Search found 324 matches

by emlowe
Fri Jan 21, 2022 2:12 pm
Forum: Personal Investments
Topic: Bond alternative?
Replies: 39
Views: 4801

Re: Bond alternative?

Thank you. I see on Treaury Direct you can Direct Buy. I saw that the rate for EE Bonds is a sorry .10 percent! Nothing changed! I have 30 year bonds that mature Sept 2022 that are at 4%! Excellent. So, I won't buy any more EE Bonds. The I bonds have a 7% rate , while EE have .10 rate? This does not make sense. Isn't the fixed rate what is most important for owning a treasury bond? You do understand that if you hold the EE bond for 20 years, it doubles which equates to 3.527%/yr. There is a one-time adjustment done at 20 years that doubles the bond. So it's an interesting investment with a pretty long holding period to get the doubling. The I-Bond variable rate moves up in down every 6 months with inflation, so sometimes it pays quite a bi...
by emlowe
Fri Oct 22, 2021 7:05 pm
Forum: Personal Investments
Topic: EE bonds as annuity - limits
Replies: 62
Views: 6767

Re: EE bonds as annuity - limits

How much can a married couple invest in EE bonds in a year? I am looking towards building an annuity. From all posts here, folks mention investing 20k every year to get a 40k annuity after 20 years. Is that the max or can we invest 10k in the trust account as well for a total of 30k/year leading to an annuity of 60k? If it is allowed, any reason why folks don’t consider maximizing this to 60k? Thanks Each of you can open a living trust and invest $10k/year/trust. So the total with a reasonable trouble is $40k/year leading to an annuity of $80k. Considering that most people in the accumulation phase should invest around 70/30-80/20 stocks/bonds, and because EE-bonds are very illiquid, they should probably be at maximum only half of your bon...
by emlowe
Fri Oct 15, 2021 3:36 pm
Forum: Investing - Theory, News & General
Topic: What's the catch with I Bonds?
Replies: 356
Views: 74344

Re: What's the catch with I Bonds?

Just to update - following the September inflation report, the new rate will be a rather stunning 7.12% for 6 months. With the release of the September inflation report on Wednesday, we got rather stunning news: All U.S. Series I Savings Bonds will have an inflation-adjusted interest rate of 7.12%, annualized, for six months. That rate will launch immediately for I Bonds purchased in November, or in six months for I Bonds purchased in October. The key thing is: All I Bond investors will get that 7.12% eventually. But if you purchase an I Bond before the end of October, you will get an annualized return of 3.54% for six months, and then the 7.12% for six months. That adds up to a total return of about 5.33% for the year, a stellar number in ...
by emlowe
Wed Sep 15, 2021 6:33 pm
Forum: Investing - Theory, News & General
Topic: What's the catch with I Bonds?
Replies: 356
Views: 74344

Re: What's the catch with I Bonds?

3.54% inflation rate was good, but the August inflation rate is in, and now I Bonds now looking like a variable rate of 6.5% for six months on Nov.1

(I would guess the fixed rate will stay at 0)

August inflation points to a 6.5%+ inflation-adjusted rate for I Bond

https://tipswatch.com/2021/09/14/august ... -and-tips/
by emlowe
Tue Aug 17, 2021 6:58 pm
Forum: Personal Investments
Topic: Another I Bond Post, start moving emergency fund or not?
Replies: 44
Views: 5618

Re: Another I Bond Post, start moving emergency fund or not?

Holy moly, just looked at I-bonds on treasurydirect; the interest is compounded (semiannually), it is a tax deferred vehicle. and no State taxes. I am inclined towards moving my emergency fund which currently earns 5.0% but doesn't compound and I have to pay state and fed taxes each year which is close to 28%. Is the $10k annual limit per SSN or per household? thanks. Technically the limit is "per entity account" - you can one for yourself and one for your trust, even if you trust uses your SSN. But they are separate Treasury Direct accounts you need to manage. So a couple can easily have multiple accounts (personal, trust, joint trusts, etc) but managing them all is pretty annoying (IMO). I keep it to one for me and one for my s...
by emlowe
Mon Aug 16, 2021 9:35 pm
Forum: Personal Investments
Topic: Another I Bond Post, start moving emergency fund or not?
Replies: 44
Views: 5618

Re: Another I Bond Post, start moving emergency fund or not?

