Bogleheads.org

I apologize for the wording my wife has a Roth account so she could do the conversion there. The thought process behind it is I am likely to have the same if not greater income when retired. Currently my wife and I save about 36k per year toward retirement, this number is going to grow substantially over the next 3 years (wife got a promotion that will double her salary phased in over 3 years). We are both federal employees who also receive a fixed pension based on percentage of salary, plus (if it’s still around social security). Considering the outsized contributions, pensions, SS, and the fact I will likely inherit around 750k to 1m, and I am likely to move to a more cost friendly location outside of NYC that will allow me to yield a si...

Lump sum all investments ASAP and stop worrying about things you cannot control. Over decades of investing, this is highly likely to be insignificant compared to things like AA and savings rate and income. This is different than discussions of DCA vs. lump sum. Lump sum traditionally involves receiving a windfall or otherwise acquiring some chunk of cash, and investing in volatile markets all at once. There is a risk of buying at what turns out to be a relatively high level, but that's the only risk. Being out of the market involves two separate potential risks: selling at a relatively low point and then buying at a relatively higher point. With a rollover some people are potentially dealing with a lifetime of savings; a small percentage v...

It's hard to judge without having been there to see the interaction between you and the preparer and why it made you uncomfortable. Did th return have a bunch of complete account numbers besides your SSNs, and is that the main concern, or is something else concerning?

Lastrun wrote: ↑Sat Mar 25, 2023 10:35 pm

nura wrote: ↑Fri Mar 24, 2023 11:45 pm There are plenty of hybrid cabs (Escape, Highlander, Rav4) in NYC that run 200-400k miles with original battery.

Not my 2009 Mercury Mariner. Had to get rid of it last year as battery went and replacement cost exceeded value of the car. Overall, I had a good experience but would think twice about a true hybrid. Just one data point,

Wouldn't your Mariner have been retired around 2014 if it had been a NYC cab? So possibly it would have made it 200-400k miles?

Ependytis wrote: ↑Sat Mar 25, 2023 10:28 pm If her spouse waits till they are married 10 years before divorcing, is it considered a long-term marriage? If it's considered a long-term marriage, does he owe her alimony for life? If so, he could be shooting himself in the foot by trying to do her a favor.

I would guess that the answer is state-specific, but I'm not an expert. I do know that at least in some states the parties can agree to any division of assets they feel is appropriate regardless of the length of the marriage, so possibly that aspect has already been agreed to. Of course in theory until the actual divorce either party could have second thoughts.

Hi all, Wanted to get some opinions on whether or not I should consider doing a Roth conversion. Here are some stats that may help - Married couple Ages 38 and 35 / 1 Child (2.5 years old) - Combined salary of $217,816 (Wife Salary 54,576 / My Salary 163,240 - 2022 AGI $170,045 - Live in NYC - Current Pre-tax retirement savings balances $394,725 - Current Roth IRA Balance of $13,807 - Current 529 Balance - $52,502 - Current “cash” savings - $100,000 Of the Pre-Tax retirement accounts my wife has a Fidelity 401k from a previous job that has approximately $80,000 in it. I was thinking of doing a Roth Conversion to my Fidelity Roth IRA account. Doing it all at once is something I considered but seems awfully expensive especially considering t...

Journeyman510 wrote: ↑Sat Mar 25, 2023 9:26 pm

David76 wrote: ↑Sat Mar 25, 2023 3:23 pm If I lived your lifestyle, and I had the same or similar wants and needs from a vehicle, I'd probably buy a Honda Passport TrailSport. However, if image and socio-economic status matter to you, a premium vehicle priced north of $50k makes sense.

You are making a negative judgment about OP by assuming someone who wants to spend more than $50k for a car is doing so only for image and socio-economic status. There is no need for that sort of thing.

Oh, we probably all do that subconsciously. It's just convenient that the Honda costs about $49,999.99, so it's okay to buy that, vs. an outrageous $50,000.01 "premium" model.

