Bogleheads.org

I wanted to point out that you can have HSA investments in a Schwab account. Due to the TD purchase, Lively HSA accounts can now be invested via Schwab.

I've had a good experience with lively.

I'm not trying to say that this setup is good compared to Fido, but you can more or less have a Schwab/lively HSA.

https://livelyme.com/features/invest-your-lively-hsa/

About 6 weeks ago, I opened an HSA account at Fidelity and submitted a request that they transfer all of the funds from my Optum Bank HSA into my new account. .... My story is transferring an HSA account from Optum Bank to Lively took about 9 months. It would have been longer if I had not filed a complaint with the FDIC. I would suggest doing this as it takes a few weeks for a complaint to move thru the process. When it got to Optum, they assigned a manager to resolve my problems ... which then happened in days. Optum service reps could be rude or nice ... but they never really could address the issue. You can look up your bank regulator at the following link. I pre-filled for Optum which has an FDIC number of 57408. https://banks.data.fdi...

+99 to the folks that suggested looking at your total Asset Allocation.

Do you have Bonds/Cash in ANY other account?
If so, simply put that money into stocks as you convert your stocks to cash and move it around.
This will keep you "in the market" about as much as you already are "in the market".

This is a great forum with some great thinking!

I follow the below advice with my "cash in a tax-advantaged account", but I guess "total portfolio thinking" is not my default yet.

https://www.bogleheads.org/wiki/Placing ... ed_account

I guess it depends on how much money and how long you are out of the market. I have never done this and don't really have the kind of money or worries to bother, but you can "buy insurance" at a cost. The protective call is a hedging strategy whereby the trader, who has an existing short position in the underlying security, buys call options to guard against a rise in the price of that security. AKA ... the risk is being out of the market in cash is that the market goes up. You can buy call options (at a cost) for a small fraction of the price of the fund/etf you are moving. I'm not recommending doing this ... but you could research it for fun. Off the top of my head I would: Use SPY calls because the prices/times would be decent ...

I had multiple HSAs for a while. 1 at my employer and 1 at Lively.

There are a few things to know like:

• making sure you don't go over limits by depositing in both
• transferring vs rollovers
• some institutions may charge fees for transfers ... my employer one did
• transfer times can be looooong ... It took me 9 months for 1 ... no kidding.

Here is a nice writeup from lively ....
https://livelyme.com/blog/hsa-transfer-vs-rollover/

As others have said ... it clearly depends on the institutions. I was testing out some accounts and found an interesting avenue moving money from TD Bank to Schwab. Push from TD Bank is 3 business days to process (presumably by TD) and limited to $3k daily and $5k monthly. This seemed to be marked as a webxfr at Schwab. Pull from Schwab can be up to $100k, but then has a 4 business day hold at Schwab (regardless of the amount). This is clearly marked as an ACH. The interesting part ... If I write a TD check (say for $10k) and then take a picture of it and electronically deposit it at Schwab, the funds are available the next day. Generally, deposited cash and checks are available on the first business day after we receive your deposit. If yo...

civility wrote: ↑ Hi, thanks for the detailed information. Can I open the Solo 401K account just with SSN or do I need any further set up to open this account?

Thanks!

My DW's solo needed a tin. It is very fast and easy to get one.

Edit... Sorry EIN.

https://sa.www4.irs.gov/modiein/individual/index.jsp

I'm struggling to understand what credits I'm going to qualify for (especially when do I max out?). My understanding is that I can claim 30% of the heat pump (up to a max of $2k) plus another 30% of various "stuff" (up to $1200). So my total credit in 2023 would be $3200. Am I missing anything? Hi frisbee $3,200 sounds correct to me. That is "possible" every year. Unfortunately, appliances do not have tax credits. Doors, windows, weatherization, and electrical panels (with heat pump) seem to qualify for the $1200. Here is a nice guide (BogleFanGal mentioned this above). It helps you make a plan, and even has a "case study" for high income folks. If you combine it with looking at the actual details in the law, ...

