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by Prudence
Sat Mar 02, 2024 9:03 am
Forum: Personal Investments
Topic: TIPS vs TIPS fund?
Replies: 99
Views: 12846

Re: TIPS vs TIPS fund?

It seems there is the implication in this thread by some that the only way to eliminate interest rate risk is by buying an individual TIPS and holding to maturity, but my understanding from vineviz is that you can eliminate interest rate risk with bond funds , and this is via duration matching by making sure your investment horizon exactly matches the average duration of your bond funds; do this and you should be indifferent to changes to rates. So, if, for example, you're withdrawing at a constant rate over a period of 30 years, your investment horizon is 15 years, which means you want your bond funds to match that and have an average duration of 15 years. You might do this with a combination of a long-term TIPS fund like LTPZ, and an int...
by Prudence
Sat Feb 24, 2024 3:06 pm
Forum: Investing - Theory, News & General
Topic: Building a TIPS ladder for IRA RMDs
Replies: 22
Views: 2927

Re: Building a TIPS ladder for IRA RMDs

I've been building a TIPS ladder in my IRA recently, using the Desired Annual Real Income (DARA) that I estimate to be my residual expenses (not covered by Social Security or any other safe income stream). More recently I estimated my traditional IRA RMDs that I'll begin taking in 2025, and I discovered that my RMDs will be significantly larger than my DARA. So I think that after a first pass in which I get the ladder built using my initial DARA, I'll most likely do a second pass where I beef up the DARA to equal my estimated RMDs. This requires making a modification to #Crunchers TIPS ladder spreadsheet , which I've been using to help build my ladder, to allow different amounts of annual real income for each year. I posted a little about ...
by Prudence
Fri Feb 23, 2024 4:03 pm
Forum: Personal Finance (Not Investing)
Topic: Very Recent TIPS Fund Price Movement
Replies: 7
Views: 988

Re: Very Recent TIPS Fund Price Movement

I bought VG intermediate TIPS fund on January 22nd ... I checked VG's price chart and noticed that the share price was $23.14 on February 1st and it was $22.69 yesterday. It seems to me that interest rates and inflation have been relatively flat over the past few weeks. Ignoring dividends, the share price of a bond fund moves in line with the prices of the bonds it holds. And the price of a bond varies inversely with the bond's yield-to-maturity. So, if the share price of a bond fund falls, it means the average yield of its holdings must have risen. Over the period you mention, this is indeed what happened with "intermediate TIPS funds"; i.e., those that hold TIPS maturing in more than one year -- what I call "1+" index...
by Prudence
Fri Feb 23, 2024 11:06 am
Forum: Personal Finance (Not Investing)
Topic: Very Recent TIPS Fund Price Movement
Replies: 7
Views: 988

Very Recent TIPS Fund Price Movement

I bought VG intermediate TIPS fund on January 22nd and noticed that the value of my investment had declined since then. So, I checked VG's price chart and noticed that the share price was $23.14 on February 1st and it was $22.69 yesterday. It seems to me that interest rates and inflation have been relatively flat over the past few weeks. So, I am wondering if the change is mostly due to investor expectations of lower inflation over the longer term.
by Prudence
Wed Feb 21, 2024 7:32 am
Forum: Personal Finance (Not Investing)
Topic: High yield savings/checking account
Replies: 29
Views: 3365

Re: High yield savings/checking account

I have accounts at Vanguard, Ally and Capital One. I have a high yield savings account at Capital One (yield over 4%). I like that the funds can be transferred instantly between the savings and checking. Also, they have automatic backup so no bounced checks. No fees. Ally is great but ACH to Vanguard or Capital One takes at least one business day.
by Prudence
Tue Feb 20, 2024 4:54 pm
Forum: Investing - Theory, News & General
Topic: Now that long TIPS yields are 60 bp off their highs I will…
Replies: 2937
Views: 611478

