Bogleheads.org

I have the ftse large cap ex-us and ftse small cap ex us vanguard funds only in my taxable account. I think yielding roughly 3%. How would you rank these non us funds ? I’m debating how good they are as although I paid $2k + in foreign tax, I only seem to get credit for $400 :( If you are running into a limitation on the foreign tax credit, then foreign funds are tax-inefficient for you, and it is better to hold US stock funds in a taxable account. Last year, FTSE Ex-US Small-Cap Index (VSS) was extremely tax-efficient if you got the full credit, because 16% of the dividend was withheld as foreign tax. However, this is not typical; 8% is a more normal portion of international dividends to be withheld as foreign tax. At that tax rate, US an...

rosemary11 wrote: ↑Thu Mar 23, 2023 4:53 pm The simplest AA to achive constant 60 percent stocks 40 percent fixed G
Now
60 percent. L2065
40 percent G fund

Sometime after 10 yrs
60 percent L 2075 or 2080
40 percent G fund

However, this will need to be rebalanced regularly, which L funds do not need. If the stock market loses 1/3 of its value (as it did in March 2020), the 60/40 allocation will become 50/50 and you will need to sell the G fund and buy a stock fund to get the full benefit from any recovery.

The “tax cost ratio” of the tax managed balanced fund (VTFMX) is substantially less than that of Wellesley (the other fund you list). This is because Wellesley focuses on dividend stocks and taxable bonds, both of which are less than ideal for a taxable account. Tax cost ratio is not the right measure here. The tax cost of a fund is the difference between pre-tax and after-tax returns, so it is zero for municipal bonds. However, municipal bonds have a cost for avoiding the tax, as they yield less than taxable bonds of comparable risk. My rule of thumb is that the tax cost of munis is 1/3 of the yield (and thus muni and taxable bonds break even at a 25% tax rate.) And as a separate issue, the published tax costs assume the highest federal t...

In the case of a money-market fund, those assets are Treasury bills, which do not lose value. A shareholder with $1M in assets can withdraw them by requiring the fund to sell 1/1000 of its Treasury bills, which can be sold for face value and will thus give the shareholder $1M. This is false and misleading. The NAV of the fund is the NAV of the fund. T-bills are priced at a discount and if sold would be sold at that discount, not par. T-bills routinely lose money over the short term. Well, the very short term. You can’t force a fund to sell above the limits in the prospects. I have worked besides the mutual fund trading desk where the can say no to large or late trades. You maybe could argue for a in-kind distribution but those are not easy...

You have to check the tax rules for various benefits. Many tax benefits are based on "modified AGI", and which modifications you make depends on the specific benefit.

For example, IRA contribution limits do not count tax-exempt income, while the phase-in of Social Security taxation does count it.

Most taxpayers who are considering muni bonds are in too high a tax bracket to benefit from any of the AGI-based provisions. However, munis are attractive even in the 22% bracket if you hold bonds in a taxable account and there is a low-cost muni fund for your high-tax state.

The difference between a mutual fund and a bank is that the mutual fund owners have a claim on specific assets, while the bank depositors have a claim only on the general assets of the bank. If a bank has $1B in deposits, it doesn't have $1B in cash, but a depositor with $1M has the right to receive $1M in cash at any time. If a mutual fund has $1B in assets, it owns securities which are currently worth $1B, but the shareholders only have a claim on the value of those assets when they withdraw the assets. A shareholder with $1M in the mutual fund has a right to 1/1000 of the assets of the fund. In the case of a money-market fund, those assets are Treasury bills, which do not lose value. A shareholder with $1M in assets can withdraw them by ...

* Due to advantage of lower standard deduction and claim medical deductions, they will file MFS (Married Filing Separately) what do you mean by this? obviously you're itemizing if it's more advantageous than taking the standard deduction but if you itemize for one and file MFS you have to itemize for the other. That could wind up with a much lower deduction for the one who isn't claiming the medical expenses. However, you can still come out ahead if one person pays all the medical expenses. Suppose that each spouse earns $100K, and the medical expenses are $15K. Since that is 7.5% of their $200K AGI, there is no medical deduction. Now suppose they file separately, and one spouse pays the full $15K. That spouse gets to deduct $7500 for medi...