I think you might be misreading that chart.

Not sure if you meant to imply I-Bonds have never paid less than 3.54% - there have definitely been periods where I-Bonds have paid 0 for 6 months (fixed rate + (negative) variable rate). (However, a nice feature, it's never below zero even in deflation)

All I-Bonds reset to the variable rate - so once the variable rate was set at 3.54%, every I Bond would reset to that at a minimum. Then you add on the fixed rate. Recently the fixed rate has been 0 or very low, so most recent I-Bonds are paying pretty close to whatever the variable rate is.
by emlowe
Mon Aug 16, 2021 9:25 pm
Forum: Personal Investments
Topic: Another I Bond Post, start moving emergency fund or not?
Replies: 44
Views: 5618

Re: Another I Bond Post, start moving emergency fund or not?

Holy moly, just looked at I-bonds on treasurydirect; the interest is compounded (semiannually), it is a tax deferred vehicle. and no State taxes. I am inclined towards moving my emergency fund which currently earns 5.0% but doesn't compound and I have to pay state and fed taxes each year which is close to 28%. Is the $10k annual limit per SSN or per household? thanks. Technically the limit is "per entity account" - you can one for yourself and one for your trust, even if you trust uses your SSN. But they are separate Treasury Direct accounts you need to manage. So a couple can easily have multiple accounts (personal, trust, joint trusts, etc) but managing them all is pretty annoying (IMO). I keep it to one for me and one for my s...
by emlowe
Mon Aug 16, 2021 9:11 pm
Forum: Personal Investments
Topic: Another I Bond Post, start moving emergency fund or not?
Replies: 44
Views: 5618

Re: Another I Bond Post, start moving emergency fund or not?

I Bonds could get a variable rate of 6% (or higher) for six months on Nov.1

July inflation points to a 6.0%+ inflation-adjusted rate for I Bond

https://tipswatch.com/2021/08/11/july-i ... rity-cola/
by emlowe
Fri Apr 30, 2021 2:56 pm
Forum: Personal Investments
Topic: I-Bonds instead of Marcus?
Replies: 15
Views: 2279

Re: I-Bonds instead of Marcus?

csm14 wrote: Thu Apr 29, 2021 4:52 pm Hello,

I read that you can never redeem for less than you purchased for? \\
This is certainly wrong for electronic bonds, you can redeem almost any amount regardless of how much you purchased - the minimum is $25 and from there you can use increments of 1 cent. So you can buy 10k of bonds using TreasuryDirect, and then redeem $35.07, or $40.56, or $5,689.09. Pretty much whatever
by emlowe
Tue Apr 27, 2021 6:25 pm
Forum: Personal Investments
Topic: Investment strategy for my 88 year old mom
Replies: 18
Views: 2027

Re: Investment strategy for my 88 year old mom

Take a portion of it in an SPIA (immediate annuity) might be something to consider. I think at 88, putting 250k in an SPIA might net her something like 3k/month. (https://www.bogleheads.org/wiki/Immediate_fixed_annuity)

Does social security currently cover all her expenses?
by emlowe
Tue Apr 27, 2021 5:32 pm
Forum: Personal Investments
Topic: Moving Taxable to a core-4
Replies: 7
Views: 963

Re: Moving Taxable to a core-4

Just an FYI, that if your accounts are currently at Fidelity, you can just keep them there as Fidelity has a whole host of Boglehead approved low-cost index funds and access to similar ETFs.

If you are unhappy with Fidelity or prefer Vanguard, then go ahead and change brokerages, but there are good choices at Fidelity if you want to just stay.
by emlowe
Fri Apr 23, 2021 5:31 pm
Forum: Personal Investments
Topic: I savings bonds for emergency fund
Replies: 55
Views: 7867

Re: I savings bonds for emergency fund

You can cash a minimum of $25 or any amount above that in 1-cent increments. If you cash only a portion of the bond’s value, you must leave at least $25 in the TreasuryDirect account. Redemptions are comprised of principal and interest. (In a partial redemption, we pay interest only on the partial amount you cash.)
https://www.treasurydirect.gov/indiv/re ... redeem.htm

It may take a couple of days to transfer over to your bank account.