The IRS also has a Fact Sheet with Frequently asked questions about energy efficient home improvements and residential clean energy property credits You may want to add this to the OP. RubyTuesday, thank you ... I've added this great find to the OP. Can the tax credits here be carried forward to future years? Curmudgeon, RubyTuesday was able to find the answer from the IRS FAQ. Short answer is no to the types of credits I was researching (HVAC, doors, appliances, etc.). Yes on solar, battery backups, etc. Q4. May a taxpayer carry forward unused credits to another tax year? (added December 22, 2022) A4. The rules vary by credit. • Under the Energy Efficient Home Improvement Credit: a taxpayer may not carry the credit forward. Thus, if a tax...

Apathizer wrote: ↑Mon Jan 23, 2023 8:56 pm But we only know that in hindsight. There will always be actively managed funds and individual stocks that outperform, but the vast majority underperform.

I was trying to point out that some funds are more risky than some stocks. I don't think this is hindsight, and doesn't depend upon the actual returns.

So saying that funds are better than stocks without knowing anything about the fund or the stock just doesn't ring true to me.

I think we're all in agreement that low cost index funds are a great place to be. My favorite is VTI.

I'm even ok if people want to take absolute stands for simplicity. I'm just a depends type of guy I guess.

Taylor Larimore wrote: ↑Mon Jan 23, 2023 6:50 pm
* Holding individual stocks is much worse than owning actively managed funds (I wouldn't hold either):

BRK-A is an individual stock.
ARKK is a Cathie Wood actively managed fund.

Sorry but I couldn't resist.

https://www.bogleheads.org/wiki/Priorit ... nvestments

Read the wiki Prioritizing Accounts. Taxable is last. You just haven't had the need if you can use the other accounts. You are good.

Apathizer wrote: ↑Mon Jan 23, 2023 1:37 am The level of risk in descending order is stock-picking, active management, indexing. Before fees, many active funds perform about as well as an index.

That seems to be a reasonable generalization, but I would think it depends upon the particular stocks and funds.

My take is that the OP should get the details, make a plan, adjust for what the account holder thinks is important 1st.

Taking on the role and responsibilities of a financial advisor is not a light task. Especially for someone entering retirement with a good chunk of money. Portfolio change results are probabilities not certainties.

Short answer is that you buy 2 funds and come up with a weighted average. Weighted by market value. Then if you consume the long duration one, the avg duration will drop over time.

Edit - one fund could be cash... If your target avg is short

Longdog wrote: ↑Sun Jan 22, 2023 11:33 am Perhaps, while singing that patriotic song, you can also recall with great fondness the deduction in taxable income you took when you moved the money to the tIRA way back yonder.

Ahhh yes. It was a long tortured route. My paycheck to a 401k, and eventually rollovers to that tIRA. Thinking about those employer matches does put a smile on my face. Thanks

teen persuasion wrote: ↑Sat Jan 21, 2023 9:36 pm +1 on the limited usefulness of non-refundable tax credits to many.

Really? The top of the 10% bracket for mfj is about 2k liability, right ? I'm going to have to figure out how you folks are doing it. I've got so much of my money in that damn tIRA, I have to sing patriotic songs as I do my taxes. It at least takes the edge off

Thank you for posting and helping others make better sense of it all. I noticed income qualifications state "gross income" - any chance this could vary by state - i.e. using AGI vs gross income? Hi BogleFanGal Great question on "what is income". I was relying on the calculator link I posted. They have a FAQ on how the calculator works. here Unfortunately, the FAQ and most of the stuff I've seen about HUD are not super clear. A conservative approach would be to assume that you need to use Total Income on 1040 line 9. This is unfortunate because it takes away alot of the flexibility to control income with retirement or HSA contributions. Self employed people could still have expenses. However, I did find that under the 20...

I researched this and put together a summary of (Home improvement) rebates and tax credits available thru the Inflation Reduction Act. I used this info to make a simple spread sheet personal plan. I hope to use this to make some upgrades and save some money over the next few years. I wanted to share the info as it might help others. There is a forum discussion from a few months ago ... here . I found it a little caotic to actually use to make plans. High Level H.R.5376 - Inflation Reduction Act of 2022 provides for 2 (Home improvement) financial incentives for consumers. Rebates (up to a total of $14k available thru 9/2031), and tax credits (up to $3,200 annually from 2023 to 2032). The full text of the law is here Rebates Will be administe...

cjhud32, According to this ... After the 2-year period, you can also roll over SIMPLE IRA money into a Roth IRA, but you must include it in your income. Your employer plan may also have rules that limit withdrawals. On the tIRA - > Roth ... I think JoMoney is spot on about the value of giving it a try, giving you a few more options/ideas for an uncertain future. My personal situation: - I moved money from tIRA->Roth while I was in a higher (employed) tax bracket - This gave me some "Roth ladder" funds that I can easily access since I stopped working before (and still am not) 59.5 - I'm using ACA (health care) so Roth funds are super valuable because they are not included in MAGI ... giving me $20k yearly premium discounts - I have...