Do they actually have zero AR income? If they received dividends or bank interest after the day they changed residency, that income would be taxable to AR (and not to NY). It appears that in AR, as in most states, part-year residents must file state taxes if they have even $1 of AR income while a resident.

Here's an example of the benefit. I have been buying Emerging Markets Index ever since 2002. Emerging markets had a great run from 2002-2007, so much that I almost needed to sell the fund to rebalance. Then, when the market crashed in 2008, I had gains on shares bought in 2002-2004 and losses on shares bought in 2005-2008. With average cost, I could not have sold for a capital loss. With specific identification, I sold the shares with losses, taking a large capital loss. Every year since 2008, I have had a $3000 capital loss to deduct against ordinary income, which is worth $966 per year to me in my 32.2% combined federal and state tax bracket. I also had to sell stock in 2013 at a market peak, and had capital loss carryovers to offset the ...

retiredjg wrote: ↑Mon Mar 20, 2023 7:46 am Vanguard Tax Managed Balanced fund is the only balanced fund I would consider for a taxable account in the 35% tax bracket.

Agreed. For this purpose, it is the right single fund assuming that its allocation of 49% stock is appropriate.

And for this purpose, it avoids my usual criticism of this fund. If you have a balanced fund and want to sell bonds (to hold fewer bonds, or a different type of bonds, or bonds in a different account), then you have to sell stocks at the same time and likely pay capital-gains tax. But the in-law is not likely to need to sell the bonds, and the heirs can switch to a different fund when they inherit it.

Mike Scott wrote: ↑Tue Mar 21, 2023 5:05 pm Vanguard has a 50/50 Tax Managed Balanced Fund you might add to your list.

This probably isn't the right fund in a 24% bracket; the munis are taxable in NY. (In a higher bracket, it is a good one-fund portfolio if its 49% stock allocation is right for you.)

If she is willing to hold separate stock and bond funds, she could hold NY munis, but non-NY munis likely don't do any better than taxable bonds of the same risk level.

As a single fund for simplicity, I would prefer LifeStrategy Moderate Growth, which includes international stocks as well as US stocks. The tax cost is about the same as Balanced Index, but the portfolio is better diversified.

If there were no expected premium to earn from small cap value, would you still hold it above the market weight? If the true answer for your case is yes, then tilt; if not, then do not tilt. I wouldn't word it quite that way. If the only premium for small-cap value is a compensation for the additional risk, would you hold it above the market weight? Small-cap stocks are known to be riskier than large-cap stocks, and thus even in an efficient market, investors would only buy them if they expect higher returns. If that is the only benefit, you might still decide to overweight. I have a reasonable tolerance for risk because of my long horizon. If the risk of US SCV benefits from a longer horizon, then I will overweight. I do the same. I have ...

The ironic thing is that people generally want their taxable accounts to give off LESS dividends to protect from dividend tax drag every year. I want taxable dividends to make up my non-discretionary spend when i retire. Let's see if i can get close. Who knows - currently around $20k a year, $40k a year would be great imo. It's still better to do this with lower dividends. Suppose that you have $1M of stock and you want to withdraw $40K a year from that portfolio, and you pay 15% tax on qualified dividends and capital gains. If your stock has a 4% dividend yield, you have a $40K dividend and pay $6K in tax. If your stock has a 2% dividend yield, you have a $20K dividend and must sell $20K of stock. If that $20K in stock was bought for $10K...

