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I installed myself a similar product in my Florida house 20 years ago. Installation was not difficult. However, it now has severely deteriorated to the point that it ought to be removed. It looks bad. I can't work up the motivation to redo it. I'm not so sure it did enough to be worth the effort.

My understanding is that the SS early and late retirement benefit calculations were devised to be actuarially neutral across the whole population at a REAL interest rate of 2.9%. We saw those rates and more for a couple years when TIPS were brand new. It looks like the all time best real yield at auction was for a 10-year issued 1/15/2000 at 4.338%. There were a whole lot of issues lower than that and lower than the 2.9% bogey, especially since the GFC. https://eyebonds.info/tips/auctlist_mat.html I used the option menu (checkbox at the top of the home page) at opensocialsecurity to try different real discount rates for my situation: married with spouse 1 year younger and her PIA about half of mine. The usual advice is for her to claim ASAP...

strummer6969 wrote: ↑Mon Mar 20, 2023 11:21 pm The only thing I can think of is I-Bonds which had a yield of 9.62% last year. They do have a $10,000 cap.

That 9.62% was the variable rate. You would add to that the fixed rate, which varies according to when the bond was issued. For bonds issued at the peak fixed rate in the six months starting May 2000, that was 3.6%. These bonds got a composite rate of 13.39% for six months. See the column under 522, 4.81% fixed rate here: https://eyebonds.info/ibonds/rates.html

Here is the TIPSwatch article discussing the performance of that bond: https://tipswatch.com/2023/01/17/a-10-y ... nvestment/

Bottom line is it did 0.11%/year better than a nominal 10-year treasury issued then.

There is a chart in the post which shows how other TIPS issues that have matured did in comparison with the concurrent nominal treasury. Sometimes TIPS wins. Sometimes nominals win.

I used to have problems with this too. You deal with the risk of having to sell stocks low in taxable by selling bonds to buy stocks in tax-deferred and thereby maintain your target allocation. The risk from a stock bear market is therefore that your taxable account may not last as long as you had hoped and if the market rebounds, the stock gains in your tax-deferred account will eventually be taxed at ordinary income rates. If you try to dodge this by holding bonds in taxable and stocks in tax-deferred, you are guaranteed to get sub-optimal tax treatment. You'll pay ordinary income tax rates on the bond income early on and eventually on the stock gains too. The RMD's on a stock-heavy account may become large enough to cause some tax headac...

You might gain a bit of return by rebalancing to a fixed allocation, rather than letting the allocation float according to market cap weights as total international would do. This is what Arctic Pineapple's post shows. You get this effect when the better return cycles from one asset to another and back again. Then again, you might end up rebalancing into a ever-sinking asset class and do poorly on return relative to total international.

Demographics suggest that developed markets might have a tough time. OTOH, there are unique risks to the emerging markets class. It's a guess which way is better going forward.

What are the tax implications of receiving a brokerage bonus? Specifically, my parents will likely be receiving one, from Schwab (retention bonus - their accounts have been there a long time), spread across a taxable trust and some IRAs. Typically, it is treated as interest earned on the assets in the account. So, for a traditional IRA, it would be tax-deferred until withdrawn; for Roth, it would be tax free; for a non-qualified account, it would be taxable interest in the year received. I've seen some brokerages put the bonus into a non-qual account no matter what assets earned the bonus, so taxable that year. The brokerages often use hedged language on the tax treatment, but the above is my experience/observations. I have transferred mos...

If identical in every way means that they have the same total return, the NAV of the low dividend fund will grow at a faster rate - so less dividend means more capital gain. Tax may have to be paid on that extra gain eventually. (You could donate appreciated shares or leave them with step-up in basis on your death. You might also get into the 0% LTCG bracket in retirement.) Deferring the taxes is worth a bit compared to paying every year. The cost gap is narrower than your example.

novolog wrote: ↑Thu Mar 16, 2023 12:38 pm
as more people start to realize they can "borrow long and lend short" by buying t-bills, they will pull their customer deposits. banking business model traditionally assumes these deposits are sticky. but with 1 month T-bills yielding 4.8%, people will start taking their money out of banks (i know i will).

curious to hear if i am missing anything.

