I personally immediately reimburse myself for health expenses.
I think that the shoe box o' receipts strategy is not very realistic. I do not want to be digging through Lenscrafter and Rite Aid receipts in 20 years.
Take the money and run (to the next available retirement vehicle).
Regarding HealthEquity to Fidelity HSA, I recommend an indirect 60-day rollover once every 12 months. The Trustee-to-Trustee transfer is unwieldy, slow, and frustrating.
Search found 942 matches
- Thu Feb 08, 2024 4:52 pm
- Forum: Personal Finance (Not Investing)
- Topic: What is your HSA strategy?
- Replies: 52
- Views: 6793
- Thu Feb 08, 2024 4:45 pm
- Forum: Investing - Theory, News & General
- Topic: What is your favorite bond fund for the 3 fund portfolio and why?
- Replies: 26
- Views: 2651
Re: What is your favorite bond fund for the 3 fund portfolio and why?
For my bond position, I use TIAA's Traditional (Trad) in fully liquid GSRA variety. Currently paying ~5.3%
- Sun Dec 31, 2023 8:21 am
- Forum: Personal Investments
- Topic: 5% Speculation Artificial Intelligence Play - Most effective way to Add AI to Portfolio
- Replies: 23
- Views: 2685
Re: 5% Speculation Artificial Intelligence Play - Most effective way to Add AI to Portfolio
Count yourself lucky! You already own Apple, Google, Facebook, Microsoft, etc. In other words, you are already investing with the smartest players in AI, not to mention all the other savvy CEOs that are weighing their company's own AI exposure.
In other words, there's no need to add AI to your portfolio. It's already there.
- Thu Aug 17, 2023 7:47 am
- Forum: Investing - Theory, News & General
- Topic: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
- Replies: 79
- Views: 11956
Re: Happy Birthday, FZROX! (Has it Won the Total Market Fund Battle?)
Tag on question:
For those of you happy with FZROX, are you equally happy with FZILX (total international)?
I am a Fidelity investor, mainly within tax advantaged accounts. I am currently set up with FSKAX and FTIHX, but am thinking about making the switch to all zero funds.
For those of you happy with FZROX, are you equally happy with FZILX (total international)?
I am a Fidelity investor, mainly within tax advantaged accounts. I am currently set up with FSKAX and FTIHX, but am thinking about making the switch to all zero funds.
- Sun Aug 13, 2023 9:10 am
- Forum: Personal Finance (Not Investing)
- Topic: Pay off 2.5% home mortgage or 3.8% business mortgage?
- Replies: 11
- Views: 1246
Re: Pay off 2.5% home mortgage or 3.8% business mortgage?
Most here would consider paying off these loans as a behavioral error. The math makes no sense, but you rationalize you "need" to do it. The only possible caveat is that paying off the loans would provide a behavioral boost to increase your savings rate during that time.
The rational thing to do is just add to investments.
The rational thing to do is just add to investments.
- Sun Nov 06, 2022 9:39 pm
- Forum: Personal Investments
- Topic: Simplifying a Merriman Portfolio
- Replies: 6
- Views: 976
- Fri Aug 12, 2022 9:00 am
- Forum: Personal Investments
- Topic: FOMO & regret: TIAA Real Estate TREA QREARX
- Replies: 55
- Views: 7652
Re: FOMO & regret: TIAA Real Estate TREA QREARX
Rolling 1 month annualized return is now 2%.
Rolling 2 week annualized return is negative.
Market timers might want to be out of qrearx for awhile.
Rolling 2 week annualized return is negative.
Market timers might want to be out of qrearx for awhile.
- Fri Aug 05, 2022 4:49 pm
- Forum: Personal Investments
- Topic: How much cash (beyond emergency fund) do you keep on hand?
- Replies: 60
- Views: 8150
Re: How much cash (beyond emergency fund) do you keep on hand?
My family keeps about 3x our monthly expenses in checking. We came to this because we’ve had a rewards checking account that pays interest up to a certain amount. We try to keep that amount in checking.
I suppose our current emergency fund is ~40k of I bonds, a month of free credit card float and two incomes, and a HELOC.
I wouldn’t worry too much about dipping into healthy emergency fund. It’s not a big deal. Reduce your scruples.