If you don't need to spend the money from the inherited IRA, it should be part of your overall asset allocation. In particular, if you withdraw $X from the inherited IRA and contribute $X to your 401(k), the fact that it was an inherited IRA is irrelevant, as the money stayed tax-deferred. If you are maxing out tax-favored accounts and have to withdraw from the inherited IRA to invest in taxable, then it is better to hold bonds in the inherited IRA to minimize the tax cost. Now, if you have an RMD of $X, you take that RMD from the bond fund, buy $X of stock with it for tax efficiency, and move $X from stock to bonds in some tax-advantaged account if you want to keep the same asset allocation. The reason this minimizes the tax cost is that t...

Choosing to put some of your emergency fund in VCLAX is one thing, but unless your 457b is less than your desired bond allocation I would not bother with bonds in taxable. While this is normally a good recommendation, I do not believe it is correct for the OP, who is in a 35% federal and 9.3% CA tax bracket. The reason is that they have a higher tax cost than other investors on a taxable account (15% or 20% federal + 3.8% NIIT + 9.3% CA = 27.1% or 32.1% on qualified dividends and long-term gains, and 47.1% on any non-qualified dividends), but no more tax cost than anyone else on CA munis. (The tax cost of munis is the difference between yields of muni and taxable bonds of comparable risk). Therefore, I would recommend holding CA munis in t...

secondopinion wrote: ↑Tue Mar 21, 2023 11:03 am If there were no expected premium to earn from small cap value, would you still hold it above the market weight? If the true answer for your case is yes, then tilt; if not, then do not tilt.

I wouldn't word it quite that way. If the only premium for small-cap value is a compensation for the additional risk, would you hold it above the market weight? Small-cap stocks are known to be riskier than large-cap stocks, and thus even in an efficient market, investors would only buy them if they expect higher returns. If that is the only benefit, you might still decide to overweight.

And I also have a NaN error. I get a message that I might benefit by holding some percentage of my bonds in foreign bonds. The percentage that is currently in bonds is actually 0/0. Did you see the percentage actually rendered onscreen as "NaN?" If so, that rules out the theory that the spurious "0%" values are really NaNs. The percentage is not rendered on my screen at all, but it is being treated as if it were a number. 0% of my portfolio is in domestic bonds, and 0% is in foreign bonds. Therefore, the actual percentage of my bonds which are foreign is NaN. And according to the IEEE standard, any comparison with NaN is false; in particular, it is not less than whatever Vanguard considers the minimum foreign bond alloc...

TSP G Fund yield right now is 4.125% annualized Inflation is 6% through Feb 2023. So negative real return of 1.875% at least for the time being. Safety comes at a cost. While it does come at a cost, this is not a fair comparison, because inflation is backward-looking and bond yields are forward-looking. Investors do not expect inflation for the next year to be 6%. The current yield on a one-year Treasury bond is 4.33%, and on a one-year TIPS is 1.70%, so investors are expecting about 2.63% inflation over the next year. But the cost of getting safety (whether in the G fund or in some other bond fund) is a good reason for getting as much risk reduction per low-risk dollar as possible. You can do this in the G fund without sacrificing as much...

I found the same errors. My REIT Index is 100% uncategorized (rather than being in the real estate sector), and neither Total Stock Market Index nor Value Factor ETF has any holdings in Consumer Discretionary. And I also have a NaN error. I get a message that I might benefit by holding some percentage of my bonds in foreign bonds. The percentage that is currently in bonds is actually 0/0. (I do hold bonds, but I hold them in a non-Vanguard employer plan, so Portfolio Analysis doesn't see them.) If Portfolio Analysis is working correctly, its messages are useful. They indicate deviations from the model portfolio, which are OK in your own portfolio if you do them deliberately. Thus, Portfolio Watch tells me correctly that I overweight real es...

Which version of TIAA Traditional do you have? If you have the version that can only be liquidated in 10 annual payments, then you effectively have a fund with a 4.5-year duration. If rates rise, you don't immediately lose money, but the yield will not rise quite as fast, so you may earn less than the market rate. If you want to sell the fund, you still have to keep earning the old, lower rate on the portion you haven't sold, and the full sale takes nine years.

In return for this loss of the ability to liquidate quickly, you gain the benefit of a higher interest rate than on other flavors of the fund. You cannot use the fund for short-term cash needs, but it is one of the best fixed-income options around.