For penalty within 5 years, you only pay a penalty of 3-months interest, which is pretty minimal. Considering the I-Bonds are right now very likely paying more interest than anything else, you are still ahead even with this penalty.
by emlowe
Wed Apr 21, 2021 10:50 pm
Forum: Personal Investments
Topic: Should I use I bonds as emergency fund?
Replies: 20
Views: 2920

Re: Should I use I bonds as emergency fund?

VTAPX: Buy as much as you want. I-Bonds: You can only buy electronically $10,000/yr. VTAPX: Sell whenever you want. I-Bonds: Cannot sell within the first year. VTAPX: Sell with no penalty. I-Bonds: Sell within 5 years and pay a penalty of the last three months of interest. VTAPX: Has a built-in ladder of bonds ranging in duration 1 to 5 years. I-Bonds: You have to build you own ladder. VTAPX: Produces dividends forever. I-Bonds: Produces interest for 30 years only. VTAPX: dividends are taxable every year state and fed I-Bonds: state tax-free, fed tax-deferred. Can be used fed tax-free for education with AGI limits VTAPX: Can lose money (total return was negative for 2013, 2014, & 2015) I-Bonds: Can not lose money, the principal is alwa...
by emlowe
Wed Apr 21, 2021 11:59 am
Forum: Personal Investments
Topic: Should I use I bonds as emergency fund?
Replies: 20
Views: 2920

Re: Should I use I bonds as emergency fund?

The only real downside to I-Bonds (other than the 12 month period) IMO is just the mechanics of using the TreasuryDirect site. You have to log into your account, purchase the bonds, then (ideally) give transact rights to your spouse. Then your spouse has to login into their account, make their own purchase, and then also give transact rights to you. So it's just a little cumbersome. You can also use a trust to make additional purchases, but you now have more accounts to manage. Both these accounts can be sourced from the same joint savings/checking account though. The part about transact rights allows you or your spouse the ability to sell any/all the bonds from one account, so this makes redeeming the bonds a little easier. FYI, I'll note ...
by emlowe
Thu Apr 15, 2021 7:24 pm
Forum: Personal Investments
Topic: thinking about adding some REIT
Replies: 104
Views: 8140

Re: thinking about adding some REIT

Rick Ferri includes REITs in his "Core-4" portfolio - he lists the following
The reason I included REITs in the Core Four is:

1) REITs are a bona fide separate asset class than stocks and bonds. They have different underlying assets, different tax structure, different risks, and ll that is evident in historically low to varying correlations with bond and common stocks.

2) Commercial real estate represents about 15% of our economy, but only 2% of the stock market. So it is disproportionally underrepresented in a market index (made worse in 2007 by the privatization of the largest REIT - Equity Office Properties).
for lots of juicy details read viewtopic.php?t=10413
by emlowe
Thu Mar 11, 2021 2:53 pm
Forum: Personal Investments
Topic: Have money but cannot access it - what are options?
Replies: 36
Views: 4563

Re: Have money but cannot access it - what are options?

The megaback door allows one to sock a pretty substantial amount into a Roth vehicle - you can reach up to the total maximum for defined contribution plans which in 2020 was 57k (and was 53k in 2015), so this is usually at least another 30k into the roth. So for example, you could put in for 2021, 19500 into the Roth 401k and assuming the company matches 5k, put another 33,500 into the Roth - for a total of 53k into a roth vehicle of some kind

And you can still use the regular back door. Another 6k. So now you are up to 59k for a single year
by emlowe
Wed Mar 10, 2021 3:41 pm
Forum: Personal Investments
Topic: Where do you keep your emergency fund?
Replies: 45
Views: 4879

Re: Where do you keep your emergency fund?

moruobai wrote: Wed Mar 10, 2021 7:41 am Personally I keep it in cash, but if you're looking for a cash alternative for at least part of the EF consider I-Bonds.

Linked to inflation so you can eliminate inflation risk. Don't trade on a market so you don't incur risk to principal.

They pay fairly high interest rates, typically better than you can get on long-term CDs or any online savings bank. Redeemable after 1 year with a half-year interest penalty. Redeemable after 5 years with no interest penalty. Accrue interest for up to 30 years.