Re: Now that long TIPS yields are 60 bp off their highs I will…

Kevin, I have a dozen questions, but I will just go with two:
1. Ultimately will you have a single TIPS ladder to 2047 or 2048? Will your ladder have some TIPS in your IRA and the rest in taxable?
Will you have more than one TIPS ladder (if that makes any sense)?
2. Why will your RMDs increase in the out years (little more detail please)?
by Prudence
Wed Feb 14, 2024 1:32 pm
Forum: Personal Consumer Issues
Topic: Netflix subscription
Replies: 87
Views: 6109

Re: Netflix subscription

I am thinking of renewing now. They are good to deal with. I had one issue before. For some reason, I was billed by Netflix directly to my credit card and on my Comcast bill (two charges). It took a few phone calls to both and was difficult to resolve. Next time I will be careful when I renew.
by Prudence
Mon Feb 12, 2024 8:46 am
Forum: Personal Finance (Not Investing)
Topic: Individual TIPS vs TIPS Funds
Replies: 34
Views: 3226

Re: Individual TIPS vs TIPS Funds

If you hold the TIP itself, the increases in the value of the TIP are used to calculate the amount of interest earned, BUT, the are also taxable each year even though you did not receive the increase in real cash! Taxes are certainly a reason to prefer to hold TIPS or bonds in general in tax deferred. But I don't think this cash flow issue should be a factor in that decision. I don't have any TIPS in taxable, but even if I did hold them there it's not like they would be 100% of what we do have in taxable. Furthermore, you would get the coupon payments and likely be able to pay the taxes on the inflation adjustment from that money. Ultimately there's also the option to sell some TIPS or other investments if you need more cash for taxes or f...
by Prudence
Sun Feb 11, 2024 12:47 pm
Forum: Personal Finance (Not Investing)
Topic: Individual TIPS vs TIPS Funds
Replies: 34
Views: 3226

Re: Individual TIPS vs TIPS Funds

... can you please add a scenario where there are no reinvestments (reinvestmented at zero percent perhaps?). I would like to see that to compare against your three scenarios. I can think of three cases to model this and calculate a Terminal Value Annual Return (TVAR). Coupons are reinvested at a 0% real rate. Coupons are reinvested at a 0% nominal rate. (This is equivalent to sticking them in a mattress and not actually reinvesting them.) But since we are analyzing TIPS with a real return, we have to make an inflation assumption and convert 0% nominal to a real rate. for instance if we were to assume 2% inflation, the real reinvestment rate is about -2% . The coupons are spent. But in this case, TVAR has little meaning. It would be better...
by Prudence
Fri Feb 09, 2024 1:41 pm
Forum: Personal Consumer Issues
Topic: What is your favorite book?
Replies: 186
Views: 19921

Re: What is your favorite book?

The Killer Angels by Michael Shaara
An Army at Dawn by Rick Atkinson
by Prudence
Fri Feb 09, 2024 1:36 pm
Forum: Personal Finance (Not Investing)
Topic: Individual TIPS vs TIPS Funds
Replies: 34
Views: 3226

Re: Individual TIPS vs TIPS Funds

... if I buy a TIPS with a two percent YTM, and hold it to maturity, I will have received two percent real ... Correct? Correct. You will receive two percent real on all the money you invested in the TIPS. This is correct if the vague phrase, "will receive ...", refers to yield-to-maturity (YTM). YTM doesn't depend on how or even if coupons are reinvested. But if it refers to what I call Terminal Value Annual Return (TVAR) [1], it isn't necessarily correct. To illustrate, here is a comparison of two bonds both with a YTM of 2%. One has a 0-1/8% coupon and matures in 28 years while the other has a 1-1/2% coupon and matures a year later. [2] Row 9 in the table below [3] shows that if coupons are reinvested at 2%, the same as the YT...
by Prudence
Fri Feb 09, 2024 9:42 am
Forum: Personal Finance (Not Investing)
Topic: Individual TIPS vs TIPS Funds
Replies: 34
Views: 3226