I recommend YNAB to help budget and anticipate large infrequent expenses (property tax, etc).
I also recommend opening a no fee HELOC just for fun as an added layer of emergency preparedness.
I also recommend I bonds as an emergency layer.
I suppose our current emergency fund is ~40k of I bonds, a month of free credit card float and two incomes, and a HELOC.
I wouldn’t worry too much about dipping into healthy emergency fund. It’s not a big deal. Reduce your scruples.
I recommend YNAB to help budget and anticipate large infrequent expenses (property tax, etc).
I also recommend opening a no fee HELOC just for fun as an added layer of emergency preparedness.
I also recommend I bonds as an emergency layer.
- Tue Aug 02, 2022 7:56 am
- Forum: Investing - Theory, News & General
- Topic: I Bonds Mega Thread (I Bond Heads Rejoice!)
- Replies: 6658
- Views: 1239394
Re: I Bonds Mega Thread (I Bond Heads Rejoice!)
Hi all! I have finally joined the I bond bandwagon ($10k + $10k spouse). Reading this (https://thefinancebuff.com/buy-i-bonds-as-gift.html), it seems to me that if I like the current rate (don't we all!?), and want to frontload, couldn't I do the following? For example, buy 5 gifts of $10,000 each for spouse, in anticipation that there will be 5 years in the future that they won't be able to (/want to because rates may be lower anyways) buy for themselves, and therefore will use those years to "receive" the gifts. In a nutshell, for example: 2022 buy 5 x $10,000 gifts to spouse 2023 spouse receives 1 of 5, cannot buy 2024 spouse receives 1 of 5, cannot buy 2025 spouse receives 1 of 5, cannot buy 2026 spouse receives 1 of 5, canno...
- Sun Jul 31, 2022 6:20 pm
- Forum: Personal Investments
- Topic: Cash saved for college, needed in 6 years, investment options
- Replies: 28
- Views: 2549
Re: Cash saved for college, needed in 6 years, investment options
If you are married, you can buy 20k I bonds this year.
You can also currently buy 20k of gift ibonds for 2023.
And 2024, 2025, 2026…
You can also currently buy 20k of gift ibonds for 2023.
And 2024, 2025, 2026…
- Fri Jul 29, 2022 10:48 pm
- Forum: Personal Investments
- Topic: FOMO & regret: TIAA Real Estate TREA QREARX
- Replies: 55
- Views: 7652
Re: FOMO & regret: TIAA Real Estate TREA QREARX
It looks like the performance for qrearx in July annualized is a mere 6%
- Thu Jul 28, 2022 11:39 am
- Forum: Personal Investments
- Topic: Help Choosing 529 Provider (UT, NH, IL, etc.)
- Replies: 24
- Views: 2119
Re: Help Choosing 529 Provider (UT, NH, IL, etc.)
That said, curious about investment choices people have made in their 529 accounts (Fidelity or otherwise)--seems like many here have opted to select individual funds instead of age-based. SP500. Rationale: 1) I use a global AA across all my accounts. 2) The benefit of a 529 is Roth-like tax free growth. 3) It just doesn’t make sense to me to have 10s of thousands of dollars in bonds inside of a 529. 4) If the markets do well, I will be doing well. If the markets don’t do well, I’ll be less able to pay for college rather than prioritizing my own retirement. 5) The glide paths in many 529 funds are very wonky. 6) I am underfunding the 529. Thanks, camillus! Your rationale resonates with me, particularly 5 and 6. Am wondering about internati...
- Thu Jul 28, 2022 10:56 am
- Forum: Personal Investments
- Topic: Help Choosing 529 Provider (UT, NH, IL, etc.)
- Replies: 24
- Views: 2119
Re: Help Choosing 529 Provider (UT, NH, IL, etc.)
SP500. Rationale:
1) I use a global AA across all my accounts.
2) The benefit of a 529 is Roth-like tax free growth.
3) It just doesn’t make sense to me to have 10s of thousands of dollars in bonds inside of a 529.
4) If the markets do well, I will be doing well. If the markets don’t do well, I’ll be less able to pay for college rather than prioritizing my own retirement.