I am moving a bit from money market funds to bank deposits; not wholesale, but enough to get through a couple months. I'm giving up a percent or so in interest rate to do so, going to HYSA. I am preparing for potential chaos around the debt ceiling fight. I'm diversifying my sources of ready cash.

For raising spending money, I like to let it sit over the weekend before selling if possible - just to get a few days more interest.

For deploring elsewhere, fire when ready.

"How much risk is a bank taking on?" If my credit union gives 0.1% interest to customers for savings accounts (even in this high-interest environment), can I assume they take on very little risk? There is still risk. Their customers are to some extent waking up to the fact that they can get 5% CDs and 3.5% HYSAs elsewhere and 4+% T-Bills. Deposits may be shrinking. The CU likely holds mortgages made at 3% or so. If they have to sell the mortgages to raise cash to pay off fleeing deposits, they might get 70 cents or so on the dollar. Do enough of that and they are insolvent. Their other choice is to try to keep depositors by raising interest rates to a competitive level. But if they have to pay more interest on their deposit base,...

RANkiDEr wrote: ↑Thu Mar 16, 2023 8:44 am
3.) Which banks don't put deposits into risky assets?

Apparently the answer to this is "none". Banks make money for their shareholders by investing depositor money obtained at low interest cost into loans or bonds that pay higher rates of interest. As any Boglehead knows, investments that return more are more risky. It could be interest rate risk or credit risk that gets them. As a bank customer, you hope the bank has enough capital to live through the short term ups and downs of their investment portfolio and stay solvent. Also, it seems helpful if they are somehow protected from mass-withdrawals. FDIC insurance helps with this as does a diverse depositor base dominated by small accounts.

So the K1 investment is effectively costing you about $1200/year versus DIY taxes, unless you can get the TurboTax thing sorted out. Is it still worth holding?

Best IRA transfer bonus to transfer $250,000? anything beat this $1,000 offer?https://www.merrilledge.com/offers/pr1000 The Wells Fargo premier offer is $2500 for $250k deposit. People a few posts earlier said that IRA works for the 250k requirement. I plan on trying it later this week as the offer expires April 1 The requirement is not a $250K deposit. It requires maintaining a $250k balance. This is different from most brokerage transfer terms which ignore volatility of your investments. If you are going to hold volatile securities there, it better be more than 250k incoming. Might be best to hold bonds there, but these days, those are volatile too. :oops: From the offer terms: Bring $250,000 or more in new deposits to qualifying linked ...

Market conditions are already expressed in the price of the bonds. the question is then, why should you be swayed beyond the expectation across all other participants The market has averaged out the expectations of the participants. Some think SVB was the tip of the iceberg and we're heading for runs on multiple banks and economic chaos. Others have judged this an isolated incident and/or under control given new Fed and Treasury actions. In the first case, short term interest rates are headed down. In the second, it is back to raising rates as ongoing inflation concern will be more important. The outcome will not be the average of the two. One can make a judgement on which is more likely. (With roughly a 50% chance of being wrong. it is no...

How is Schwab to make money going forward?

Cash on deposit with them, on which they earned a margin, is leaving to chase higher yields elsewhere.
Commissions on stock and ETF trades are zero.
Interest in Treasuries is picking up (to dodge FDIC limits), but they get no commission on those either.
ERs on Schwab branded funds are under competitive pressure, so may do well to cover expenses only.

Looks like the market is realizing they have a lousy business model for the times.

The 15 SEER window unit is nearly as efficient as your 16 SEER central air. If you were to correct the central air efficiency for the heat gained through the attic ducts, maybe its a wash or even advantage window units. Further, if you shut down the upstairs unit during the day, there should be less heat gain in that half of the house and so less load on the AC. Warm rooms away from the window ACs will also slow heat gain. I live in a two-story FL house, however I have two AC units, one upstairs (duct in attic) and one downstairs (ducting between floors and air handler in the garage). We let the upstairs warm up during the day and let a programmable thermostat get the upstairs to comfortable temp by bedtime. The programmable thermostats mad...