Re: Individual TIPS vs TIPS Funds

2. Thau has this quotation in her discussion of duration: "So, you should always hold bond funds with a duration equal to or shorter than the expected need for your money (note that holding the duration shorter than your need for the money leaves you exposed to the risk of lower returns if interest rates fall)." Suppose I buy a TIPS bond fund with an average duration of 6.5 years. Assume that I will be holding this fund for at least 20 years. Is this the wrong move if I know I will be needing some of the money before the 6.5 years are up? I think it depends on when you need that portion of the money and how much of it you need. If you have a series of small withdrawals (e.g. 3-4% per year over 10+ years) from the fund, I don't th...
by Prudence
Fri Feb 09, 2024 8:07 am
Forum: Personal Finance (Not Investing)
Topic: Individual TIPS vs TIPS Funds
Replies: 34
Views: 3226

Re: Individual TIPS vs TIPS Funds

Suppose I buy a TIPS that matures in ten years with a yield-to-maturity of 2% and I do not reinvest any of the semi-annual coupon payments (maybe I spend them or put them under the mattress). Assuming I hold the bond until the maturity date, will I have earned two percent real? yield-to-maturity is not the same as what is earned even though many people use them as synonyms. Yield-to-maturity is simply the interest rate that solves the present-value equation when setting the bond cost equal to the stream of interest payments and principal repayment at maturity. It does not take what happens to the coupon payments into account at all. But what most people mean by "earned" (and I suspect you do as well) is how much they have at matu...
by Prudence
Thu Feb 08, 2024 9:31 pm
Forum: Personal Finance (Not Investing)
Topic: Individual TIPS vs TIPS Funds
Replies: 34
Views: 3226

Re: Individual TIPS vs TIPS Funds

Svensk Anga wrote: Thu Feb 08, 2024 9:21 pm
Prudence wrote: Thu Feb 08, 2024 2:15 pm
3. Thau has lots of material regarding zero coupon bonds. Our accounts are at Vanguard and Treasury Direct. How would I purchase a zero coupon inflation protected bond (i.e. a TIPS zero coupon bond) if there is such a thing?
Treasury policy is for TIPS to have a minimum coupon rate of 0.125% even if the yield set at auction is negative. There are some outstanding issues with this rate. It is not zero coupon, but it is very close.

The inflation adjustment portion of TIPS return works essentially as a zero coupon bond. You don't receive the inflation adjustment until maturity (or until you sell the bond +/- bond price moves).
Good points, thank you.
by Prudence
Thu Feb 08, 2024 8:50 pm
Forum: Personal Finance (Not Investing)
Topic: Individual TIPS vs TIPS Funds
Replies: 34
Views: 3226

Re: Individual TIPS vs TIPS Funds

Suppose I buy a TIPS that matures in ten years with a yield-to-maturity of 2% and I do not reinvest any of the semi-annual coupon payments (maybe I spend them or put them under the mattress). Assuming I hold the bond until the maturity date, will I have earned two percent real? yield-to-maturity is not the same as what is earned even though many people use them as synonyms. Yield-to-maturity is simply the interest rate that solves the present-value equation when setting the bond cost equal to the stream of interest payments and principal repayment at maturity. It does not take what happens to the coupon payments into account at all. But what most people mean by "earned" (and I suspect you do as well) is how much they have at matu...
by Prudence
Thu Feb 08, 2024 2:15 pm
Forum: Personal Finance (Not Investing)
Topic: Individual TIPS vs TIPS Funds
Replies: 34
Views: 3226

Individual TIPS vs TIPS Funds

I re-read Bonds vs Bond Funds in the Wiki. I have some questions regarding the material authored by Annette Thau. 1. Thau has this quotation in her discussion of a bond ladder: "Moreover, if you don't reinvest the interest, you won't get the full annualized yield that made you so excited to buy the bond in the first place." (Out of context). Suppose I buy a TIPS that matures in ten years with a yield-to-maturity of 2% and I do not reinvest any of the semi-annual coupon payments (maybe I spend them or put them under the mattress). Assuming I hold the bond until the maturity date, will I have earned two percent real? 2. Thau has this quotation in her discussion of duration: "So, you should always hold bond funds with a duration...
by Prudence
Tue Feb 06, 2024 1:06 pm
Forum: Investing - Theory, News & General
Topic: TIPS Ladder Spreadsheets in General & Two in Particular
Replies: 166
Views: 47581