The relationship between bond yields and bond prices is not causal, it is a mathematical equivalence. Not to muddy the waters ... and I totally agree as stated, price and yield are truly in the same equation ... in a simple sense: Price = Face Value / (1+ yield) Years However, in a practical sense for a fund like BND, there are some challenges to actually calculating the price change given an expected change in yield. BND holds over 10,000 bonds The remaining term on these bonds differ in the range of 1 to 25+ years The yield on these bonds differs due to the term differences, but it is stated as an average ... and averages may not represent a population When the FED impacts rates ... this does not impact all rates (across terms) the same....

dual wrote: ↑Wed Jan 18, 2023 8:12 pm Ordinarily, in constructing it your goal would be to have four two-year bonds maturing in overlapping terms every six months.

I'm no expert but I believe 2 year bonds all mature in 2years. It is the maturity date that matters, not the issue date. Aka a 2year TBond with 6months left is priced like a 6month and referred to as a 6month.

But I'm not building a ladder... So just speculation on my part.

nedsaid wrote: ↑Wed Jan 18, 2023 1:03 pm

Sort of a reasoned panic I suppose. I am brilliant at one thing or the other, rationalization (spin) or market timing. I am probably better at spin.

BFranklin wrote:So convenient a thing it is to be a reasonable creature, since it enables one to find or make a reason for everything one has a mind to do.

So, I've been trying to understand what happened and have been reading some material from JPMorgan. .... Hence, we are currently at what is probably positive correlation and will probably remain positive for the foreseeable future. .... Learning / seeking an understanding seems to be a good thing to me. However, I would caution taking anyone's material at face value. For the case of Total Stock Market vs Total Bond Market correlation, you can do your own digging and see what really applies to your case. Here is a portfolio visualizer comparison of TSM and TBM over the past ~30 years. Just a quick look at the annual returns bar chat tells me that stocks can go down a bunch, bonds don't often go down, bonds and stock both go up most of the t...

The one-participant 401(k) plan isn't a new type of 401(k) plan. It's a traditional 401(k) plan covering a business owner with no employees, or that person and his or her spouse.

Gotta be spouse.

https://www.irs.gov/retirement-plans/on ... 401k-plans

newyorker wrote: ↑Fri Jan 06, 2023 3:59 pm

Candor wrote: ↑Fri Jan 06, 2023 3:58 pm OP, you have been making these same type of comments for 2+ years now. Is any of this (BH wisdom ) sinking in?

LOL! I will be honest. I freak out too easily

I feel the same pain. One of my kids suggested that the S&P chart of 2020 was a chart of my mood.

However, I've concluded that we get paid for the pain. No doubt from the folks who can't take the discomfort. This is likely the case in many human endeavors.

CHK was not an MLP before bankruptcy. It was (and still is) an Exploration & Production company which cannot be organized as MLP. Hi gougou, I bow to your superior knowledge of MLPs. :beer If one searches for "chesapeake energy mlp" you get a bunch of hits like Barrons, yahoo finance, etc. A poor defense no doubt :wink: , but I wasn't trying to mislead. Still, CHK is a fun story. One heck of a return right after bankruptcy. I must ask, why did you not correct KMI as an MLP? They got into their dividend/debt mess as a c-corp ... Iirc. Regards PS ... Here's the KMI reference. I guess they didn't say MLP. But KMI is not one. BUT they are another great story 😉 They started as "Enron Liquids Pipeline". I'm not saying tha...

On the topic of REITs MLPs BCDs mREITs ... one of my favorites is Chesapeake Energy. It pays 10%, and is up about 95% since 2021. It also went bankrupt in 2020. Exciting to watch. Too exciting for any real money.