More here:
https://www.treasurydirect.gov/indiv/pr ... glance.htm
Slight correction, before 5 years, you forfeit interest from the previous 3 months, not half-year (6 months).
by emlowe
Thu Jan 28, 2021 11:32 am
Forum: Personal Investments
Topic: For Boglehead California residents in high tax brackets what bond fund do you use in your taxable account ?
Replies: 25
Views: 2448

Re: For Boglehead California residents in high tax brackets what bond fund do you use in your taxable account ?

Don't forget you can also buy Savings Bonds, I and EE. Tax deferred - so these can expand your bond space a bit
by emlowe
Thu Jan 28, 2021 11:24 am
Forum: Personal Investments
Topic: I-Bonds - purchase now or May
Replies: 14
Views: 1973

Re: I-Bonds - purchase now or May

Thanks HueyLD,

I spent a minute or two looking but didn't find anything definitive, so thanks for the information that the fixed rate also cannot be negative.
by emlowe
Wed Jan 27, 2021 10:23 pm
Forum: Personal Investments
Topic: I-Bonds - purchase now or May
Replies: 14
Views: 1973

Re: I-Bonds - purchase now or May

Dominic wrote: Wed Jan 27, 2021 6:33 pm The earlier you purchase, the earlier you can redeem them.

I don't think we'll see negative real rates on I-Bonds just yet, but the rate is certainly not going to go up in May.
You mean a negative fixed rate? I guess that's technically possible. However, the composite rate can never be negative.
by emlowe
Fri Jan 22, 2021 10:42 am
Forum: Personal Investments
Topic: Your thoughts on how to invest our cash savings
Replies: 44
Views: 5025

Re: Your thoughts on how to invest our cash savings

I would consider taking 40k and buying max buy I and EE Bonds for you and spouse. Rinse repeat every year.
by emlowe
Fri Jan 15, 2021 7:00 pm
Forum: Personal Investments
Topic: Whats the most gross expense ratio you would consider when buying a mutual fund?
Replies: 73
Views: 7917

Re: Whats the most gross expense ratio you would consider when buying a mutual fund?

wolf359 wrote: Wed Dec 18, 2019 6:36 pm Contrary to what many here believe, it is quite possible for actively traded funds to outperform low-cost index funds.
I don't think that is what most here believe at all. I think almost all here would agree that it is possible.

The question is not Can they outperform? The question is Which ones?

Wouldn't we all love to know?
by emlowe
Thu Jan 14, 2021 3:31 pm
Forum: Personal Investments
Topic: Can I bonds Interest Rate Go Negative?
Replies: 8
Views: 889

Re: Can I bonds Interest Rate Go Negative?

MishkaWorries wrote: Thu Jan 14, 2021 2:12 pm Thanks all. It's amazing how much everyone around here knows.

I was just wondering if I had to get my I bonds issued before May 1 and the new rate. I guess there's no hurry!
There is also very little reason to wait, IMO - the fixed rate is currently 0 and is very unlikely to change in the new rate. So you might as well buy now and get the 1.68% combined rate for the next 6 months.

(https://tipswatch.com/2021/01/06/an-i-b ... ust-do-it/)
by emlowe
Wed Jan 06, 2021 9:59 am
Forum: Personal Investments
Topic: Health Equity HSA 60-Day Rollover to Fido
Replies: 17
Views: 1691

Re: Health Equity HSA 60-Day Rollover to Fido

Helo80 wrote: Tue Jan 05, 2021 7:54 pm Some will likely encourage you to do a Direct Rollover as a trustee to trustee transfer.... but enjoy the eternal wait of Health Equity taking their sweet time to approve the moving of money. If we had the technology ready to go, you could literally fly into space, visit the moon, and return to Earth before these trustee to trustee transfers take place.
This is true - a HealthEquity partial trustee to trustee transfer (which you can do as many times as you want in a year as opposed to the rollover) will take longer than 2 weeks. HealthEquity waits 2 weeks after receiving the request before they even bother to cut a check - they will then write a check and mail it to fidelity, which often takes another week (give or take)
by emlowe
Thu Dec 31, 2020 9:28 pm
Forum: Personal Investments
Topic: Where is the best place to put my emergency fund
Replies: 31
Views: 5013