Re: TIPS Ladder Spreadsheets in General & Two in Particular

... the XIRR sheet ... assumes a maximum of 30 TIPS, so if you have more than that, it doesn't include them all. ... I have 37 different TIPS in the ladder sheet ... I've expanded the workbook's XIRR and ToPaste sheets to handle up to 50 selected TIPS. Looks good! Thanks. I am thinking of using a TIPS Ladder and the Vanguard intermediate TIPS fund for my IRA (because my annual residual expenses are difficult to predict). If the VG fund has a 6.5 average years duration, to partially mitigate interest rate risk, what if I build a ladder to cover 6.5 years (2024 through 2030) and invest the rest of the IRA in the fund? (The goal remains to invest 100% of the IRA in TIPS). It is no bother for me to manage. What you think of this approach? Let'...
by Prudence
Mon Feb 05, 2024 11:51 am
Forum: Investing - Theory, News & General
Topic: TIPS Ladder Spreadsheets in General & Two in Particular
Replies: 166
Views: 47581

Re: TIPS Ladder Spreadsheets in General & Two in Particular

... the XIRR sheet ... assumes a maximum of 30 TIPS, so if you have more than that, it doesn't include them all. ... I have 37 different TIPS in the ladder sheet ... I've expanded the workbook's XIRR and ToPaste sheets to handle up to 50 selected TIPS. Looks good! Thanks. I am thinking of using a TIPS Ladder and the Vanguard intermediate TIPS fund for my IRA (because my annual residual expenses are difficult to predict). If the VG fund has a 6.5 average years duration, to partially mitigate interest rate risk, what if I build a ladder to cover 6.5 years (2024 through 2030) and invest the rest of the IRA in the fund? (The goal remains to invest 100% of the IRA in TIPS). It is no bother for me to manage. What you think of this approach?
by Prudence
Sun Feb 04, 2024 6:52 pm
Forum: Investing - Theory, News & General
Topic: TIPS Ladder Spreadsheets in General & Two in Particular
Replies: 166
Views: 47581

Re: TIPS Ladder Spreadsheets in General & Two in Particular

Thanks again, Kevin, for the perfect reply. And thank you #Cruncher (and your collaborators) for the essential ladder builder.
by Prudence
Sun Feb 04, 2024 4:20 pm
Forum: Investing - Theory, News & General
Topic: TIPS Ladder Spreadsheets in General & Two in Particular
Replies: 166
Views: 47581

Re: TIPS Ladder Spreadsheets in General & Two in Particular

For my first time, I used the Ladder Builder spreadsheet to build a TIPS ladder from 2025 to 2044. Suppose I wish to invest my entire IRA in TIPS. If I choose a $50,000 DARA (Desired Annual Real Amount), the total cost of the ladder will be about 90% of my IRA current balance (for 2025 through 2044). Questions: 1. If I wish to invest the remaining 10% in my IRA in the TIPS ladder, should I increase the DARA (>$50,000), or, extend the ladder beyond 2044? 2. If DW and I die before the end of the ladder, can our heirs keep the TIPS until the maturity dates, if they choose? 3. Our accounts are at Vanguard. If desired, to satisfy future RMDs, is it possible to do an in-kind transfer of individual TIPS bonds from the IRA to our taxable account? 4...
by Prudence
Fri Jan 26, 2024 9:53 am
Forum: Personal Investments
Topic: Is a 100% TIPS portfolio a perpetual inflation-adjusted withdrawal?
Replies: 36
Views: 3170

Re: Is a 100% TIPS portfolio a perpetual inflation-adjusted withdrawal?