Actually, since I posted, I decided, for now, I will only stick to tilting to US small-cap value. So 56% US TSM, 14% AVUV, 30% International TSM. I try to hold international and international SCV in my tax-as any accounts because of the higher dividends, but that optimization depends completely on your tax rates Do you mean US and international SCV in tax-as any accounts? Just to clarify. I am leaning towards putting AVUV in both taxable and tax advantaged. I think AVUV is pretty tax efficient, so, fine for taxable. I keep more of my IXUS/VXUS, VWO, and AVDV in tax-deferred. I keep some additional IXUS in taxable to meet my target allocation If you are interested in overweighting small-cap value, particularly in a taxable account, factor f...

If the non-covered shares with unknown basis have capital gains, you can avoid the problem of not knowing the gain amount by donating them to charity. (Don't do this just for the tax advantage, but if you do want to make a large donation to charity, using shares on which you would have large capital gains gives a further tax benefit.)

...muni funds never have capital gains. This isn't true in general, is it? Apparently the Vanguard High Yield Tax-Exempt Fund distributed capital gains in 2021 https://investor.vanguard.com/investment-products/mutual-funds/profile/vwahx#distributions I'm surprised that I wrote this; I probably meant that they seem to have avoided capital gains recently despite the falling rates. In fact, Vanguard NJ Long-Term Tax-Exempt itself has distributed some capital gains, as its 10-year after-tax return is 0.12% lower than its 10-year pre-tax return. This indicates an average capital gain of 0.60% of the fund value (assuming that the gain is always long-term and thus taxed at 20%). While muni funds should try to avoid capital gains (since their inve...

I live in NJ and do keep significant amount of cash in my brokerage account in the Vanguard Treasury Money Market to minimize our NJ State Tax Obligation. We also use the Vanguard Limited Term Tax Exempt and Intermediate Term Tax Exempt funds as well which do owe NJ taxes on, but are Federally tax exempt. These funds are for shorter term goals (4-8 years). Rather than Intermediate-Term Tax-Exempt, you might use a 50/50 split of Limited-Term Tax-Exempt and NJ Long-Term Tax-Exempt. This would have the same duration as Intermediate-Term Tax-Exempt, but more than half the income would be exempt from NJ tax, as would most of the capital gains since I believe NJ Long-Term Tax-Exempt is a NJ qualified investment fund. If tax efficiency was my ult...

greybus wrote: ↑Sat Mar 18, 2023 5:39 pm I believe VGIT and GOVT are treasury ETFs so their dividends (and capital gains?) should be tax exempt for state taxes right?

Dividends are state tax-exempt. Capital gains on Treasuries are usually state-taxable; NJ is the only state I know in which they are not taxed.

The wiki is back up for me; I just edited it with no problems.

And the wiki is usually giving 503 errors (Service unavailable); I once got the text of the home page but not most of the images.

I have been told that the yield you should get from a bond fund would be the yield you get when buying the fund. Which yield should I look at: SEC yield or distribution yield or yield to maturity? Is this expected yield over the duration of the fund or over the long term, longer than the duration? The SEC yield is the number you want. For non-callable bonds such as Treasuries, the SEC yield will be the yield to maturity minus expenses. The SEC yield published by a fund is likely to be closer to current. (Even the SEC yield is not quite current because it is an average over 30 days; current SEC yields do not fully reflect the rapid drop in yields in the last week.) If the yields on the bonds in a fund do not change, you will earn the SEC yi...

Eno Deb wrote: ↑Thu Jan 12, 2023 12:51 pm

123 wrote: ↑Mon Jan 09, 2023 12:59 pm

hoofaman wrote: ↑Mon Jan 09, 2023 12:35 pm ...Would each option provide the state tax exception in 1099?

Yes.