Re: Where is the best place to put my emergency fund

Fran K wrote: Thu Dec 31, 2020 9:17 pm
Thanks emlowe! If I am understanding correctly, I am essentially transferring this money to my child when I buy the I Bonds. Does this mean this would count towards the annual gifting limit?
This is my understanding yes
by emlowe
Thu Dec 31, 2020 9:09 pm
Forum: Personal Investments
Topic: Where is the best place to put my emergency fund
Replies: 31
Views: 5013

Re: Where is the best place to put my emergency fund

Does this money become theirs in the same kind of way a custodial account works or can I buy it with their social security numbers but make it part of my portfolio? You create a minor-linked custodial account. It is linked to your primary account. You can buy/sell in there on your child's behalf until they turn 18. Bonds purchased in this account would belong to the child, but you have custodial rights. (https://www.treasurydirect.gov/indiv/help/TDHelp/help_ug_126-LinkedAccountLearnMore.htm) Minor Account: This is a custodial account that a parent, natural guardian, or person providing chief support establishes for a child under the age of 18. The Minor account is linked to your primary TreasuryDirect account and only you, as the custodian...
by emlowe
Thu Dec 31, 2020 3:34 pm
Forum: Personal Investments
Topic: Critique My Half-Baked 529 Scheme
Replies: 9
Views: 840

Re: Critique My Half-Baked 529 Scheme

The 529 part of the plan is fine - if overly complicated.

I assume these credits get converted to cash at some point <"I just get a nice bonus of a few hundred bucks every 8 weeks"> - so why don't you just deposit that in a 529 in your kids name?

I think what you are saying is this:

1) Take $100 course
2) Do not yet pay for course
3) Get reimbursed $100 from employer
4) deposit $100 in 529 - claim whatever state tax benefits
5) withdraw $100 from 529 to finally pay tuition
6) school sends you back check for $15
7) deposit $15 in your 529.

rinse-repeat.

Sure I see no problems with that technically (other than the reimbursements that I mentioned earlier)
by emlowe
Thu Dec 31, 2020 3:06 pm
Forum: Personal Investments
Topic: Critique My Half-Baked 529 Scheme
Replies: 9
Views: 840

Re: Critique My Half-Baked 529 Scheme

STVCT wrote: Thu Dec 31, 2020 2:59 pm I have poorly explained step 3.

I end up being reimbursed more than I owe and find myself up 15% of the cost for each course.
I expect your employer would consider this as rather improper. Generally, employers do not appreciate submitting expenses for more than you actually paid.
by emlowe
Thu Dec 31, 2020 1:21 pm
Forum: Personal Investments
Topic: How to invest $200k (from 2.25% cash out refinancing)?
Replies: 193
Views: 14727

Re: How to invest $200k (from 2.25% cash out refinancing)?

There are some interest rate pseudo-arbitrage gains available with MYGAs - see recent excellent post on them here viewtopic.php?f=1&t=334589

You could get around 3.5% on some B++ rated MYGAs

Of course, that does come at the loss of liquidity and some (limited) risk. No free lunch I suppose etc.
by emlowe
Thu Dec 31, 2020 1:10 pm
Forum: Investing - Theory, News & General
Topic: The Case Against 529's
Replies: 219
Views: 18776

Re: The Case Against 529's

OP,

You are not saving for college, so naturally, a 529 doesn't make any sense to you. You aspire to pay for college from your cash-flow, or investments and failing that your kids will pay themselves (loans, etc) - that you may or may not help repay at some future date.

But you are not expressly saving for college, which is why you argue that 529's don't make sense.

The question you are really asking is why does anyone actually save for college?
by emlowe
Mon Dec 28, 2020 3:12 pm
Forum: Personal Investments
Topic: Process to move HSA funds from HealthEquity to Fidelity (California)
Replies: 14
Views: 2705

Re: Process to move HSA funds from HealthEquity to Fidelity (California)

1. Do I have to sell the investments at HE before initiating transfer? 2. Do I initiate transfer at Fidelity using this this form or at HE using this this form? 3. How often is it recommended to do this process? 4. Is there any CA tax paperwork to do due to the transfer ? 1) pretty sure you need to sell the funds to transfer cash. I keep all my HE account in cash instead of investing it. 2) Use the HE partial transfer form - make sure to check "partial transfer/do not close" - this is very important. 3) I do it a couple times a year - usually after my employer contribution and then again later in the year. 4) I haven't filled out anything, so I hope not :-) It will take several weeks, HE will wait 2 weeks before even cutting the ...
by emlowe
Fri Aug 21, 2020 1:50 pm
Forum: Personal Investments
Topic: Real estate continues to soar (great for landlords)
Replies: 71
Views: 6868