5) The glide paths in many 529 funds are very wonky.
6) I am underfunding the 529.
- Thu Jul 28, 2022 7:09 am
- Forum: Personal Investments
- Topic: 2024 Savings Goal: Where To Park Money
- Replies: 14
- Views: 3037
Re: 2024 Savings Goal: Where To Park Money
The opportunity cost on 10k between ibonds and a money market for one year is
10k * 0.015 = $150
10k * 0.096 * 0.75 = $720
$570
10k * 0.015 = $150
10k * 0.096 * 0.75 = $720
$570
- Wed Jul 27, 2022 6:49 pm
- Forum: Personal Investments
- Topic: Help Choosing 529 Provider (UT, NH, IL, etc.)
- Replies: 24
- Views: 2119
Re: Help Choosing 529 Provider (UT, NH, IL, etc.)
There is nothing wrong with the NH plan. It is so nice to see everything under one login.
Before contributing to 529 plans, given the present environment I might take a good look at ibonds and the education tax exemption.
Before contributing to 529 plans, given the present environment I might take a good look at ibonds and the education tax exemption.
- Mon Jul 25, 2022 7:23 pm
- Forum: Personal Investments
- Topic: FOMO & regret: TIAA Real Estate TREA QREARX
- Replies: 55
- Views: 7652
Re: FOMO & regret: TIAA Real Estate TREA QREARX
FWIW, the annualized return on QREARX for the last 5 trading days is 28%.
(Unless I am doing my math wrong, which is a strong possibility.)
(Unless I am doing my math wrong, which is a strong possibility.)
- Thu Jul 21, 2022 7:10 pm
- Forum: Personal Investments
- Topic: FOMO & regret: TIAA Real Estate TREA QREARX
- Replies: 55
- Views: 7652
Re: FOMO & regret: TIAA Real Estate TREA QREARX
I agree. I am not all that young at 39, but my family keeps a decent cash emergency fund and the larger part of our 15% “bond” position is actually I bonds, which is giving me a lot of courage these days. I don’t think I can get into too much trouble with all this.
- Thu Jul 21, 2022 1:43 pm
- Forum: Personal Investments
- Topic: FOMO & regret: TIAA Real Estate TREA QREARX
- Replies: 55
- Views: 7652
Re: FOMO & regret: TIAA Real Estate TREA QREARX
I guess I need to think this through a little more carefully, don't I
- Thu Jul 21, 2022 1:26 pm
- Forum: Personal Investments
- Topic: FOMO & regret: TIAA Real Estate TREA QREARX
- Replies: 55
- Views: 7652
Re: FOMO & regret: TIAA Real Estate TREA QREARX
Each monthy, the investor would check the returns on TRAD and TREA and then make adjustments. There is of course increased risk due to overexposure to one fund. What do you think of this crazy idea? Yesterday I switched my relatively small "bond" position from TRAD (mostly 3%) to TREA (~8% at the moment). We will see how it goes. Do you really want to check monthly? TREA has the following rule: "Transfers out of the account to a TIAA or CREF account or into another investment option can be executed at any time, but are limited to once per calendar quarter, although some plans may allow systematic transfers that result in more than one transfer per calendar quarter." So I understand quarterly. Does your account not have ...
- Thu Jul 21, 2022 12:38 pm
- Forum: Personal Investments
- Topic: FOMO & regret: TIAA Real Estate TREA QREARX
- Replies: 55
- Views: 7652
Re: FOMO & regret: TIAA Real Estate TREA QREARX
I really appreciate all the input. I'm working through an admittedly half-baked strategy for someone like me who has access to TRAD and TREA, and who's preference is toward a three fund portfolio. I am remembering that I came to a three fund portfolio by replicating a Vanguard target date fund and breaking up the pieces for the sake of asset location and tax efficiency. Anyways, here is my starting point: 15% BND, 51% Total US, 34% Total ex-US TIAA evolution #1 : TRAD has some traits that may make it superior to BND, namely principal protection (as evinced by 2021). Therefore, my three fund has evolved into... 15% TRAD GRSA 3% guaranteed fully liquid, 51% US, 34% ex-US TIAA evolution #2 : TREA has some elements that make it superior to TRAD...