From my experience that is not the case. Funds like VGSH pay a monthly dividend, and all or a large portion of that is state-tax exempt. But the brokerage doesn't necessarily know how big the portion is, so it does not show up in the 1099-DIV. It is the responsibility of the tax payer to determine and exclude the exempt portion from the state tax return.

The information is available from the fund provider. At Vanguard, for example, Vanguard funds that held U.S. government bonds (i.e., government obligations) (PDF)

OP, you should check the current yield and the yield to maturity. The current yield can be calculated by dividing the monthly payouts by the fund share price. You will find it is closer to 5.8% than 7+%. Some will say the fund earns the 7% yield to maturity when it sells bonds; however, with an inverted yield curve, the shorter-term bonds sold by the fund may require a higher yield-to-maturity than the longer-term bonds they purchase. But that would be just as much the case if the fund was paying out the same amount as the dividend yield. If the yield on a bond increases between today and the day the fund sells the bond, your total return on the bond will be less than the yield to maturity. If the bond is currently at par (distribution yie...

This fund should only be held in an IRA, because the high dividend yields are taxable at your full tax rate. (And, even worse, the dividend yield is more than the expected return, since you will lose capital when some bonds default or are sold after downgrades.) In an IRA, it's fine to hold this fund, but you should recognize that it behaves like half bonds and half stocks, not like other bond funds. In an economic decline, the stock market falls, and bond defaults become more common, so junk-bond funds lose value as well. The current situation shouldn't really affect your investment decisions. High-yield bond funds have more risk than investment-grade bond funds, but the yield is a fair compensation for the risk. If the risk increases, the...

Check your other funds as well. Many funds, even stock funds, hold a small amount in Treasury bills, and thus some of the dividends may be exempt from state tax in most states. (Some states have a rule that a fund must be 50% invested in securities exempt from state tax to get a partial exemption.)

Reminder and disclaimer: I am not your tax advisor and thus you cannot treat anything on this forum as tax advice. I am just an investor trying to read and follow the directions on the tax form, and it looks like your tax preparer made a mistake somewhere and should fix it. Thank you. This may explain the low credit. If much of that income was from qualified dividends and long-term gains, your total tax could be very low. (See below where I show that $1741 total tax before credits would give a credit of $313.) 3a Qualified Dividends: $36,600 That would make your total tax very low. In fact, if the foreign capital gain was long-term, your tax should have been $120. In 2020, a single taxpayer paid no tax on qualified dividends and long-term c...

In 2020, my Total Income and AGI was $54,600. My Taxable Income was $40,800. Line 20 of my Form 1040 (Amount from Schedule 3, line 7) shows $313, which I see on Schedule 3. This may explain the low credit. If much of that income was from qualified dividends and long-term gains, your total tax could be very low. (See below where I show that $1741 total tax before credits would give a credit of $313.) In my 2020 tax return, there is a two-page Form 1116. On page 1 Part 1, Taxable Income or Losses From Sources Outside the United States, it shows my $9,788 long-term capital gain on the sale (and a $29 dividend from a mutual fund). On page 1 Part II, Foreign Taxes Paid or Accrued, it shows the $3,600 (Paid). On page 2 Part III, Figuring The Cre...

cchrissyy wrote: ↑Tue Mar 14, 2023 2:00 pm

The total is around $170 throughout 2021. Federal tax due is around $110 and state tax due is around $7.

that % seems highly unlikely

It could happen if some tax benefits phase out, most likely the Earned Income Credit, although that alone wouldn't suffice; adding $170 of income when you are in the EIC phase-out would decrease your EIC by $32 or $42 depending on whether it rounds to $150 or $200. Even adding self-employment tax plus income tax on $170 doesn't make the total $110.

In 2020, I sold a property overseas and had a $9,788 long-term capital gain. I paid a $3,600 capital gain tax in the country the property was sold. I see that the tax preparer put the long-term capital gain in my 2020 tax return on Form 8949. On Form 1116, I see in Part II "Foreign Taxes Paid or Accrued" the $3,600. Going all the way to the bottom of page 2 on Form 1116, based on my tax return, the "maximum amount of credit" that I was able to use was $313. That credit seems unusually low. The foreign tax credit is limited to your US tax, times the share of your taxable income which is foreign (with some adjustments). Thus the credit would only be that low if your total US tax was around 3% of your taxable income. If yo...