CHK was an MLP before it went bankrupt. Not sure of the structure now

https://en.m.wikipedia.org/wiki/Chesapeake_Energy

But maybe it is well known that SPY or a total market fund will consistently outperform even a diversified set of BDCs and REITs held in tax advantaged accounts? Any studies show that? MrCheapo, I take that you are wondering if there's an inefficiency in the market giving individuals with a Roth an advantage over other market participants. AKA total return in a Roth gives an edge over funds, institutions, etc. Who don't get the tax advantage. Specifically in the case of high taxable distributions.? I'd say no because large participants like mutual funds aren't taxed on the distributions either. Also, if there was a study that showed an advantage ... the advantage would go away 😉 But I can't say that I really know 😃. There are clearly advan...

Hi ichee_m

Wow ... you've got cash stashed everywhere. Good for you.
With ~ 30x expenses and all of that SS coming ... after a few years of making sure everything works, I'd up those expenses.

My only real question would be about Health Insurance. "She" has you covered thru 2024 ... but after that, are you looking at ACA? There will likely be an income cap for a good portion of the time before you reach Medicare age. Of course, you have all of that Roth money (non-income) so it seems very manageable.

On the 1099-B detail report they have cols

Ordinary Gain/Loss
GainLoss 1099B
Term

So I'd say MarkNYC is on to something

-- Edit --
Maybe it's for the rental properties that I'm going to buy in my Solo 401k ?

Is index fund just (almost) free bypass to the information created by big fish: a sort of now defunct Napster? https://en.wikipedia.org/wiki/Napster I'm not 100% sure of your view on the value of Napster ... but I'd say: - Napster provided value by bringing a lot of "customers" together. Network effect - Index funds add value by lowering the cost on the average return (scope). Vanguard also benefits from scale to reduce cost. Economies of scope/scale So ... Napster was about the # of users, Index funds are about the production side (lower costs per return). Not the same thing in my view. :happy Procter and Gamble may be a good "scope" example. They produce thousands of grooming/cleaning products. They spread their costs...

Are you a retiree and are you currently following the 4% pattern for withdrawals? If not, I think the Scott/Sharpe paper has little application to your situation. If you are in accumulation mode or not utilizing the 4% pattern, I would certainly follow (a) - VTI in Roth and BND (plus any additional stocks, based on size of accounts and desired AA). Hi David Jay and thank you for your response. I am a retiree and "generally" following a 80/20 VTI/BND + rebalance, 3.5 - 4% pattern. However, I may have buried my question in all of the text above. So let me try again. :D IF put/call collars: 1) offer the same "risk insurance" as a VTI/BND mix 2) the put side (and the BND side) are the likely return loser over time Can one u...

#1 in my case is hesitancy and doubt. Working class background where nobody retires before 75 or more often...death. Continued reading here and calculating and realizing that even being overly, massively conservative, over 50 times spending is enough, which is where we are. So when did we retire? Well, I'm on vacation today, but back to full time job the start of January. I'm 65, so no "early" retirement for me. I stopped working because we have enough, and I started to hate my job. DW is still working, and she loves her job (bless her). My mother in law is beside herself that I'm not working and DW still is. :shock: Of course, it is now much easier on DW since I can take my MiL to all of those doctors appointments. :D

I've been thinking about this for a while but have never really found any opinions. So, any thoughts from fellow Bogleheads? 1) Put/Call collars "could" be used as a risk reduction strategy. Assume VTI or SPY. I've found a few discussions in the forums, and even an ETF that actually does this for you. A solid response to this thinking is: "Why not just buy more BND? The costs are lower." Then I found the following quote from a Jason Scott / William Sharpe paper criticizing the 4% rule as inefficient. https://www.bogleheads.org/wiki/Safe_withdrawal_rates#Papers They buy/sell uncovered calls, which does not work for IRAs. I believe I can buy puts and sell covered calls to get the same result, and this would be allowed in a...

bg5 wrote: ↑Wed Dec 21, 2022 8:01 am It has always been a goal of mine to retire early and I have been doing alot of thinking about this as of late. I hope to be lucky enough to retire early and I feel decent about where I am in life but I am curious about some of the obstacles that could prevent this dream from becoming reality.