On Vanguard, the February 2044 TIPS has a YTM of 2.1%, not bad. I see lots of posts from members building TIPS ladders. OTOH, has anyone bought a single long-term TIPS (say maturing in the 2040's) with the intention to hold to maturity (and perhaps spend interest payments during the term)?
by Prudence
Fri Jan 26, 2024 9:39 am
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

Prudence, Durham, which I'm not familiar with, looks like an easy train trip. Just be sure you are able to walk to whatever sights you are interested in (or have a plan for transport once you get there). I also wanted to recommend a couple of tour companies if you decide to do some day trips into the countryside. Out of London: https://www.internationalfriends.co.uk We used this recently for a private tour of the Downton Abbey filming sites, but they also have small group and coach tours that are easily on the budget. They also have a Cotswolds/Oxford combo: https://www.internationalfriends.co.uk/oxford-cotswolds-pub-lunch.html. https://britmovietours.com for fans of British movies and TV shows Have no personal experience but they have som...
by Prudence
Thu Jan 25, 2024 3:20 pm
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

Thank you again for all the valuable replies. We are exploring the idea of staying in York in addition to London. The whole trip would be in September 2024. While in York, we would like to visit Durham. Questions: 1. Should we start in York (for X nights in a hotel or rented flat) and end in London (14 nights in a rented west end flat) so it would be easier to get to Heathrow on the way home to the US? 2. How many nights should we spend in York (previous replies have suggested from one to four nights)? 3. Should Durham be a day trip by train from York (no nights necessary to see it)? 4. Do we need a car for Durham (hope not)? 1. Either way would work but I would at least travel to London the night before returning, if ending in York then t...
by Prudence
Thu Jan 25, 2024 2:12 pm
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

Thank you again for all the valuable replies. We are exploring the idea of staying in York in addition to London. The whole trip would be in September 2024. While in York, we would like to visit Durham.
Questions:
1. Should we start in York (for X nights in a hotel or rented flat) and end in London (14 nights in a rented west end flat) so it would be easier to get to Heathrow on the way home to the US?
2. How many nights should we spend in York (previous replies have suggested from one to four nights)?
3. Should Durham be a day trip by train from York (no nights necessary to see it)?
4. Do we need a car for Durham (hope not)?
by Prudence
Wed Jan 24, 2024 10:07 am
Forum: Personal Investments
Topic: Is a 100% TIPS portfolio a perpetual inflation-adjusted withdrawal?
Replies: 36
Views: 3170

Re: Is a 100% TIPS portfolio a perpetual inflation-adjusted withdrawal?

As a risk averse retiree, I have pondered this, with some tweaks. Suppose my time horizon is 25 years and my residual expense (income less expenses including taxes) is $20,000 per year. The Vanguard intermediate term TIPS fund currently has a 2% real SEC 30-day yield. If I invest $1 million in the fund and the fund averages 2% (excluding inflation adjustments) over the 25 years, I could withdraw $20,000 per year and have $1 million adjusted for inflation left. Two percent per year real is probably very unrealistic. If the fund only averages 0% per year, I will not run out of money in 25 years. Alternatively, I could set up a TIPS ladder (with current positive YTMs) for the 25 years; but my year-to-year residual expenses are actually variab...
by Prudence
Wed Jan 24, 2024 9:09 am
Forum: Personal Investments
Topic: Is a 100% TIPS portfolio a perpetual inflation-adjusted withdrawal?
Replies: 36
Views: 3170

Re: Is a 100% TIPS portfolio a perpetual inflation-adjusted withdrawal?