- Wed Jul 20, 2022 9:53 am
- Forum: Personal Investments
- Topic: FOMO & regret: TIAA Real Estate TREA QREARX
- Replies: 55
- Views: 7652
Re: FOMO & regret: TIAA Real Estate TREA QREARX
Well I suppose that begs the question: is TREA a buy today?willthrill81 wrote: ↑Wed Jul 20, 2022 9:30 am Yep. It's so easy to time TREA that TIAA has limited the number of times one can sell it, once per quarter I believe.
- Wed Jul 20, 2022 9:04 am
- Forum: Personal Investments
- Topic: FOMO & regret: TIAA Real Estate TREA QREARX
- Replies: 55
- Views: 7652
FOMO & regret: TIAA Real Estate TREA QREARX
I haven't seen many threads about TIAA's TREA / QREARX current outlying performance. YTD 11%, 12 month 22%! And the smooth lines! https://www.bloomberg.com/quote/QREARX:US I have an account with TIAA through a 403(b), and so have access to TREA along with 3% guaranteed fully liquid Traditional. TRAD has been my bond position in a three fund portfolio in my signature. I keep peaking over the fence and watching TREA go gangbusters, while the VTI VXUS and BND crater. These two funds from TIAA (TRAD and TREA) seem to have unique appeal and pull people away from a standard three fund portfolio. I'm wondering if anyone has bought TREA when they would have not otherwise considered a REIT. It seems to offer a bit more diversification because it act...
- Wed Jul 20, 2022 8:49 am
- Forum: Investing - Theory, News & General
- Topic: TIPS increase same rate as IBonds?
- Replies: 25
- Views: 3726
- Wed Jul 20, 2022 7:13 am
- Forum: Investing - Theory, News & General
- Topic: TIPS increase same rate as IBonds?
- Replies: 25
- Views: 3726
Re: TIPS increase same rate as IBonds?
There are two material perks with ibonds which make them essentially tax free for some families:toddthebod wrote: ↑Tue Jul 19, 2022 8:21 amYes, deferred taxation is a big advantage of I bonds relative to TIPS.
1) They are tax deferred.
2) They are tax free if used per the education tax exclusion (even if cashed out in a year you contribute to a 529).
Say you have youngish kids. You have a reasonable chance to pay zero taxes on your ibonds.
- Tue Jul 19, 2022 8:42 pm
- Forum: Investing - Theory, News & General
- Topic: Good news: TIAA Traditional interest rates are increasing 21% on average
- Replies: 41
- Views: 3011
Re: Good news: TIAA Traditional interest rates are increasing 21% on average
Continuing this thread, I just logged on to see what current rates were. These aren't big numbers for my small bond position (outside of - now - ibonds), but has gotten me curious on selling, moving to TIAA real estate or whatever, and buying back into traditional for a higher payout. In my particular situation, this might make me tens of dollars. How does one go about this, exactly? Here's what I see: date -------------------------- accumulation - crediting rate - guaranteed rate - additional amount 01/01/2021 - 12/31/2021 $11,928.00 3.000 % 3.000 % 0.000 % 01/01/2022 - 02/28/2022 $414.92 3.250 % 3.000 % 0.250 % 03/01/2022 - 04/30/2022 $467.86 3.500 % 3.000 % 0.500 % 05/01/2022 - 05/31/2022 $283.41 4.000 % 3.000 % 1.000 % 06/01/2022 - 06/3...
- Wed Jul 13, 2022 9:54 pm
- Forum: Personal Finance (Not Investing)
- Topic: Quick social security question
- Replies: 28
- Views: 4340
Re: Quick social security question
Thanks all. I'm having fun playing with opensocialsecurity!
- Wed Jul 13, 2022 7:39 pm
- Forum: Personal Finance (Not Investing)
- Topic: Quick social security question
- Replies: 28
- Views: 4340
Quick social security question
Thanks in advance for all your help. I am planning on writing a much more detailed post in a few days. Im working on helping my recently retired pop with some financial planning. As I’m figuring out a social security strategy, I’m running up against a few concepts and I’m wondering if you can help me quickly thread the needle. When should my parents claim social security? Ages: Dad 65, big executive income Mom 63, no social security benefit I’m wondering if my dad should fully delay his claim, and then my mom should claim spousal benefit (1/2). But then, I wonder if my dad’s maximized payment combined with my mom’s spousal benefit would surpass the maximum family benefit. I expect there to be taxability to these payments though I don’t unde...