Lump sum all investments ASAP and stop worrying about things you cannot control. Over decades of investing, this is highly likely to be insignificant compared to things like AA and savings rate and income. This is different than discussions of DCA vs. lump sum. Lump sum traditionally involves receiving a windfall or otherwise acquiring some chunk of cash, and investing in volatile markets all at once. There is a risk of buying at what turns out to be a relatively high level, but that's the only risk. Being out of the market involves two separate potential risks: selling at a relatively low point and then buying at a relatively higher point. With a rollover some people are potentially dealing with a lifetime of savings; a small percentage v...

Vanguard User wrote: ↑Sat Mar 25, 2023 8:15 pm Is it risky to only pick VTSAX on the entire portfolio?

Riskier than some alternatives; less risky than others.

What will you do when someone stops paying rent but leaves their vehicle on the property?

Vanguard User wrote: ↑Sat Mar 25, 2023 6:52 pm

tibbitts wrote: ↑Sat Mar 25, 2023 2:15 pm

Vanguard User wrote: ↑Sat Mar 25, 2023 1:26 pm

tibbitts wrote: ↑Sat Mar 25, 2023 12:56 pm

Vanguard User wrote: ↑Sat Mar 25, 2023 12:16 pm

I was asking how do I benefit for VTSAX?

The point some people were trying to make was that it makes sense to diversify beyond the equivalent of a VTSAX-like investment, whether that's VTSAX or an equivalent you build yourself. Relative to more diversified portfolios I was saying there is no advantage to the VTSAX-like investment.

I thought VTSAX is diversified enough?

And some people here have expressed that they don't feel it is. There is no universal definition of "enough."

Because top holdings are heavy tech?

Some people might say that, but some would simply say there is no reason to exclude all the ex-US companies. Others would say there is no reason to completely exclude fixed income, too.

rkhusky wrote: ↑Sat Mar 25, 2023 5:58 pm If you knew you were to choose the 4400 day, then sure. But you don’t know, so it becomes a matter of probability. For sure, all problems are not purely probabilistic, how much you have at stake also matters. Are we talking your life savings or 1% of your portfolio being at risk.

Oh yes, I agree the amount matters. My recent rollovers were in the low-mid six digit range so significant to me. My earlier transfers were much smaller, when I actually lost money, but that was 40-ish years ago, so the small losses had a lot of time to compound. So it's probably a function of size of the rollover and maybe to some extent the time until you'll be spending the money.

I'm not sure how you are not minimizing the risk of a worse-case outcome by multiple transfer, just as with DCA. By increasing the number of transactions, you are increasing the probability of hitting a bad day. However, you are putting less money at risk each time. The two offset and the overall probability of losing money remains the same. But the probability of a significant outlier event (significant rise in the market, that then can't be offset by a subsequent drop with another transaction) is less. Suppose there are 250 trading days in the year and on one of them the market increases much higher than on any other day. If you are out of the market on that day you lose a lot of money. If you choose one day to be out of the market, you ...

Nver2Late wrote: ↑Sat Mar 25, 2023 4:43 pm

tibbitts wrote: ↑Sat Mar 25, 2023 4:34 pm I'm guessing a lot of Bogleheads read it and thought "wow I really need to exchange that 4.60% fund for the 4.64% one!"

The weighted average of my cash position is currently 4.09%. I could do better.

I can't believe I mistyped "Bogleheads." But yes that's exactly what I mean. In other times we'd be complaining about anyone having enough cash for it to matter.

jeffyscott wrote: ↑Sat Mar 25, 2023 4:06 pm

tibbitts wrote: ↑Sat Mar 25, 2023 4:03 pm

beernutz wrote: ↑Sat Mar 25, 2023 3:47 pm Pls define sub-optimal thx.

That's a good point.

It's not, since the OP did state under 2% as their criterion/definition.

And that's a good point too. I was thinking about how the thread subject would be interpreted; I'm guessing a lot of Bogleheads read it and thought "wow I really need to exchange that 4.60% fund for the 4.64% one!"

rkhusky wrote: ↑Sat Mar 25, 2023 4:19 pm

tibbitts wrote: ↑Sat Mar 25, 2023 9:58 am I'm not sure how you are not minimizing the risk of a worse-case outcome by multiple transfer, just as with DCA.