As a risk averse retiree, I have pondered this, with some tweaks. Suppose my time horizon is 25 years and my residual expense (income less expenses including taxes) is $20,000 per year. The Vanguard intermediate term TIPS fund currently has a 2% real SEC 30-day yield. If I invest $1 million in the fund and the fund averages 2% (excluding inflation adjustments) over the 25 years, I could withdraw $20,000 per year and have $1 million adjusted for inflation left. Two percent per year real is probably very unrealistic. If the fund only averages 0% per year, I will not run out of money in 25 years. Alternatively, I could set up a TIPS ladder (with current positive YTMs) for the 25 years; but my year-to-year residual expenses are actually variabl...
by Prudence
Wed Jan 24, 2024 9:05 am
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

Thanks Watty.
by Prudence
Tue Jan 23, 2024 2:20 pm
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

1. Should we go in September or October? 2. Is 14 nights enough time to see London and go on a day trip, perhaps every other day so we can have adequate downtime? 3. Is Heathrow too congested? Is there a better alternative such as Gatwick? 4. Can we rely on public transportation (or taxis) for whole trip? 1. September will be warmer, obviously. 2. More than enough time. I would plan on at most 3-4 side trips, not 6-7. 3. I believe from the DC area all the nonstops are into LHR. It's a pretty terrible airport all around, but for arriving into London it's not that bad, since you won't have to transfer terminals or go through security; immigration is automated and quick. Fly into whichever airport has the best time/fare. It's not worth connec...
by Prudence
Tue Jan 23, 2024 1:25 pm
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

OP here. After carefully reviewing all of your comments, for which I am very grateful, I have made many revisions to the prior trip plan. First, this is DIY (no travel agent). We originate from Wash DC area. We rent a flat in London in or near west side for 14 nights. We make day trips from London by bus or train to: Cambridge, Oxford, Brighton, Canterbury and Dover (single trip?). Questions: 1. Should we go in September or October? 2. Is 14 nights enough time to see London and go on a day trip, perhaps every other day so we can have adequate downtime? 3. Is Heathrow too congested? Is there a better alternative such as Gatwick? 4. Can we rely on public transportation (or taxis) for whole trip? 5. Are there any day trips from London that I o...
by Prudence
Mon Jan 22, 2024 6:13 am
Forum: Investing - Theory, News & General
Topic: How to prove that I am not losing money with bond funds?
Replies: 118
Views: 14605

Re: How to prove that I am not losing money with bond funds?

I read so many times that as long as I keep a bond fund to the duration of the bond fund maturity, I will not lose my capital. Same thing with a TIPS funds. With nominal bonds, you are guaranteed not to lose in NOMINAL terms. Nominal terms are meaningless since they do not factor inflation (purchasing power). With TIPS you are guaranteed not to lose in REAL terms, which are the only terms that matter. The SEC 30 day yield on the Vanguard medium term TIPS fund (VAIPX) is currently about 2%. Is that the same as 2% real? Vanguard is somewhat unique in quoting SEC yield in real dollars. On their data sheet note G says: G-DOES NOT INCLUDE ANY INCOME ADJUSTMENT RESULTING FROM CHANGE IN INFLATION RATE Other fund companies state the SEC yield in n...
by Prudence
Sun Jan 21, 2024 11:25 am
Forum: Investing - Theory, News & General
Topic: How to prove that I am not losing money with bond funds?
Replies: 118
Views: 14605

Re: How to prove that I am not losing money with bond funds?

protagonist wrote: Sun Jan 21, 2024 11:18 am
RandomPointer wrote: Wed Jan 17, 2024 8:51 pm I read so many times that as long as I keep a bond fund to the duration of the bond fund maturity, I will not lose my capital. Same thing with a TIPS funds.
With nominal bonds, you are guaranteed not to lose in NOMINAL terms. Nominal terms are meaningless since they do not factor inflation (purchasing power).
With TIPS you are guaranteed not to lose in REAL terms, which are the only terms that matter.
The SEC 30 day yield on the Vanguard medium term TIPS fund (VAIPX) is currently about 2%. Is that the same as 2% real?
by Prudence
Fri Jan 19, 2024 11:03 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4107
Views: 455405

Re: Trading Treasuries (nominal and TIPS)