- Thu Jun 23, 2022 12:17 pm
- Forum: Personal Consumer Issues
- Topic: Gold Eagles or Rolex Watch?
- Replies: 56
- Views: 4888
Re: Gold Eagles or Rolex Watch?
What’s your current watch-to-securities ratio?
- Mon Jun 13, 2022 10:29 pm
- Forum: Personal Finance (Not Investing)
- Topic: Leverage Auto Loan at 2.95% or cash purchase?
- Replies: 32
- Views: 3254
Re: Leverage Auto Loan at 2.95% or cash purchase?
Have you maxed out Series I bonds this year?
- Sat Jun 11, 2022 7:05 pm
- Forum: Personal Finance (Not Investing)
- Topic: Where to get small dollar bills tonight?
- Replies: 32
- Views: 4709
Re: Where to get small dollar bills tonight?
I think it would save your family a lot of grief and disappointment if you learned to think about thrift stores in a different way.
You donate goods. The value of these goods is used to pay someone a wage to sort and display them. Someone else is able to purchase these goods for a reasonable price, easing their way and reducing waste.
When you donate to a thrift store, it's like you are hiring the thrift store to run your garage sale and then donating the proceeds to the employees.
[OT comments removed by moderator oldcomputerguy]
You donate goods. The value of these goods is used to pay someone a wage to sort and display them. Someone else is able to purchase these goods for a reasonable price, easing their way and reducing waste.
When you donate to a thrift store, it's like you are hiring the thrift store to run your garage sale and then donating the proceeds to the employees.
[OT comments removed by moderator oldcomputerguy]
- Sat Jun 11, 2022 6:54 pm
- Forum: Personal Consumer Issues
- Topic: How to sell baby clothes?
- Replies: 58
- Views: 4215
Re: How to sell baby clothes?
Here's a question. What's the lowest dollar per hour "wage" you are willing to accept from this activity?
I'm guessing you are at $1/hr or less.
I'm guessing you are at $1/hr or less.
- Fri Jun 10, 2022 9:41 pm
- Forum: Personal Investments
- Topic: It's not market timing if it's in your IPS
- Replies: 51
- Views: 9891
Re: It's not market timing if it's in your IPS
Hi Admiral Fun,
Just curious how your IPS is going. I have access to QREARX / trea and have been intrigued by your posts.
Just curious how your IPS is going. I have access to QREARX / trea and have been intrigued by your posts.
- Wed Jun 08, 2022 1:15 pm
- Forum: Investing - Theory, News & General
- Topic: Different asset allocations for different goals - slicing too thin?
- Replies: 35
- Views: 2603
Re: Different asset allocations for different goals - slicing too thin?
Having multiple AAs might push you toward errors in asset location. An example would be excessive bonds in a 529.
- Sat May 28, 2022 9:33 pm
- Forum: Personal Investments
- Topic: TIAA Traditional Guaranteed Annuity? Any good?
- Replies: 90
- Views: 10744
Re: TIAA Traditional Guaranteed Annuity? Any good?
It is important for you to identify which type of Traditional you have:
https://www.tiaa.org/public/pdf/underst ... choice.pdf
https://www.tiaa.org/public/pdf/underst ... choice.pdf
- Fri May 27, 2022 1:20 pm
- Forum: Personal Finance (Not Investing)
- Topic: How to best deal with tax on old IBonds
- Replies: 37
- Views: 3466
Re: How to best deal with tax on old IBonds
Importantly, is there anyone in your family you’d like to support educationally? Elementary through grad school? Any folks with a disability?
- Thu May 26, 2022 8:31 pm
- Forum: Investing - Theory, News & General
- Topic: At what point does a stable value NOT make sense?
- Replies: 22
- Views: 3311
Re: At what point does a stable value NOT make sense?
A SVF made sense to me when I saw the NAV of TBM climb and peak in 2019 and 2020.