By increasing the number of transactions, you are increasing the probability of hitting a bad day. However, you are putting less money at risk each time. The two offset and the overall probability of losing money remains the same.

But the probability of a significant outlier event (significant rise in the market, that then can't be offset by a subsequent drop with another transaction) is less.

Out of curiosity, what is the theoretical objection to including capital gains in a fund's distributions, if an investor such as the OP is counting on such distributions to fund their retirement lifestyle? (I would imagine they spend just like a real dollars 💸 😀) Income and cap gains are taxed differently. Income is cash-like, such as interest and dividends, and is usually (always?) positive. One can easily have both capital gains and losses. Money from selling shares also spends just like savings interest, but they are considered different things. Taxed differently when withdrawn from a qualified account? No but it's not about taxation as much as the source of the distribution. You could buy a fund today with $100k and tomorrow get $15k b...

beernutz wrote: ↑Sat Mar 25, 2023 3:47 pm Pls define sub-optimal thx.

That's a good point. For me it would be some fraction of 1%, so for example more than maybe .5%, but I might adjust that, for not necessarily any good reason, with prevailing rates. So earning .5% when 1% is available would be more annoying than earning 4% when 4.5% is available. But given the fanatic optimization around here I'm thinking a lot of people would say any more than .01% below the theoretically maximum available would be sub-optimal, regardless.

London wrote: ↑Sat Mar 25, 2023 2:18 pm The sibling who’s housing the parents is basically taking on a part time job. And for their effort you’d like to treat the expense as their inheritance?

That's exactly the point; usually siblings don't compete to see who gets to take care of mom and dad at an advanced age. Whichever sibling does typically makes sacrifices the others don't.

After re-reading the OP's note on "income," I think the misunderstanding comes down to a belief that you can buy a fund that generates the highest possible dividend and capital gains distributions--and think of it as income-generating. So the OP compares the combined dividend and capital gains distributions of Wellington to the dividends generated from a treasury bond fund. Since Wellington throws out more money in both dividends and capital gains distributions, the OP believes it's generating more "income." Obviously, this is like comparing apples to oranges. If using that logic, you'd go after the PRIMECAP Fund (if it were open) which paid out nearly 10% in dividends and capital gains distributions in December--and no...

Vanguard User wrote: ↑Sat Mar 25, 2023 1:26 pm

tibbitts wrote: ↑Sat Mar 25, 2023 12:56 pm

Vanguard User wrote: ↑Sat Mar 25, 2023 12:16 pm

tibbitts wrote: ↑Sat Mar 25, 2023 11:44 am

Vanguard User wrote: ↑Sat Mar 25, 2023 11:40 am

I am confused.

Okay, what were you asking when you wrote "What is the advantage of just having VTSAX?"

I was asking how do I benefit for VTSAX?

The point some people were trying to make was that it makes sense to diversify beyond the equivalent of a VTSAX-like investment, whether that's VTSAX or an equivalent you build yourself. Relative to more diversified portfolios I was saying there is no advantage to the VTSAX-like investment.

I thought VTSAX is diversified enough?

And some people here have expressed that they don't feel it is. There is no universal definition of "enough."

mega317 wrote: ↑Sat Mar 25, 2023 1:58 pm 1a. What goes to who for the inheritance is up to the parents. It's really none of your business.
1b. Charging your elderly parents? lol. That would be I guess up to the sibling with whom they were living.

2. In before the lock.

The way it was worded about charging was awkward. I think the parents would probably want to contribute somewhat to the household, but like I said it wouldn't be something accounted for down to the last penny.

The OP seems to be saying the $100k is coming from the parents' $400k. I wouldn't count that and still divide anything left equally. I would imagine the parents would want to contribute to expenses, but I wouldn't try to get extremely precise with the breakdown.