My understanding is that the amount of delayed retirement credits from SS were calculated consistent with a 2.9% real return for a person of average life expectancy. Your plan would be beneficial if TIPS yielded more than 2.9% real averaged over the term of life expectancy or if life expectancy for this person was shorter than average.

You might verify this for yourself with a spreadsheet exercise. I plan to live longer than average, so I'm expecting more than 2.9% real from delaying SS.

This substantial, safe, real return on waiting to claim is the basic reason why it is often advised to delay claiming.

An air mattress is likely the best bet. Ironically, I find them a bit hard. Ours was much improved by adding a 2" memory foam topper.

The air bed with the built in pump, used every day or three, is convenient.

I did it. Well, that was 35 or so years ago when I was fairly fresh in the workforce. I tried to bump the 401k about half of any raise. Half for me now, half for me later. That half for later resulted in a bit more than half for me now, due to the tax savings. It eventually worked up to max.

Going from 6% to 7% doesn't sound like much, but it is 16% more money going toward your retirement. Your finances shouldn't be so tight that you miss that 1% from your raise.

Back then, it used to irk me that the hourly guys were grossing more than me, a degreed engineer. Of course, they had to put in the overtime to do so. Trades can do pretty well if you can put in the hours.

Questions: 1)  Is a reasonable withdrawal strategy to meet expenses to use, in order? -dividends in taxable accounts -taxable assets, selling those with lowest capital gains first (we have about 250k in capital losses being carried forward) -withdrawals from traditional retirement accounts -Roth  If you really only expect to live until 70 or 75, then I'd withdraw in a different order. I'd use the taxable accounts until you turn 59.5, then I'd start to spend down the T-IRA/401k money. At your age, and with current law, you may not live to RMD age (75), which would mean your spouse is facing RMDs as a single taxpayer, which could bump her up a bracket (or two). Regards, drawing down the tax deferred looks good for this situation. However, th...

If you are approaching the income limit for some tax credit, it might be worthwhile. That would likely be a one-time thing. Maybe you correct the RMD shortfall and pay the associated tax the next year when it is less costly.

I had been planning to move some short term money from money market funds to bank deposits, just in case the MM funds (which are largely Treasuries now) have to freeze redemptions for a while due to the debt ceiling drama. Now I may be at risk of having deposits locked up while FDIC sorts things out. Its going to be hard to pay my far-flung creditors with cash from the mattress.

Early Retirement Now did an examination of the "live off your dividends" strategy here:
https://earlyretirementnow.com/2020/10/ ... s-part-40/

His conclusion is that it does not save you from sequence risk.

Even if it looked good now, I would be concerned that the trend toward buybacks instead of dividends would trash the dividend strategy going forward.

but how much of the insurance difference is liability rather than collision/comp? Minivans are supposed to be cheap to insure because most are driven sedately, never mind the liability exposure of seating for eight. Lots of the folks buying EVs mention how much they like the torque/acceleration of an EV and may be using that capability routinely. It might be the difference between performance oriented drivers who might otherwise be in sports cars and cars as appliance folks. This could show up in liability rates.

anthro789 wrote: ↑Wed Mar 08, 2023 3:37 pm

Svensk Anga wrote: ↑Wed Mar 08, 2023 12:57 pm

Have you been married at least 10 years? If so, she would be entitled to a benefit on your record in case of divorce and her own record is of less concern.

Wouldn't the wife only be entitled to one half of the husband's benefit in case of a divorce?

Yes, I think half is right for that case. Its a lot better than zero she might get if she lacks 40 quarters of earnings.