Preface: I don't "get" bond funds.
In 2020, TBM went up with rates at historic lows. I thought, what goes up must come down. I timed the market and switched to SVF for my FI (TIAA Traditional with a 3% floor, guaranteed principal, fully liquid). Lo and behold, rates are going back up and the NAV of TBM cratered entering a possible recession, causing a minor panic. (I suppose not so minor for retires heavily into bonds.)
So SVFs had their day just now. Perhaps it is over. We are no longer have truly historic eye popping rates - 30 yr mortgages in the 2's.
Preface: I don't "get" bond funds.
In 2020, TBM went up with rates at historic lows. I thought, what goes up must come down. I timed the market and switched to SVF for my FI (TIAA Traditional with a 3% floor, guaranteed principal, fully liquid). Lo and behold, rates are going back up and the NAV of TBM cratered entering a possible recession, causing a minor panic. (I suppose not so minor for retires heavily into bonds.)
So SVFs had their day just now. Perhaps it is over. We are no longer have truly historic eye popping rates - 30 yr mortgages in the 2's.
- Fri May 06, 2022 8:09 pm
- Forum: Personal Investments
- Topic: It's not market timing if it's in your IPS
- Replies: 51
- Views: 9891
Re: It's not market timing if it's in your IPS
even "below average" returns aren't that bad. With all the shifting thoughts around bond funds on this forum, I wonder if I need to take a fresh look at TREA. I've already abandoned bond funds for stable value funds. I wonder if TRAD and TREA combo would be a little better.Admiral Fun wrote: ↑Fri May 06, 2022 7:31 pmNote: When the premium is above average on Jan 1, TREA returns an average 12.8% the following year. When the premium is below average on Jan 1, TREA returns an average of 5.2%. We are now well below average.
- Fri May 06, 2022 7:27 pm
- Forum: Personal Investments
- Topic: It's not market timing if it's in your IPS
- Replies: 51
- Views: 9891
Re: It's not market timing if it's in your IPS
I have heard legends of the time-ability of TREA. From time to time I poke around to see what the TIAA forums at Morningstar are saying. I have been too chicken to stray from my three fund (with TRAD 3% GRSA as my "bond" position).
Please let me know when you buy back in
Please let me know when you buy back in
- Thu May 05, 2022 8:54 pm
- Forum: Personal Consumer Issues
- Topic: Dog Poop & Pee Sign for Yard
- Replies: 84
- Views: 6523
Re: Dog Poop & Pee Sign for Yard
Dog owner & dog person here. Congratulations! You live in a wonderful neighborhood. Do you know what wonderful safe, beautiful neighborhoods have? Lots and lots of dogs. I kind of view this as an all-American social contract sort of things. If you live in a nice safe beautiful neighborhood, dogs will pee in your yard. Dogs are animals, like deer, squirrels, birds - many other animals that poop and pee in your yard. The circle of life. The crime against nature in most yards is the 2.5" curated plot of Kentucky Bluegrass. Children raised with animals are more resilient against disease! (I read that somewhere but have no way to back it up right now.) One thing you might consider doing is changing your expectations with your yard. This...
- Thu May 05, 2022 12:13 pm
- Forum: Personal Consumer Issues
- Topic: I've never seen anything like this listed on Slickdeals [US Treasury I Savings Bonds]
- Replies: 12
- Views: 3578
Re: I've never seen anything like this listed on Slickdeals [US Treasury I Savings Bonds]
I also miss FWF. Lots of running jokes, epic threads (rental horror stories, trees from neighbor’s yard), crazy deals, etc. I basically have a bomb proof credit score now because of stuff I started then. I remember the Mint / coin deal being reported on in the WSJ, my dad telling me about it, and me sheepishly admitting that I had brought box loads of coins to my local bank.
I am grateful for bogleheads, but FWF was more fun. (Even a boglehead admits that being a boglehead is boring.)
I am grateful for bogleheads, but FWF was more fun. (Even a boglehead admits that being a boglehead is boring.)