1. ....
2. ...
3. ..
4. Separating prudence from fear and coming to terms with the cost of certainty in an uncertain world.

This was posted.on another thread: "If you retire in a Bear market you could conceivably withdraw more. If you are at top of a bull market valuations of stocks are normally higher." How true is this .... While I enjoyed all of the math talk in this thread, I felt compelled to point out that the bold statement is demonstrably not true ... Looking at the data also shows how difficult it is to predict the market. Let's ignore actually picking the top of a bull market, and assume we are "in" a bull market when we are not in a bear market. history-bear-markets-since-1929 says: #4. November 1968 to May 1970 Duration: 18 months S&P 500 loss: 36.1 percent This bear market began just as Richard Nixon was elected president af...

I suppose a really simple thing to do would be to make an x-y graph of cash flows plotted at the time they occur and show what the investor gets. You could do that for any set of bonds, ofr other income streams, and see what it does for you to see getting flow y at time x means. Isn't duration a way to sort of simplify that to a single number ? So, instead of having to plot out the cash flows, there's YTM and duration. Jeffyscott ... that is exactly how I understand duration. I wrote this down for myself ... Duration allows the comparison of Bonds and/or Bond Funds by condensing a number of Bond income characteristics into a single number. This number can be used to estimate : The number of years it will take to fully recover your principa...

Kevin M. is absolutely correct. The definition of YTM mentioned throughout the thread is a textbook definition. But, as evidenced by the questions and the fact that many textbooks get the concept wrong, it is clearly not a great description. My honest goal is to shed some light on YTM in simple terms. Maybe I’m too wordy and a bit sloppy. Here is an attempt be short and sweet. To the OP: YTM does not require that coupons are re-invested. The calculators are correct. The error is in comparing YTM to an Annualized Return. YTM does not allow you to calculate the final balance at maturity for coupon bonds. YTM is the rate of return earned on money that remains invested. Dividend/Interest Payments pull money out of the investment. YTM takes into...

^This may be interesting to some people, but it has nothing to do with the definition of yield to maturity, which is the constant discount rate such that the present value of future cash flows equals price , as had been stated many times in this thread. It has nothing to do with what is done with the cash flows. I find it confusing to try and follow made up definitions for YTM, when the actual one has been well understood for many years. Hi Kevin M, I find it interesting that "the constant discount rate such that the present value of future cash flows equals price" actually means something to the regular Joe. It's certainly too much for me to unpack. :oops: So, are you saying that "Yield to Maturity is the return you are get...

Maybe a picture is useful for folks. Yield to Maturity is the return you are getting for any money that remains invested. When you get a payment, Yield to Maturity is the yield on the money you had invested for the past period (year). https://i.postimg.cc/XNQfdPsX/YTM.png Looking at the bar chart: 1) At the end of year 1 you got $50 on the $1000 you had invested. This is 5% for 1 year. 2) At the end of year 10, you have received $500 in coupons for the $1000 you kept invested for all 10 years. That is 5% each year on the $1000. 3) It is reasonable to argue that spending those coupons in the year you got them provided an economic value! Maybe you even put them in a bond paying > 5%. 4) If you re-invested them at 5%, you could earn the extra ...

Bill seems like a great guy!

I was surprised to hear that he is a Tactical Asset Allocator.
All of us 4% rule passive investors are doomed ...

I hope his service (that tells him when to change his AA) does not rely on CAPE10.

Question: If the research paper is correct and achieving an Annualized Return of 5% does not require reinvesting coupons, then I should get a 5% Annualized Return when not reinvesting the coupons, but I only get 4.77%. Why is that? Question: Perhaps the research paper is not correct, because the only way to get a 5% Annualized Return is to reinvest the coupons, contrary to what the research paper says. Is the research paper incorrect? Hi I'm a non-finance speaking regular schmo, but I think I can translate YTM for folks like me. :happy -- changed this due to dbr's comment -- Yield to Maturity is the return you are getting for any money that remains invested . When you get a payment, Yield to Maturity is the yield on the money you had inves...

quattro73 wrote: ↑Wed Nov 30, 2022 7:21 am Seems like a disguised insurance/annuity pitch.