Vanguard User wrote: ↑Sat Mar 25, 2023 12:16 pm

tibbitts wrote: ↑Sat Mar 25, 2023 11:44 am

Vanguard User wrote: ↑Sat Mar 25, 2023 11:40 am

tibbitts wrote: ↑Sat Mar 25, 2023 9:49 am

Vanguard User wrote: ↑Sat Mar 25, 2023 1:09 am

I don’t have VTSAX in 401k options.

You mentioned VTSAX, so I assumed you were using that as a shortcut for saying "what is the advantage to 100% domestic equity at cap weight?"

I am confused.

Okay, what were you asking when you wrote "What is the advantage of just having VTSAX?"

I was asking how do I benefit for VTSAX?

The point some people were trying to make was that it makes sense to diversify beyond the equivalent of a VTSAX-like investment, whether that's VTSAX or an equivalent you build yourself. Relative to more diversified portfolios I was saying there is no advantage to the VTSAX-like investment.

biscuit5 wrote: ↑Sat Mar 25, 2023 11:48 am Using HRB 2022 software to prepare my taxes.

When I open HRB 2021 to view my prior years taxes it has an 'update' available.

I am wondering if I should NOT do the update?

Does it update the 2021 software to the 2022 tax code somehow? or? if so, it seems like one should skip the update in the old software as to not create errors in the 2021 return?

Hope I'm wording this understandably.

I realize I can just view my PDFs from last year but wondered about this, esp if one needs to amend a past return years down the road.

Thanks.

I have done the updates, just to make sure my net amounts don't change, for state or federal. No there is no relation to other years' taxes.

Vanguard User wrote: ↑Sat Mar 25, 2023 11:40 am

tibbitts wrote: ↑Sat Mar 25, 2023 9:49 am

Vanguard User wrote: ↑Sat Mar 25, 2023 1:09 am

tibbitts wrote: ↑Fri Mar 24, 2023 7:55 pm

Vanguard User wrote: ↑Fri Mar 24, 2023 6:22 pm

What is the advantage of just having VTSAX?

There isn't one, if you mean the entire portfolio. In an employer plan sometimes you have cheap access to one category or another (domestic TSM for example) but not another (International maybe.) So you get exposure to what you can get cheaply in the employer plan, and get the other exposure in an IRA or somewhere else.

I don’t have VTSAX in 401k options.

You mentioned VTSAX, so I assumed you were using that as a shortcut for saying "what is the advantage to 100% domestic equity at cap weight?"

I am confused.

Okay, what were you asking when you wrote "What is the advantage of just having VTSAX?"

I have to keep at least $1500 for my "free" checking at 0%. So the cost of the "free" checking is higher than it used to be, since I keep at least $1k extra, on average maybe $2k. If you drop below even one day by $1 you owe massive (percetage-wise) fees so I don't cut it too close.

OldSport wrote: ↑Sat Mar 25, 2023 11:18 am

retiredjg wrote: ↑Sat Mar 25, 2023 11:16 am Do you have an active 401k or similar plan at work that you could roll the pre-tax portion of your IRA into?

No. My plan does not allow this. It's a pain. Spent a lot of time looking into it. They only allow 401k direct rollovers into the plan. They do not permit rollover into the plan from a rollover IRA, pretax or otherwise. Spent A LOT of time trying to do this unsuccessfully last year. Ironically had I been able to do that, lump summing would have lost 20% of value. So I'm not terribly upset about it.

So you have kept the rollover amount in cash? Just wondering about the 20%.

Yes entirely $24k gets converted, but the $18k was kept in Fidelity in a new separate Roth IRA and the Vanguard was an existing Roth and after tax traditional I've been using for Backdoor for many years. I've just not had any TIRA basis until this year. Taxes were too high to Roth convert the entire Rollover in 2022, but would have made accounting simpler starting with $0 TIRA basis for 2023. What does "taxes were too high" mean in this example? OK. Will look at that and compare to TT. Taxes were too high, means that instead of just paying 24% plus NIIT on the taxable part of the conversion, would have to pay 32% plus NIIT on most of the rest, plus IRS underpayment penalties so would have to do estimated in 2023, which I wanted t...