SS is a very good deal for 35-year averaged wages up to the first bend point. ($1115/month average inflation-adjusted earnings) There is some value to getting her up to this level, but that applies only when she is getting a benefit on her own record. It looks like her spousal benefit will be higher than what she can get on her own record unless there are high earnings in her future. Since she is 5 years younger, there is only a limited window where she could be claiming her own benefit and not yet eligible for spousal. (For example, you claim at 70 and she becomes eligible for spousal at 65 and so could have a benefit on her own record from 62 to 65. It is even more limited if you claim earlier.) There would be some benefit to her in claim...

It seems to provide reasonable relative levels for my current and previous homes.

When we bought our current lot, I was satisfied that the noise level was reasonably low. Then we had the house built and found that sound levels on the second floor were noticeably greater than at grade. Much more road noise comes through higher up. Disappointing since I like to sleep with the windows open in appropriate weather and my bedroom is upstairs.

Worse than road noise, but seasonal, is the Limpkin: https://en.wikipedia.org/wiki/Limpkin They hang out near lakes in Florida (and points south) and can scream all night long.

Surely at least one of you was bothered by the real returns assumed in this scenario? -0.50% real on a very short term bill? -2.25% real on an intermediate instrument? -3.00% real on a long Treasury?? I am not much bothered by these as I understand them to be long term averages. The issue is that there regimes of a decade or more where returns vary a lot from the average. The 1930's were great for long term real bond returns due to deflation. The 1970's were horrible. If we assume we are going to get 3% real from here on a LT, given 3.9% nominal we must expect 0.9% inflation. Who believes that? No, we are very likely in an unfavorable regime for real bond returns. I prefer the 1.5% real on the long TIPS today. Maybe that's the retiree pers...

I suggest you review this thread: viewtopic.php?t=398529

The conclusion is that intermediate term Treasuries are the reasonable choice. There is very little difference in return between intermediate and long term, so why suffer the volatility of LT Treasuries? Total bond is a shade less desirable.

I was looking at the lifetime income from social security site and comparing to networth. Is financial effectiveness a function of Net worth / lifetime earning? If so, mine is around 45% in my 50s. One can increase this effectiveness by better earning, better savings, better investments returns, accrual time? What's yours thoughts? How does this change with age? What can we learn from this? Is your goal to die with the largest estate possible? Is that your definition of "financial effectiveness"? Because the obvious strategy to create a large 'net worth/lifetime earnings' is to spend a lot of time earning money and spend as little as possible. I think OP's goal was to benchmark against those who have successfully navigated this s...

What if your current net worth is higher than your lifetime Social Security earnings? Regards, then that person is one to ask investment or financial advice? :D :D Do you have a question? Regards, how did you do it? how long did it take? what were your highlevel milestones in 10, 20 or 30 year mark? Did you take more risk than bogglehead portfolio? Was your spending substantially less? add whatever you feel comfortable sharing, so others can copy/learn We qualify. To start, we bought a house that we could afford on one starting engineer salary (with a 12% mortgage) so that DW could stay home with the kids until they were in school. She worked before the kids came (3 years) and started again 9 years later. We usually bought low end new cars...

Rebalancing is a risk control technique. Adopting an LMP is a risk control technique. You don't need both.

I am one of those LMP people. I do not rebalance. Before I adopted LMP, I did not rebalance either. I did not see the point.* For most of our accumulation years, I was 100% equities plus emergency fund/vacation fund/car replacement fund in cash. Over about 5 years heading into retirement, I accumulated fixed income on a set glide path, $X/year to get to the target LMP amount. Since retiring 7 years ago, we have been spending down the LMP and letting the equities do what they will. I am not feeling the need to tone down the risk since the LMP covers our expenses. Our overall equity allocation (including the emergency/short term savings fund) has gone from 95% in accumulation to 58% upon retirement, to currently 76%. I never did see why I sho...

whodidntante wrote: ↑Wed Mar 01, 2023 9:37 pm Do y'all think the community needs a thread for bank bonuses and/or credit card bonuses? I'm just raking it in but I don't have anyone to tell.