Re: Real estate continues to soar (great for landlords)

Seems to me it's great for homeowners, and questionable for landlords. I never understood why appreciation would be generally good for homeowners, even settin aside property taxes. Say I’m 40 and bought a $500k home. In 10 years, the home has appreciated 100% to $1M. When I go to buy a bigger home, the home that was $1M when I was 40 is now $2M. Alternatively, I’m 40 and bought a $500k home. In 10 years, the home has depreciated 20% to $400k. When I go to buy a bigger home, the home that was $1M when I was 40 is now $800k. Aren’t I better off when homes don’t appreciate? Of course, the equation changes if I own 10 homes or I don’t plan to upgrade. It's good when you are planning on downsizing in retirement and/or moving to a lower COL loca...
by emlowe
Wed Aug 19, 2020 5:41 pm
Forum: Personal Investments
Topic: Over-allocated (70%) to well performing company stock
Replies: 33
Views: 2466

Re: Over-allocated (70%) to well performing company stock

jarjarM wrote: Wed Aug 19, 2020 5:15 pm Maybe your partner should read about GTAT. I was reminded of the company in another thread. A lifetime ago, I worked for a company that was later acquired by GTAT before the whole Apple fiasco, so I have many former co-workers who were burned by the company. A sad story of single stock concentrated risk.

https://web.archive.org/web/20170415110 ... 9/page-499

Figure out your tax situation and slowly bleed away your concentration on the stock of the company that also pays your salary (too much egg in one basket).
Oy vey, reading that is very sad... A shorter version:

https://www.joshuakennon.com/gt-advance ... ankruptcy/
by emlowe
Wed Aug 19, 2020 12:58 pm
Forum: Personal Investments
Topic: Max the HSA?
Replies: 28
Views: 4081

Re: Max the HSA?

One of the aspects that makes this work out is that there is no time limit to reimburse yourself any qualified expense incurred.

So you can incur a qualified expense today, pay it out of pocket - and 30 years later you can withdraw tax-free from the HSA to reimburse yourself.

So this makes getting the triple-tax advantage easier, but keeping records for a long time is required.
by emlowe
Tue Aug 18, 2020 7:36 pm
Forum: Personal Finance (Not Investing)
Topic: Will I have any issue with I bonds as emergency fund?
Replies: 47
Views: 4923

Re: Will I have any issue with I bonds as emergency fund?

You can use Tampermonkey and a script to remove the readonly attribute on the password field thereby letting paste work (and various password managers)

In my experience, Lastpass doesn't work with TD without this kind of script.

1Password possibly have written a specific workaround for TD that Lastpass doesn't have.

In any event, I think I-Bonds are a great e-fund. And recently there was some interesting news that inflation in July was surprisingly robust (0.6% or something) - meaning that the I-Bond inflation rate may actually be positive when reset in November
by emlowe
Wed Aug 12, 2020 12:42 pm
Forum: Personal Investments
Topic: Assets going from 600K->15M, should I change my asset allocation?
Replies: 176
Views: 22182

Re: Assets going from 600K->15M, should I change my asset allocation?

The “tax-efficient” Vanguard funds you refer to will have the OP writing $100k+ checks to the US Treasury every year. Why is that? If you are talking about his gains from those investments then he made gains and will pay taxes on gain. So how will he go broke? His principal is not being taxed. Total Stock Market generates 1.7% dividend return per year Total Bond Market generates 1.1% interest return. Total International generates 2.4% dividend return. 2% distribution return on $15M is $300k. 33% tax rate (20% Fed + 9.3% State + 3.8% NIIT) on that is $100k. You realize after you write this check you still have 200k in your bank account and the principal remains invested. Now, I'm sure there are more tax efficient methods, but the notion tha...
by emlowe
Tue Aug 11, 2020 3:57 pm
Forum: Personal Investments
Topic: For Alan S and others 2020 Covid-19 RMD
Replies: 17
Views: 1003

Re: For Alan S and others 2020 Covid-19 RMD

EE Bonds in 1991,92,93 - won't they stop paying in 2021, 2022, and 2023?