- Thu May 05, 2022 11:48 am
- Forum: Investing - Theory, News & General
- Topic: U.S. stocks in free fall
- Replies: 36221
- Views: 4683223
Re: U.S. stocks in free fall
For me as an accumulator, the rise and fall of BND’s NAV really messes up any rebalancing strategy. When yields are lowered, stocks tend to rally - but oh-oh the aa nav of BND is rising, calling me to sell bonds and buy stocks at a high.
Conversely, when the Fed rate is raised, stocks tend to slump, but uh-oh, BND also tanks, forcing me to sell stocks at a low to buy bonds.
For rebalancing, a stable value fund seems intuitively superior to a bond fund.
- Wed May 04, 2022 5:29 pm
- Forum: Investing - Theory, News & General
- Topic: I-bonds are all the rage - here are some ways to use them
- Replies: 16
- Views: 2904
Re: I-bonds are all the rage - here are some ways to use them
I took interest in I bonds when the rate was 3.54% as an improvement on mortgage principal pre payments. I’m glad I got an early start on the “rage” in 2021.
Even so, I’m not exactly sure what my long term play might be.
And I’m not sure where I bonds should be in a “financial order of operations” for an accumulator. For me personally, they have an appeal with:
1) mortgage arbitrage
2) extended emergency fund
3) meaningful portion of my overall bond position
4) potential tax-free exit into 529s or college costs
Regarding #4, I think many people with college costs in the near term, I bonds are superior to 529 contributions.
Even so, I’m not exactly sure what my long term play might be.
And I’m not sure where I bonds should be in a “financial order of operations” for an accumulator. For me personally, they have an appeal with:
1) mortgage arbitrage
2) extended emergency fund
3) meaningful portion of my overall bond position
4) potential tax-free exit into 529s or college costs
Regarding #4, I think many people with college costs in the near term, I bonds are superior to 529 contributions.
- Tue May 03, 2022 8:52 pm
- Forum: Investing - Theory, News & General
- Topic: Good news: TIAA Traditional interest rates are increasing 21% on average
- Replies: 41
- Views: 3011
Re: Good news: TIAA Traditional interest rates are increasing 21% on average
I have enjoyed holding GSRA Traditional as my “bond” position this year!
I am also annoyed that RC pays more. I agree that TIAA is trying to temp employers out of RA contracts (guaranteed 3% floor).
I am also annoyed that RC pays more. I agree that TIAA is trying to temp employers out of RA contracts (guaranteed 3% floor).
- Sat Apr 30, 2022 7:56 am
- Forum: Investing - Theory, News & General
- Topic: VXUS [Why invest in Vanguard Total International Stock?]
- Replies: 208
- Views: 19270
Re: International
You are framing things as a market timing question. The answer a good boglehead would give to this is that “a good time” is unknowable.
A better way to frame this has to do with what is going to be emotionally easier for you if the market does certain things (go up, go down). Options:
1. Change your positions now immediately (lump sum)
2. Change your positions over a defined period of time (DCA)
3. Change your position with new contributions only.
It is important that the asset allocation you are moving to is the AA you would be happy with for the long term - though bogle himself used the term “tactical asset allocation” for short term situations.
A better way to frame this has to do with what is going to be emotionally easier for you if the market does certain things (go up, go down). Options:
1. Change your positions now immediately (lump sum)
2. Change your positions over a defined period of time (DCA)
3. Change your position with new contributions only.
It is important that the asset allocation you are moving to is the AA you would be happy with for the long term - though bogle himself used the term “tactical asset allocation” for short term situations.
- Sat Apr 30, 2022 7:52 am
- Forum: Personal Finance (Not Investing)
- Topic: Do you balance your checkbook?
- Replies: 200
- Views: 15473
Re: Do you balance your checkbook?
I write checks a few times a year.
You have to remember that checkbooks come from a time before computers.
I reconcile all my accounts in my budgeting software YNAB every month or so. That’s all transactions (credit card, utility auto ACH payments, etc).
Every time I’ve noticed an error it’s been my fault in the end (perhaps every few years a restaurant will record a tip wrong).
Do it if it’s fun for you.
You have to remember that checkbooks come from a time before computers.
I reconcile all my accounts in my budgeting software YNAB every month or so. That’s all transactions (credit card, utility auto ACH payments, etc).
Every time I’ve noticed an error it’s been my fault in the end (perhaps every few years a restaurant will record a tip wrong).