There is a lengthy thread for credit card rewards.
viewtopic.php?t=192008&start=6200

I don't know of one for bank bonuses.

I didn't say that the SBBI data was cherrypicked. I also don't agree that the correlation is just squishy, unstable, and imprecise; it is non-stationary and exhibits clear "regime" characteristics, where long-term bonds seem to have either a positive or negative correlation over long decades-long periods. Hence, I said that using the average correlation from the data was not reliable for action. Here's an analogy: in a coin flip, imagine the prize for heads is to die a fiery death, and the prize for tails is immense wealth. It would be misleading to look at that and say, well, the average coin flip outcome is .5 heads and .5 tails, so the average outcome can't be so bad (or great). The truth is, the coin flipper is either going t...

I liked my job well enough. The money was better than I had expected on starting out. I retired at 57.

It got to the point that it was obvious that we could reliably fund the kind of lifestyle we were used to and did not really want to expand on that much. So what was the point of spending more of my time acquiring more that we realistically had no use for? My ego had no problem letting go of the title and recognition of the work world. I do miss some of my co-workers.

I really enjoy being free of work obligations. We split time between two states for near ideal weather year-round. We see family more. I am more fit. My wife really needed to ditch the stress that came with her job.

I think an advisor might be worthwhile early in one's career when saving/investing gets going in earnest. This ought to be a one-time fee for service arrangement, not an ongoing AUM model. The advisor would be useful to get things set up for the right direction in asset allocation, asset location, Roth versus traditional, tax planning, etc. Maybe revisit every five years or so or when there are changes. Another review about 5 years out from retirement could be useful to set up withdrawal strategy, reality check on affordable spending levels, Roth conversion strategy, IRMAA planning and more. A motivated and math capable person could learn this on their own, but I doubt that most would do an adequate job. I meet those criteria, but I missed ...

I have purchased TIPS at all three brokers you mentioned. None charge a fee. There will be a (usually) small bid-ask spread in the secondary market. You can look at what's on offer and calculate the spread as a percentage if you like. Bid yield and ask yield should be obvious from the broker's trading screens. I think it is not worth worrying about if you are committed to the strategy. You picked an inconvenient maturity range. There are currently no TIPS maturing 2034 through 2039. You can see a list of all available TIPS with prices, yields, and inflation factors here: https://www.wsj.com/market-data/bonds/tips You can get a 2034 10-year tips when that is auctioned for the first time in mid-January next year. Some folks load up on the 203...

This makes me feel better about being 100% stocks (plus emergency fund in cash) during the meat of our accumulation phase. I was maximizing our utility function, though I did not know it at the time. :happy I got a lot more conservative as retirement approached. Apparently my utility function had shifted. I really didn't want a market setback to keep me working longer, or worse yet, make me look for work again after I had hung it up. I got down to 58% stocks while building a LMP. Now 7 years into retirement my utility function has shifted again. It is becoming clear that we (with a lot of help from the markets) overshot what we need for retirement. I am seeing our portfolio as a chunk that we need to see us through plus a chunk that is for ...

You should run a projection to see where you will stand at year end versus the safe harbor rules. The one appropriate for you seems to be you want 110% of your 2022 tax liability withheld during 2023. If your taxable compensation is large compared to last year, you might make it. If you come up short, you can bump up your withholding from regular paychecks enough to get to the target amount by year end.

A quarterly estimated tax payment for a March bonus would have to be paid by tax day, April 18 2023, to be considered timely and avoid penalty.

A 6% withdrawal rate, to supplement SS and pension, does not seem grossly out of line for the times. Peter Lynch was advocating 7%. OK, that was for a stock portfolio, but they really did not know what a safe withdrawal rate was at the time. Bengen's paper establishing the 4% "rule" came out in 1994. https://www.retailinvestor.org/pdf/Bengen1.pdf Given that their retirement coincided with bull markets in both bonds and stocks, even 6% would likely have worked, had they been invested rather than just letting the funds languish in bank deposits. They were likely unconcerned because interest rates seemed pretty good. If it was in CDs, the interest probably funded their draws. They got caught by the corrosive effect of even mild infla...

