after avoiding the question for about 10 years by leaving the money in CD's, money markets, and federal bonds (I and EE). I had a ...

I am considering moving from Vanguard intermediate tax free bond fund to individual California municipal bonds. I am planning to hold the bonds to maturity. If I decide to stop working at some point, I would simply use the income stream and still very likely leave the bonds until maturity. I'm in th...

OK. My plan is to hold these bond funds indefinitely. The only change will be that in retirement I will switch to taking interest payments instead of reinvesting. My thinking is that with that plan in mind that I can always hold on to the fund for the duration after an interest rate spike. Therefor...

Did you look at the High-Yield Tax-Exempt Fund (VWAHX)? If you see the top holdings of VWAHX, you'll see that most of the investments are in municipal funds across TX, CA, and MI. The 10 year comparison between the High-Yield Tax-Exempt fund and the California Tax-Exempt fund show almost identical ...

Fair point. But, if I have no need for the funds, then I can hold for the duration after any large interest rate increase and end up with the approximate initial yield, right? In that case, isn't the tax exempt fund at 3.35% to 3.8% better than a 4% taxable CD (at around 2%)? I recognize that there...

Your arguments for muni fund over CD are sound. Thanks. That is my major concern at present. If I were to keep the CD's, I would need to make that call in the next few days. I recommend against single state muni funds, but the California one (and only that one among Vanguard single state funds) is ...

Fair point. But, if I have no need for the funds, then I can hold for the duration after any large interest rate increase and end up with the approximate initial yield, right? In that case, isn't the tax exempt fund at 3.35% to 3.8% better than a 4% taxable CD (at around 2%)? I recognize that there...

But, the math says that if I hold the fund for the same duration, I still get a better return after taxes. Right? That's not correct. An interest rate increase toward the end of your 5-year holding period will have a larger impact on your fund than on your CD, although your fund has a higher after-...