At which point the tax will be due.
by emlowe
Tue Aug 11, 2020 1:16 am
Forum: Personal Investments
Topic: Reinvesting 1M AAPL
Replies: 36
Views: 5195

Re: Reinvesting 1M AAPL

Apple has a high probability of offering the mega back door Roth in the 401(k) as well (pretty common in tech companies in general)
by emlowe
Mon Aug 10, 2020 9:08 pm
Forum: Personal Investments
Topic: I bonds for 2020
Replies: 17
Views: 2684

Re: I bonds for 2020

I would have to say the limit is in place because Savings Bonds (both I and EE) are pretty darn good deals. In the current rate environment, the 3.5% return of EE bonds (given you hold for the full 20 years) is tough to beat. And I-Bonds behave better than TIPS (IMO) during this time as well (you always buy at par, you will get par returned, and they never pay below 0). I think in almost all cases, I-Bonds are better than TIPS - but particularly now You can create X number of trusts. However, each of these has its own TreasuryDirect account - which means you need to manage it separately, separate login, transfer funds separately. etc. I suspect most people get frustrated with one account let alone 10. (You cannot transfer the bonds in order...
by emlowe
Mon Aug 10, 2020 2:56 pm
Forum: Personal Investments
Topic: Donating ESPP shares directly to DAF?
Replies: 2
Views: 486

Re: Donating ESPP shares directly to DAF?

You would get a tax deduction of the FMV of the stock - but you have to hold it at least one year from the purchase.

Note, this may still be a disqualifying disposition because that rule is more than one year after the date of transfer, AND more than two years after the date the options were granted.

So depending on when your ESPP period started, you may have to hold the stock for longer than one year to become an ESPP qualifying disposition.
by emlowe
Mon Aug 10, 2020 2:49 pm
Forum: Personal Investments
Topic: Donating ESPP shares directly to DAF?
Replies: 2
Views: 486

Re: Donating ESPP shares directly to DAF?

You are unlikely to be able to donate disqualifying shares - generally, those are locked into your captive broker. AFAIK.

For a disqualifying disposition, your compensation income will be $115 (the FMV of the stock at the end of the purchase period is $200 and your purcahse price was $85) and your basis in the stock becomes $200.

When you donate the stock, this becomes a disqualifying disposition - in this case, your compensation income will be $115 (this will be on your W2), and your basis is increased by this compensation to $200 - so you effect you are donating shares with that have 0 gains.
by emlowe
Sun Aug 09, 2020 7:01 pm
Forum: Personal Investments
Topic: I bonds for 2020
Replies: 17
Views: 2684

Re: I bonds for 2020

Originally the source for this was provided as 31 CFR 359.59 - which stated the limit was per "name AND TIN" - note the and . A trust has a different name and therefore would have a different limit. As well as the definition of a person. (https://www.bogleheads.org/forum/viewtopic.php?t=77395) This CFR 359.59 has been removed and reserved (76 FR 66856, Oct. 28, 2011) I am far from an expert - I think the current regulation is 31 CFR 363 Among other things, this defines a person as Person means an individual or an entity . And an entity as Entity means any owner of a TreasuryDirect account that is not an individual . Therefore the trust entity is considered a different person, regardless of the SSN, and this person has their own li...
by emlowe
Wed Aug 05, 2020 3:16 pm
Forum: Personal Investments
Topic: Do I need to go through my employer's selected HSA?
Replies: 12
Views: 535

Re: Do I need to go through my employer's selected HSA?

Generally, your pre-tax contributions taken directly from your paycheck have to go to your companies HSA provider, as will, of course, any company direct contribution However, you can do a partial trustee-to-trustee transfer to your own HSA at Fidelity (Fidelity has one of the best HSA because it is completely free of any fees) Typically this involves some paperwork you need to fill out and send into your current provider. Note, this is not doing a "rollover", this is a trustee-to-trustee transfer, and you can do as many as you want. Depending somewhat on your current provider. Oh I see. In the first example you are basically describing a 401K like process but through an HSA correct? If I don't like my employer's HSA I can do a t...
by emlowe
Wed Aug 05, 2020 2:53 pm
Forum: Personal Investments
Topic: Do I need to go through my employer's selected HSA?
Replies: 12
Views: 535

Re: Do I need to go through my employer's selected HSA?