I would hope that Vanguard will take note of the way pilot participants vote to see if Vanguard’s choices align with shareholders’ views.

I would like to participate to register my preferences, but do not own any of the pilot funds. The cutoff date to become a shareholder for purposes of this program was Feb 13.

It’s curious that they picked an ESG fund for the pilot. Presumably investors in that fund will be fully on board with the ESG advisory company’s recommendations.

I've held TIPS in taxable brokerage at Vanguard. The inflation adjustment shows up on the 1099 as OID, original issue discount. There is a place for that on the tax return forms. I would think Treasury Direct would have to report this to you similarly. There is a separate line item on the 1099 for coupon interest payments.

If you bought your TIPS late in the year, you may have experienced deflation over your holding period and so may not have any OID to report.

You might cancel another card with BofA and ask them to move that card's limit to your preferred card. I recently did this to double the limit on a newish card. It is probably less than 6 months old. The regular phone rep had no problem doing this. Banks will limit their total exposure to one customer, so it does not matter if your limit is on 1 card or several.

Then, it sounds like you might need another card to cover routine spending. Grab one with a good sign-up bonus from another bank. Probably after you deal with BofA, in case they look at your credit history.

jebmke wrote: ↑Wed Feb 22, 2023 10:36 am
IMO, it is simpler to ask yourself if you will be satisfied with X% real return on fixed income over the duration under consideration and then move along, one way or another.

The benchmark I like for this is whether the X% real will pay the taxes on the nominal return and leave me with 0% real after tax given a reasonably high inflation rate. For example, given 1.5% real available in TIPS now and the 22% marginal bracket, my fixed income keeps up with inflation after taxes up to 5.32%/year inflation. That is acceptably high. (5.32% + 1.5%) x (1 - 22%) = 5.32% After tax return on the nominal return (inflation + real rate) is the same as the inflation rate.

I found a note on the TDA site that says you will be notified 3 months in advance of your account moving. I found it by searching "move to Schwab". It also said the move starts in 2023. That makes me think it will be a very slow process, likely in order to avoid jamming their customer support lines.

If you are looking to use this to reduce the pain of taxes on RMDs, I think you will be disappointed. For the author of the linked article, the annuity pays 6.8%, all ordinary income versus a current RMD of about 4%. The annuity payout could be smaller if a joint annuitant is elected. The annuity payments are level so eventually may pay less than the RMD amount if the funds had been left in the IRA. For those with charitable motivation plus a desire for more lifetime guaranteed income, this could be a good option. I'm beginning to think that I made a mistake by emptying my wife's traditional IRA via Roth conversion before mine. The Secure act 2.0 RMD extension would have helped her more than me (1960 versus 1959 birth years). This Legacy IR...

Regarding series I - most people (including me) say let's wait until we see the March CPI number in April. There is a window of opportunity between the mid-April CPI report for March inflation and April 30, where one can know both the first 6 months interest rate and the May 1 reset rate. If your intent is short-term, end of April is a good time to decide. TIPSwatch.com will publish his calculation of the variable rate soon after the CPI report is released. He will also have an opinion on whether the fixed rate for issue after May 1 will change and which direction, although Treasury has never revealed their basis for setting this rate so it is speculative. If you intend to hold for a long term, the short term variable rate movements hardly...

Biggest problem with my company's SV fund is that the returns are awful. It is run by Vanguard for the MegaCorp so it has a very attractive expense ratio, but the SEC Yield has been running down around 2% for the last 6 mos. It is really not a very effective money market fund. I only use it for very short-term parking of cash when necessary (which is seldom in a 401K). I have a Vanguard SVF in my 401k. I track it on the Vanguard Institutional Investors web site here; https://institutional.vanguard.com/investments/product-details/fund/0340 Check out the market comments under the performance & price tab. The bonds the fund holds have a market value of 93% of the book value of the fund. Interest rates on the fund are not going to come up ...