Do it if it’s fun for you.
- Mon Apr 25, 2022 1:27 pm
- Forum: Personal Investments
- Topic: BND vs 3% stable value fund
- Replies: 62
- Views: 6048
Re: BND vs 3% stable value fund
Back to the present - most investors in a two or three fund portfolio - in the next year - will be dealing with the fed raising rates, stocks likely going down, AND bond funds going down. Your bond position in this case fails to help you to rebalance into stocks. camillus, This statement is clearly false. And, it had been proven in March 2020. In March 2020, the stock drops 30+% and the bond drop 7%. In order for this to be true, the bond has to drop at the same level as the stock. This had never happened before. KlangFool Thanks KlangFool. For clarity, I'm not speaking in absolute terms but in relative terms. TIAA Trad did not lose 7% like the bond fund did. The stable value fund investor would be able to rebalance more into stocks than t...
- Mon Apr 25, 2022 1:16 pm
- Forum: Personal Investments
- Topic: BND vs 3% stable value fund
- Replies: 62
- Views: 6048
Re: BND vs 3% stable value fund
Disclaimer: I don't know what the hell I am doing. In 2019 or so, I divested from BND and replaced it with TIAA Traditional (GRSA fully liquid with a 3% floor, principal protected). I now also have i bonds, which are also principal protected. TIAA traditional seems especially good because the principal is protected, a rate floor of 3% is garantueed, and the yield will follow the bond market upwards. I reasoned in 2019 that since the NAV & price of BND went way up after yields went as low as they seemed they could go, then the only place for the price of the fund to go was down. On market timing, it seems reasonable that market timing is possible with bond funds, as the Fed is telegraphing a series of rate increases, meaning that bond yi...
- Sun Apr 24, 2022 4:13 pm
- Forum: Investing - Theory, News & General
- Topic: shocking Total Bond fund returns
- Replies: 140
- Views: 20242
Re: shocking total bond returns
Around 2020, I noticed BND had an inexplicable increase. That’s when I learned about NAV and bond funds. I reasoned that since yields would not go lower, the NAV could only drop. I got out of BND as a part of my three fund portfolio.
Since then I have been making due with TIAA Traditional GRSA 3% floor fully liquid, and now I bonds. Both of these vehicles have guaranteed principal.
Since then I have been making due with TIAA Traditional GRSA 3% floor fully liquid, and now I bonds. Both of these vehicles have guaranteed principal.
- Fri Apr 22, 2022 1:39 am
- Forum: Non-US Investing
- Topic: If Russia attacks Finland? [financial considerations]
- Replies: 34
- Views: 7308
Re: If Russia attacks Finland?
My plan has been that I keep the assets in the company and when we retire (I’m 38 and plan to retire when I’m 50-55) ..... So should I start pay dividends now and pay 27% taxes to get assets to me? Some things to consider. 1) If you wait to take the money out of the company when you are 55+ years old, then what would the tax rate be then? It would be more complicated since you would have to then invest the money in a taxable account but if you will pay the same 27% tax rate when you are 55+ then paying 27% now might not be as bad as it sounds. I agree with Watty. The way to think about taxes is the difference between what you would pay now vs. what you would pay later. I have no idea how your taxes work but if you are going to pay 27% to w...
- Wed Apr 20, 2022 4:12 pm
- Forum: Investing - Theory, News & General
- Topic: Savings (Series I and EE) Bonds and 529 College Savings Plans
- Replies: 33
- Views: 3530
Re: Savings (Series I and EE) Bonds and 529 College Savings Plans
Resurrecting this old thread. It's not my intention to discuss anything untoward. Rather, I'm interested in the tax code in complicated situations and unintended consequences of past pieces of legislation. Concretely, this discussion touches on my real life circumstances as I own I bonds and several 529s. (A previous discussion was locked. I thought I should include this disclaimer.) A few random contributions to the thread above: 1) The Michigan Education Savings Program (MESP) also has this phrasing in it's plan description: "If you are contributing amounts from a savings bond, you must submit an account statement or Internal Revenue Service (“IRS”) Form 1099-INT issued by the financial institution that redeemed the bonds showing the...