Lost 401(k) or IRA space is permanently lost, since you can't invest more than the maximum in a future year. If you have to make taxable investments in a future year, you'll probably lose about 40% of the invested amount to taxes if you retire in NYC, or 30% if you retire in a no-tax state. (This cost is unusually high because you pay a very high state tax on dividends and capital gains while you live in NYC.) Thus, mathematically, if you can pay off the credit cards in one year, it is worth maxing out the 401(k) and IRA. If it will take more than one year, the 40% lost to credit-card interest is more than the benefit of 401(k) investing; invest only enough to get the employer match. But that is mathematical; will you actually pay off the c...

No matter what tax software you use I think you're going to have to fill out Form 1116 by hand to check, as it seems none of them handle it correctly if you are itemizing deductions and had to adjust your foreign source income for qualified dividends due to being in a 32% or higher tax bracket. In particular any non-zero amount on line 2 (or also line 3b by the way) of 1116 is an immediate paper filing if you're using H&R Block (desktop version, don't know about online). If you follow the directions on page 27 of Publication 514 (https://www.irs.gov/pub/irs-pdf/p514.pdf) you might have to make an entry on line 2 for your state income tax. And the state income tax is something that the tax software cannot get right, which forces you to ...

I didn't know what to expect before I wrote the program and was very surprised to find that the best way to cut off the left-hand tail risk for a lot of moderate-income and -asset couples, assuming they were in good health, was to buy 20-year term at ages below 65. That's because the biggest risk to a surviving spouse is the loss of the lesser Social Security payment early in retirement. What assumptions are you making about the fraction of their income coming from SS? For example, for a married couple with equal benefits, both claiming at the same age, with half their retirement spending coming from SS and half from investments, the death of one spouse would reduce the income by 25%. (If the SS benefits are unequal, the loss would be even...

Thanks! I also read your 2022 thread. Are DFSV and DISV more suitable for a taxable account despite the ER? DISV is 100% qualified whereas AVDV is more like 70-80%. The dimensional small cap yield have been about half of their avantis counterparts. The foreign source income factor for DISV of 0.7196, indicates 71% of the dividend is foreign taxes paid no? Div comparison so far AVUV vs DFSV dividend yield / AVDV vs DISV dividend yield . I don't like trying to project dividends from a fund's first year. In particular, when a fund is growing rapidly, the dividend yield of the fund will be less than the dividend yield of the stocks it holds, because the yield is based on the fund value on the record date, while the dividends were received when...

Unlike doctors, dentists tend not to have too much of an in-network discount. Thus, unless you are using a service with a substantial insurance benefit (such as a crown or implant), it doesn't matter much whether the dentist is in-network.

My medical insurance provides for free checkups, cleanings, and X-rays. My dentist isn't in-network, so the insurance covers only up to its allowance. However, they usually charge about the insurance allowance; I have had a few years with $5 of uncovered bills.

I am active in a local Volksmarching club (see https://ava.org/ for more information). A Volksmarch is a non-competitive walk, usually 5K/10K options, on a route chosen by the local club. There are organized events in which the club maintains a registration desk for a day, and year-round events in which the club recommends a route and a registration box but you can walk at any time. The local clubs know their areas, so they can choose an interesting route, such as along a river or through the historic district of town. Single-day events often coincide with events in town; fall walks often end at an Oktoberfest. The AVA provides books for tracking your progress, and award patches or pins. I also live in a city which is very good for walking ...

I agree with the other posters. Keep the QQQ intact to avoid capital-gains tax; you could balance its growth bias by making an equal amount of other investments in a value fund. (If you have an IRA, it's better to hold the value fund there rather than in the trust, because value funds have more taxable dividends than blend funds.)