Generally, your pre-tax contributions taken directly from your paycheck have to go to your companies HSA provider, as will, of course, any company direct contribution

However, you can do a partial trustee-to-trustee transfer to your own HSA at Fidelity (Fidelity has one of the best HSA because it is completely free of any fees)

Typically this involves some paperwork you need to fill out and send into your current provider. Note, this is not doing a "rollover", this is a trustee-to-trustee transfer, and you can do as many as you want. Depending somewhat on your current provider.
by emlowe
Sat Aug 01, 2020 3:27 pm
Forum: Personal Investments
Topic: TreasuryDirect scammed me? :-)
Replies: 30
Views: 4891

Re: TreasuryDirect scammed me? :-)

Actually the I-Bond inflation rate will likely be very negative when reset in October - however, the composite rate can never go below 0
by emlowe
Sat Aug 01, 2020 1:45 pm
Forum: Personal Investments
Topic: TreasuryDirect scammed me? :-)
Replies: 30
Views: 4891

Re: TreasuryDirect scammed me? :-)


What are I bonds offering? I think those might have been a better deal right now.
If you bought I-Bonds today (anytime from today until Oct 2020), the fixed rate is 0% and the composite rate is 1.06% for 6 months after issue. The inflation rate of 1.06 (annualized) was set in May as a result of the change in CPI from Nov 2019 to Mar 2020.

It would not be surprising to see the inflation rate get reset to 0 in October

You always purchase I-Bonds at par and you will always get at least that par back at redemption.
by emlowe
Wed Jul 22, 2020 11:05 pm
Forum: Personal Investments
Topic: What's next after maxing out all tax-advantaged accounts?
Replies: 23
Views: 2196

Re: What's next after maxing out all tax-advantaged accounts?

Back to OP's question - I will third (or fourth) the suggestion of I-Bonds.
by emlowe
Wed Jul 22, 2020 10:57 pm
Forum: Personal Investments
Topic: What's next after maxing out all tax-advantaged accounts?
Replies: 23
Views: 2196

Re: What's next after maxing out all tax-advantaged accounts?

Well not really. Depends on tax situation and future plans. In what scenario is it not better? I'll take tax-advantaged growth over not most days of the week. :D 1. Taxable accounts are taxed at a lower (depending on your tax rate) capital gains rate (can actually be NO TAX if bracket is low enough). 2. taxable accounts are stepped up when you die and they are inherited and there are no goofy RMDs. 3. Taxable accounts don't have penalties to withdraw before 55 or 59 1/2. to name a couple... 1) Pretty tricky to get a lower rate than the 0 tax rate from the after-tax funded Roth. 2) This is IMO the only real advantage - it's better for your heirs 3) You can withdraw your own contributions anytime, so this only applies to earnings << 2) This ...
by emlowe
Wed Jul 22, 2020 10:16 pm
Forum: Personal Investments
Topic: What's next after maxing out all tax-advantaged accounts?
Replies: 23
Views: 2196

Re: What's next after maxing out all tax-advantaged accounts?

Can you do a megabackdoor Roth IRA? That's much better than a taxable account if so. Well not really. Depends on tax situation and future plans. In what scenario is it not better? I'll take tax-advantaged growth over not most days of the week. :D 1. Taxable accounts are taxed at a lower (depending on your tax rate) capital gains rate (can actually be NO TAX if bracket is low enough). 2. taxable accounts are stepped up when you die and they are inherited and there are no goofy RMDs. 3. Taxable accounts don't have penalties to withdraw before 55 or 59 1/2. to name a couple... 1) Pretty tricky to get a lower rate than the 0 tax rate from the after-tax funded Roth. 2) This is IMO the only real advantage - it's better for your heirs 3) You can ...
by emlowe
Wed Jul 22, 2020 5:20 pm
Forum: Personal Investments
Topic: Help with ESPP
Replies: 24
Views: 1353

Re: Help with ESPP

stocknoob4111 wrote: Wed Jul 22, 2020 5:05 pm Thanks, one hypothetical question - from the material I am reading the ESPP is funded through periodic payroll deductions. So, what exactly happens if you leave the company or get laid off in the interim. That money is refunded to you or is it deposited as cash in your brokerage account?
It may be company/plan specific, but in my experience, it is refunded to you in your last paycheck