The irrational fear of being out of the market for a few days here and there is stoked largely by articles of the "If you had missed the X best days of the market in the past Y years your returns would be Z% lower" variety, where Z is obviously some dramatic percentage. The questions those articles never touch on, for good reason, are the probability of randomly missing the X best days, the expected impact of missing random days instead of best ones, and the effect of missing some consecutive set of days including those cherry-picked best ones. The answers nullify the desired narrative. It's odd that the finance media doesn't run "If you had missed the X worst days..." articles. If you did miss the X worst days the posi...

OldSport wrote: ↑Sat Mar 25, 2023 9:22 am Yes entirely $24k gets converted, but the $18k was kept in Fidelity in a new separate Roth IRA and the Vanguard was an existing Roth and after tax traditional I've been using for Backdoor for many years. I've just not had any TIRA basis until this year. Taxes were too high to Roth convert the entire Rollover in 2022, but would have made accounting simpler starting with $0 TIRA basis for 2023.

What does "taxes were too high" mean in this example?

Colorado Guy wrote: ↑Sat Mar 25, 2023 9:45 am Would prefer a slightly used car (maybe a couple of years to avoid heavy depreciation), but not absolutely necessary.

I'm not sure if depreciation is even close to being back to a thing yet. With some popular models (naturally what everyone wants) there may still be a premium for availability, so there may be little or no depreciation. It's not like a few years ago when you could sometimes buy a domestic model after a couple of years and get half off.

I had to do this recently with a 4-5 day window out of the market, and I just did 25% per week for 4 weeks to hedge my bets. I think I ended up about .5% ahead. But if I would have picked the wrong window in that month with 100% out I would have lost close to $10k. And if you had picked the right window, would you have gained more than $10K? Usually you can at least break large transactions apart to minimize the risk, and if not there's usually some other way to minimize the risk. Using multiple transactions doesn’t really minimize the risk. It’s just a trick to make you more comfortable. The same as dollar cost averaging versus lump sum investing. Certainly you can win or lose. However one difference is that the risk can be on both ends o...

The ones who are 💯 equity? I'm not sure what that means. Regardless of equity percentage I'm pretty sure that the majority of Bogleheads have some international allocation, whether explicitly through an index fund, or through one of the Ws or a Target or LifeStrategy fund. So only a minority would have VTSAX or the equivalent ETF as their only equity position. What is the advantage of just having VTSAX? There isn't one, if you mean the entire portfolio. In an employer plan sometimes you have cheap access to one category or another (domestic TSM for example) but not another (International maybe.) So you get exposure to what you can get cheaply in the employer plan, and get the other exposure in an IRA or somewhere else. I don’t have VTSAX i...

I jumped on the VTSAX bandwagon like everyone else. I wouldn't say everyone else, or even a majority here, ever jumped on the VTSAX-only bandwagon (not even only in terms of their equity allocation.) The ones who are 💯 equity? I'm not sure what that means. Regardless of equity percentage I'm pretty sure that the majority of Bogleheads have some international allocation, whether explicitly through an index fund, or through one of the Ws or a Target or LifeStrategy fund. So only a minority would have VTSAX or the equivalent ETF as their only equity position. What is the advantage of just having VTSAX? There isn't one, if you mean the entire portfolio. In an employer plan sometimes you have cheap access to one category or another (domestic TS...

After re-reading the OP's note on "income," I think the misunderstanding comes down to a belief that you can buy a fund that generates the highest possible dividend and capital gains distributions--and think of it as income-generating. So the OP compares the combined dividend and capital gains distributions of Wellington to the dividends generated from a treasury bond fund. Since Wellington throws out more money in both dividends and capital gains distributions, the OP believes it's generating more "income." Obviously, this is like comparing apples to oranges. If using that logic, you'd go after the PRIMECAP Fund (if it were open) which paid out nearly 10% in dividends and capital gains distributions in December--and no...