Kevin, I bought January 2025 TIPS (912810FR4) from Vanguard on 12/1/2022. The lot is in my IRA. The cost per share acquired was $1.64 and the cost per share as of yesterday was $1.62. As of yesterday, Vanguard was showing a cost basis loss on this lot of 1.02%. If I were to sell this lot now, would my loss be about 1.02%? I am wondering if the loss reflects inflation since when I acquired the lot (e.g. would the actual loss be less than 0). Hi Prudence. I don't understand "cost per share" for a TIPS. Bonds don't have shares, but are sold in increments of $1,000 face value. I believe brokers do increase the basis by the amount if inflation adjustment. Since it's in an IRA, it doesn't matter, but since you would pay annual income t...
by Prudence
Fri Jan 19, 2024 7:15 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4107
Views: 455405

Re: Trading Treasuries (nominal and TIPS)

Kevin, I bought January 2025 TIPS (912810FR4) from Vanguard on 12/1/2022. The lot is in my IRA. The cost per share acquired was $1.64 and the cost per share as of yesterday was $1.62. As of yesterday, Vanguard was showing a cost basis loss on this lot of 1.02%. If I were to sell this lot now, would my loss be about 1.02%? I am wondering if the loss reflects inflation since when I acquired the lot (e.g. would the actual loss be less than 0).
by Prudence
Thu Jan 18, 2024 1:47 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4107
Views: 455405

Re: Trading Treasuries (nominal and TIPS)

Kevin: I might be jumping the gun here. Today Vanguard executed my purchase of the Jan 2034 TIPS (via Treasury auction). Treasury Direct shows the High Yield and Interest Rate are 1.810% and 1.75% respectively. Does this mean that the YTM will approach 1.810%? When will I know the YTM?
by Prudence
Thu Jan 18, 2024 9:22 am
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

IMHO, I think you are a prime candidate for a tour. We have travelled extensively worldwide but still use tours, primarily Tauck although there are many others. If you haven't done much travel internationally I personally feel that much of the good advice offered here will be overwhelming. Why not just ease into the process? One possibility is a UK tour followed by an Ireland tour or vice versa. Whatever works. However, for a full month in the UK etc, it would not be hard to come close to the 50K figure, especially with airfare included. Depending on the level of travel of course. Good luck. My concern about a tour is being required to keep the pace set by the tour and having to accept their lodging choices. I like something more individua...
by Prudence
Thu Jan 18, 2024 6:24 am
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

Thank you Valuethinker. I really need these details to avoid lost time on the trip.
by Prudence
Wed Jan 17, 2024 1:21 pm
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

One minor point to remember when doing a short-term flat rental... There are a lot of "historic" buildings in central London (where you would want to be). Sometimes tourist apartments in these will be in odd corners of these buildings or have awkward access. Pay attention to the floors, and whether they have lift access. Remember that in London they count ground floor as what we would call "first" floor in the US, and so forth, so places may be up one more flight of stairs than you would expect. My rule of thumb as a tourist is that you want to be staying somewhere inside the loop of the circle line underground route (or if outside it, within walking distance to circle line stations). That's not an absolute, but it's a ...
by Prudence
Tue Jan 16, 2024 8:35 pm
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

Wow, I had no idea. We can easily fly from IAD. I will go there or consider an alternative like United.
by Prudence
Tue Jan 16, 2024 1:37 pm
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

Yikes, thank you!
by Prudence
Tue Jan 16, 2024 12:52 pm
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

1. Much more than I would spend for the same length of time. 2. I don't see a need for a travel agent to go to a place where they speak English of a sort. 3. I'm not on board with the idea of a single trip to see everything that matters. [/color] What do you recommend instead of a single trip: maybe a two-week trip to Scotland in 2024 and a two- or three-week trip to England in 2025, for example? A two week trip would be a good way to start if you haven't been to Europe before. I'd probably start with London and its environs. Rent a flat in central London for a couple of weeks and get to know the city; you'd have a kitchen for breakfast and for when you tire of eating out. Lots of prepared meals for takeaway are available too. Many, many t...
by Prudence
Sun Jan 14, 2024 1:39 pm
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

adamthesmythe wrote: Sun Jan 14, 2024 12:49 pm 1. Much more than I would spend for the same length of time.