Often, a good way to get rid of a highly appreciated fund that you don't want to keep is to donate it to charity, but the trust restrictions will probably prevent that until the trust is liquidated.

If you expect to retire at a higher marginal tax rate, then it does make sense to contribute to Roth rather than traditional, and to contribute traditional accounts to Roth accounts up to the top of the current tax bracket.

However, you should still contribute to the SEP-IRA in preference to taxable investing. You get the benefit of tax deferral, which is much more valuable than any possible small tax difference.

Therefore, I don't recommend selling any stock for a significant capital gain to increase the down payment. Selling the I-Bonds (unless you have old ones with a yield of 1% or higher) and EE-Bonds may make sense, as may selling any stock that does not have a significant capital gain. I see what you mean. Given that all stock gains are over 25%, it makes more sense to sell these first: $30K EE bonds that are tax deferred at 2% $135K in I-bonds with 0-0.4% fixed component (purchased every year since 2017) Yes, this makes sense. You might also take some stock gains if you have carryover losses to offset them. You can then take out a 15-year mortgage, probably at 6%. And once you have that mortgage, paying it down is a risk-free 6% return. The...

zero_coupon wrote: ↑Sun Mar 12, 2023 4:10 pm Thanks for the analysis, everyone.

grabiner wrote: ↑Sun Mar 12, 2023 1:24 pm Limited-Term Tax-Exempt: 3.08%

iim7V7IM7 wrote: ↑Sun Mar 12, 2023 1:28 pm Vanguard Limited Term Tax Exempt has a 2.7% yield.

Is the apparent discrepancy due to SEC vs distribution yield? What yield should we expect from this fund over the next year?

It's probably a difference in dates. Morningstar says that the trailing distribution yield is only 1.80%.

Even the 3.08% is not quite correct. It is the yield on Vanguard's fund listing page, but it is the yield as of March 9; the March 10 yield is 3.09%.

The headline is a bit misleading. 95% of the dollar amount is at Vanguard, but that is because the one commissioner who has far more money than any other commissioner has 95% of his investments at Vanguard. Three of the other five have investment portfolios split across multiple firms (including Vanguard), and the fifth reported no investments other than in 529 plans.

You are correct about the interest payments, but it still seems like a lot to distribute. Because we had unexpected inflation, so the principal adjustment gets distributed, too. If you don't want that behavior, you should hold individuals TIPS instead of a fund. If you hold individual TIPS, you still pay tax on the inflation adjustment, although you don't receive it as a dividend; it increases the principal value. Doesn't a fund get the principal adjustment before maturity by selling individual TIPS? A TIPS fund is a rolling ladder so it's constantly selling old TIPS and buying new. The fund is required to distribute the principal adjustment as a dividend, regardless of what it does with buying and selling bonds. Selling bonds can create a...

Thank you in advance. See this thread: https://www.bogleheads.org/forum/viewtopic.php?t=377188 It's been tracking differences in money market funds for a while. Regards, Thanks for the reference. I read somewhere that short muni yields are relatively bad right now (compared to taxable instruments of equal duration). Is this true? This does appear to be the case. Yields on Admiral shares of Vanguard funds: Limited-Term Tax-Exempt: 3.08% Short-Term Bond Index: 4.77% (same duration, 2.6 years) Intermediate-Term Tax-Exempt: 3.30% Intermediate-Term Bond Index: 4.54% (longer duration, 6.2 years versus 4.6) The muni yield curve is usually steeper than the taxable bond yield curve, because most munis are callable, and the callability increases the...

watchnerd wrote: ↑Sun Mar 12, 2023 11:52 am

JerryB wrote: ↑Sun Mar 12, 2023 11:48 am You are correct about the interest payments, but it still seems like a lot to distribute.

Because we had unexpected inflation, so the principal adjustment gets distributed, too.

If you don't want that behavior, you should hold individuals TIPS instead of a fund.

If you hold individual TIPS, you still pay tax on the inflation adjustment, although you don't receive it as a dividend; it increases the principal value.