Isn’t the US market the most stable? International would be more towards speculative? You just said you're not emotional, so why would stability concern you? And if the U.S. is more stable, why wouldn't that be priced in? I jumped on the VTSAX bandwagon like everyone else. I wouldn't say everyone else, or even a majority here, ever jumped on the VTSAX-only bandwagon (not even only in terms of their equity allocation.) The ones who are 💯 equity? I'm not sure what that means. Regardless of equity percentage I'm pretty sure that the majority of Bogleheads have some international allocation, whether explicitly through an index fund, or through one of the Ws or a Target or LifeStrategy fund. So only a minority would have VTSAX or the equivalent...

Quick question. Obviously that is a huge difference between the two funds stated above but VTINX is about 30/70 and Wellington is 60-65% stock. How much is that contributing? It wouldn't characterize it as a huge difference, but you pointed out that somehow we were talking about Balanced Index and all of a sudden Target Retirement got in the mix somewhow. I'm more confused than usual now. Yes I noticed that also as Balanced Index is more in line with Wellington at about 60% stock, I believe. And when they mentioned Target Retirement I paid attention since our Target Date 2015 converted to the income fund. I wondered if it was the AA that was making a difference. (BTW, it doesn't take much to confuse me either--sometimes the more I learn th...

The system automatically did that match. I am not emotional when it comes to bear market so I am ok with not drops like 2008 and 2020. Why do I need Bonds or international stocks? See the video linked in the first post of the thread below for some reasons why you should consider adding international stocks to your portfolio. Link: https://www.bogleheads.org/forum/viewtopic.php?t=400140 Regards, Isn’t the US market the most stable? International would be more towards speculative? You just said you're not emotional, so why would stability concern you? And if the U.S. is more stable, why wouldn't that be priced in? I jumped on the VTSAX bandwagon like everyone else. I wouldn't say everyone else, or even a majority here, ever jumped on the VTS...

utvolfan wrote: ↑Fri Mar 24, 2023 1:37 pm Quick question. Obviously that is a huge difference between the two funds stated above but VTINX is about 30/70 and Wellington is 60-65% stock. How much is that contributing?

It wouldn't characterize it as a huge difference, but you pointed out that somehow we were talking about Balanced Index and all of a sudden Target Retirement got in the mix somewhow. I'm more confused than usual now.

AlwaysLearningMore wrote: ↑Fri Mar 24, 2023 11:44 am Your post prompted me to look at the numbers.
In 2022 Wellington (VWENX) delivered $5.489825 per share to investors.
Vanguard balanced index fund (VBIAX) delivered $1.121543 per share to investors

Except that per-share income isn't relevant unless the share prices are equal. So what was the difference in dividend yield, per dollar (well, maybe per $50k dollars for example, since that's the Wellington share-class minimum)?

Vanguard User wrote: ↑Fri Mar 24, 2023 12:31 am

retired@50 wrote: ↑Thu Mar 23, 2023 11:37 pm

Vanguard User wrote: ↑Thu Mar 23, 2023 11:07 pm
The system automatically did that match. I am not emotional when it comes to bear market so I am ok with not drops like 2008 and 2020. Why do I need Bonds or international stocks?

See the video linked in the first post of the thread below for some reasons why you should consider adding international stocks to your portfolio.

Link: viewtopic.php?t=400140

Regards,

Isn’t the US market the most stable? International would be more towards speculative?

You just said you're not emotional, so why would stability concern you? And if the U.S. is more stable, why wouldn't that be priced in?

ubermax wrote: ↑Fri Mar 24, 2023 10:19 am For an external drive I was advised to get one utilizing a spindle rather than SS because recovery of data is easier in the case of a malfunction - I have a Western Digital 1 Terabyte - Model is My Passport Ultra .

Normally you would always have at least two external drives. I've had conventional drives fail gradually, and been able to recovery data myself from them, and maybe that would be less likely with an SSD. However I've also had conventional drives fail completely without obvious warning, and if you mean for a data recovery service, recovery from any type of drive would likely be prohibitively expensive for most consumers.