2. I don't see a need for a travel agent to go to a place where they speak English of a sort.

3. I'm not on board with the idea of a single trip to see everything that matters.

What do you recommend instead of a single trip: maybe a two-week trip to Scotland in 2024 and a two- or three-week trip to England in 2025, for example?
by Prudence
Sun Jan 14, 2024 7:19 am
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

All, thank you for the excellent replies. My conclusion is that we can save a lot of money with a different approach.
by Prudence
Sat Jan 13, 2024 4:25 pm
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

Re: UK Trip Estimate

Thanks for the suggestions, very helpful.
by Prudence
Sat Jan 13, 2024 2:27 pm
Forum: Personal Consumer Issues
Topic: UK Trip Estimate
Replies: 104
Views: 9487

UK Trip Estimate

[Topic is now in Personal Consumer Issues - mod mkc] DW and I are planning a trip to England and Scotland in 2024. We met with a travel agent (specialist in UK and Ireland) and after giving her our ideas, she drafted an itinerary for our review. We told her that we did not wish to feel rushed or, OTOH, waste any time. The cost ($50,000 not including international flights) is more than we expected. We have very little travel experience outside the US. We would leave Maryland on September 11 and return from Edinburgh on October 14. The lodging is mostly boutique hotels, BnBs and inns. The trip includes some guided tours with a private driver, some self-driving with a rental car, and tickets to some well-known tourist spots. Breakfast is incl...
by Prudence
Sat Jan 13, 2024 1:26 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Effect on RMDs (IRA Required Minimum Distributions)
Replies: 2
Views: 493

Tax Effect on RMDs (IRA Required Minimum Distributions)

I have a TIPS ladder in my IRA to fund annual residual expenses (gap between inflation protected income sources and expenses including Federal and state tax payments). I am 77 and have been taking RMDs for the past few years. Should I increase the dollar amount of the rungs on my ladder to provide for Federal and state tax payments (so the TIPS rung would be a before-tax amount) to cover the ordinary income tax on the future RMDs? I think it may not be necessary because I have been taking RMDs for the past few years and all of my Federal and state tax liability has been included in my expenses. What is the standard practice?
by Prudence
Fri Jan 05, 2024 8:28 am
Forum: Personal Finance (Not Investing)
Topic: CCRC return of % of entrance fee tax treatment
Replies: 11
Views: 1330

Re: CCRC return of % of entrance fee tax treatment

Hillview wrote: Thu Jan 04, 2024 5:17 pm We are moving my mother into a CCRC. The entrance fee is 75% refundable when she is no longer living (there). We are funding her CCRC buy in. Does anyone know what the tax treatment is of the returned 75% when she is no longer living there.

Details
Cost is 700k
return will be 525k
how will the 525k be treated in terms of taxes
If I were you, I would ensure that you are named beneficiary of the refundable entrance fee (your mother or her POA would sign the form) so that the fee would be distributed to you following the mother's death and the "re-sale" of the apartment she was living in. This would not be a taxable distribution.
by Prudence
Thu Jan 04, 2024 6:22 pm
Forum: Personal Finance (Not Investing)
Topic: CCRC return of % of entrance fee tax treatment
Replies: 11
Views: 1330

Re: CCRC return of % of entrance fee tax treatment

We are moving my mother into a CCRC. The entrance fee is 75% refundable when she is no longer living (there). We are funding her CCRC buy in. Does anyone know what the tax treatment is of the returned 75% when she is no longer living there. Details Cost is 700k return will be 525k how will the 525k be treated in terms of taxes We live in a CCRC in Maryland and we paid a refundable entrance fee. We signed a disposition of entrance fee refund form in which we named a beneficiary. The beneficiary could be our estate or persons. I am not an attorney or a tax accountant. The distribution of the entrance fee to the beneficiary would not be taxable. If the refund goes to our estate, then I assume it would be handled in accordance with the will or...
by Prudence
Wed Jan 03, 2024 4:37 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4107
Views: 455405

Re: Trading Treasuries (nominal and TIPS)

Awesome, thank you, Kevin. :happy