+1

More information on how to sell it below

https://www.thinkadvisor.com/2022/11/28 ... study/

IF I hold a real 10-year Treasury bond, it is not likely to be 10 years to maturity ... so when they even say "Rates on the 10-year went up 1%" are they talking about a brand new 10-year with 10 to go? My 10-year treasury might have a 5-year duration, and thus correspond to different rates. The rate reported in the news is on the current 10-year Treasury bond, which is 10 years to maturity, but which has a shorter duration because of the coupons. A 10-year bond isn't likely to have a 5-year duration; it's usually 8-9 years, depending on the coupon rate. But there can be a significant duration difference between a newly-issued 10-year Treasury bond, and a 30-year bond issued 20 years ago which is now a 10-year bond. If rates were ...

The gross annual expense ratio as disclosed in the November 1, 2022 Prospectus is 1.20% and represents operating fees and expenses (including acquired fund fees and expenses) incurred by the Fund during the fiscal year ended June 30, 2022.

https://www.hussmanfunds.com/strategic-growth-fund/

I believe VTI is 0.03%.

This part of the future is knowable.

This question should get my flamed (as it is contrary to the BH spirit and smells of market timing).....but........I still find it interesting to ponder and see what others feel. I'll reframe your question ... and also keep it from being what folks here consider market timing. You have Cash. You want to buy a car. Car prices jump around. You want to get it at a good price. The dealer offers you 2 options: 1) Buy at the current price; 2) Make payments at the variable market rate for 12 months. Now why does the dealer offer you option #2? Because 66% of the time he makes more money. On average, 2.3%. This is LumpSum (Option #1) and DCA (Option #2). You say ... no thanks. I'll come back when I know the prices are good. He says "Great, I ...

A 10-year bond might have an 8-year duration, but since most of the value of the bond is from the final payment in 10 years, the duration effect primarily corresponds to changes in 10-year rates. ( And the duration effect for a 10-year Treasury bond will correspond exactly to changes in yields on 10-year Treasury bonds , since the yield on the 10-year Treasury bond is based on the same coupon payments.) This ambiguity comes about because people have the habit of saying "if interest rates go up 1%" but they don't specify which interest rates. Rates across the yield curve rarely move in unison. Usually they mean the Fed's Federal Funds Rate, which is at the short end, but not always. At other times they are referring to the 10-year...

If a fund has equal amounts in bonds with modified duration of 2 and 10 years, it will lose 6% of its value if the yield on both bonds rises by 1%. But short-term rates are more volatile than long-term rates, so it is more likely that the 2-year bond yield rises by 1.5% and the 10-year bond yield rises by 0.5%. If that happens, the fund loses only 4% of its value despite the SEC yield of the fund increasing by 1%. Nice comment ... I'll have to think about this. But isn't this issue also in the duration of a single bond? Each payment is discounted by the same "average" YTM. Each payment could be looked at as a fund of a 1 year, 2 year, 3 year, etc. set of zero-coupon bonds. So an increase in rates, should not impact each payment t...

It would seem that if you have a good chunk of money early on in life you should allocate a small percentage to big upside investments ... I don't think your premise is valid. There is no free lunch. Read the Hedgefundie adventure. Think deeply about what could be/go wrong. Consistent mediocrity can (and does) beat long shots. The way to play years is boring years of compounding in a stock index fund. Why bet what you need for what you don't need? For a 95/5 allocation you need to get a huge return difference to matter. 25% vs 5% return gets you 1%. $100 @ 5% = $105 $95 @ 5 % + $5 @ 25% = $99.75 + 6.25 = $106 Maybe not as dramatic as the nisi post ... but over the last 20 years ... here is: P1: 100% SPY P2: 90/10 SPY/QQQ P3: 100% QQQ QQQ i...

KlangFool wrote: ↑Sun Nov 20, 2022 4:24 pm I do not count on my bond allocation to beat inflation. That is the function of my stock allocation.
KlangFool

I'm so glad you repeat this. This all tends to sound so much more complicated than it should be.

@25x

Bonds shoot for the green line (25 years). Maybe they go a little below ... maybe a little above.
Stocks can beat inflation and drag the line up and get you more years.
Some Bonds keep bad stock "runs" from dragging the line too far down.
In really bad cases ... you need to save more, die early, or develop a taste for kibble.