...For what it's worth, Wellington is a good fund but I don't think I'd characterize it as an income fund. "Wellington has been in business since 1929 and was the industry’s very first balanced fund. Wellington’s typical 60/40 split of equities and bonds mirrors the way the trustees of many large pension funds invest. They know they need reliable long-term growth and that their portfolios must, in all circumstances, be able to pay their pensioners ." Paul Merriman https://paulmerriman.com/the-9-best-vanguard-funds-for-retirees/ "Vanguard Wellington™ Fund uses a conservative approach and emphasizes broad diversification to moderate risk in pursuit of three objectives: long-term capital appreciation, reasonable current income ...

Those individual treasures everyone hated in 2019 still delivered 1.5-2% annually. So you're saying that an intermediate treasury bond bought in 2019 could be sold today for a return of 1.5-2%/yr, even though it hasn't matured? I don't know, I'm just asking, and I would have guessed it couldn't be. I bought them off the market in 2019 expiring in 2020 to 2022. One of them I sold within a year for 4% profit but yes the rest earned 1.5-1.6% annually to their expiration - that was the going rate in 2019. I was buying I-bonds and EE bonds as they expired. I also bought 3.1% 5 year CD's in Feb 2019. Okay that makes sense; you bought bonds on the secondary market with limited duration remaining. So while they had been intermediate maturity bonds...

abc132 wrote: ↑Fri Mar 24, 2023 1:09 am
Those individual treasures everyone hated in 2019 still delivered 1.5-2% annually.

So you're saying that an intermediate treasury bond bought in 2019 could be sold today for a return of 1.5-2%/yr, even though it hasn't matured? I don't know, I'm just asking, and I would have guessed it couldn't be.

Can you please explain how Total Bond dividends will continue to go up to 5.5%- 6%? How do older bonds being replaced by new bonds raise the dividends? Why wouldn't Total Bond dividends continue to go up if prevailing interest rates went up? Whether they'll be 5.5% to 6% exactly at some particular point in the future isn't something anyone can predict. The previous poster didn't say anything about the prevailing interest rates going up, His claim was that total bond dividends would go up only because old bonds are being replaced by new bonds in the fund as they mature. HomerJ said "SEC yield on risk-free bonds is up to 4.5%. So corporate bonds are paying more..."; I don't know how that could be interpreted some other way than &qu...

msaffer wrote: ↑Wed Mar 22, 2023 4:44 pm Is this a reasonable plan? What am I overlooking? Thanks.

I think it might frustrate you to be selling stocks at a time when they're down 30% but bonds are up 10%. The recent correlation in performance won't always be the case. Separating the asset classes would let you choose what you want to sell. Of course, "up" and "down" is relative and nobody really knows what up or down should be compared to.

There have been some discussion of what's "income" in this thread, and my take is that dividends from the fund are income, but capital gains aren't. The IRS has its own view of course but when you compare other fund yields to Wellington, I'd suggest only looking at dividends.

I don't know if that's true or not... SEC yield on risk-free bonds is up to 4.5%. So corporate bonds are paying more, and the Total Bond dividends will continue to go up as older bonds are replaced with newer bonds. I can certainly see them hitting them 5.5% or 6% this year. Maybe not 7.8%, but you may end up fairly close to 2.5% over the 7 years, and probably by 8 years. It's not exactly perfect. Can you please explain how Total Bond dividends will continue to go up to 5.5%- 6%? How do older bonds being replaced by new bonds raise the dividends? Why wouldn't Total Bond dividends continue to go up if prevailing interest rates went up? Whether they'll be 5.5% to 6% exactly at some particular point in the future isn't something anyone can pr...

I don't know if that's true or not... SEC yield on risk-free bonds is up to 4.5%. So corporate bonds are paying more, and the Total Bond dividends will continue to go up as older bonds are replaced with newer bonds. I can certainly see them hitting them 5.5% or 6% this year. Maybe not 7.8%, but you may end up fairly close to 2.5% over the 7 years, and probably by 8 years. It's not exactly perfect. Can you please explain how Total Bond dividends will continue to go up to 5.5%- 6%? How do older bonds being replaced by new bonds raise the dividends? Why wouldn't Total Bond dividends continue to go up if prevailing interest rates went up? Whether they'll be 5.5% to 6% exactly at some particular point in the future isn't something anyone can pr...