Bogleheads.org

Yes, the inflation factor is one that has piqued my interest. The five-year gap without a COLA can reek havoc especially in early retirement (I understand the concern many face without COLA'd pension/annuity). Your Social Security PIA is still increasing (by a wage growth index) even if you aren't working and delaying claiming and your portfolio has growth potential. And the hit is limited to 6 years. Most non-COLA'd pensions or annuities are looking at decades of no adjustment. The real return from portfolio will likely (sooner or later) take care of age 57-62 inflation erosion from FERS. Since I retired 4-year compounded inflation has been 15% and my total retirement income from portfolio and FERS is up 17% with no COLA. And I have only ...

With delaying FERS and 30-something years of service you gain roughly 3% per year for each incremental year, the COLA to your high-3 is arbitrary and unknown (set by POTUS and congress) and you are wasting the FERS supplement, offset somewhat by the 1.1% kicker but only if you go till 62. With delaying social security you are gaining 8% per year by delaying and you get a COLA based on US wage growth. And with no requirement to be working while you delay. I went out at the top of the GS pay grid at 56 with 36 years including SL credits. Bottom line if you are financially prepared to retire and want to retire go for it. There are no outsized credits for delaying and you are wasting the healthiest and most active years of your retirement. All ...

I'd opine nothing except doing exceptionally well in the richest in the graveyard contest.
Most of the extreme over-savers here never mention what positive things they are doing now with unneeded funds.
If you stack and compound various worst case scenarios it's easy to not spend much of anything.
Heirs might be happy although I know a few heirs that really feel bad for over-saving parents that missed out on some great things.

We're well into year 5 of withdrawing 5% of annual portfolio balance and it's working out great despite 2 or 3 bear markets, a global pandemic and war in Europe. Nominal and inflation-adjusted portfolio balance (and annual income) is higher than when we started in our mid-50's. Her Social Security at 62 and mine at 70 will backfill very nicely if a poor sequence of returns arises and dings our income from portfolio considerably (since it's % of balance). My current pension reduces the volatility of total income already. SS income streams will reduce that volatility even further. True needs are roughly 1/3 of income so lots of flexibility. Doing the SWR limbo (how low can you go!) is popular here for reasons that escapes me. I get the sense ...

Cash, whether in Schwab checking, savings or uninvested cash in your brokerage account is swept into FDIC Schwab bank. If it's over 250K, Schwab has an program to spread it across multiple banks. If it's invested it's it stocks, bond or mutual funds, all have many protections preventing problems at the brokerage from affecting your securities. Even money market funds. Is there a twilight zone say after the sale of a security and the sweep into FDIC Schwab bank? Maybe/doubtful but if that sort of thing keeps you up at night I don't see how you could stomach the volatility of owning stocks, bonds or mutual funds. SWVXX isn't at risk if Schwab Inc. has issues. Its risk would be in the very short-term commercial paper and other non-government s...

JoMoney wrote: ↑Sun Mar 12, 2023 11:40 am

MnD wrote: ↑Sun Mar 12, 2023 11:38 am

JoMoney wrote: ↑Sun Mar 12, 2023 10:50 am

MnD wrote: ↑Sun Mar 12, 2023 10:34 am I'm guessing Fidelity is not regretting their decision to not own a real bank.

Not sure if that was sarcastic or not. Not being exposed to the financial shenanigans of a "real bank" would seem to be less exposure to this whole borrowing short from depositors, and lending long term, that banks do.... and get into trouble with when short-term depositors want their money and their long-term investments have fallen in value.

I was serious.

How/why did you think owning a real bank would put Fidelity in a better position at this point in time?

I don't. That's why I said "I'm guessing Fidelity is not regretting their decision to not own a real bank"

JoMoney wrote: ↑Sun Mar 12, 2023 10:50 am

MnD wrote: ↑Sun Mar 12, 2023 10:34 am I'm guessing Fidelity is not regretting their decision to not own a real bank.

Not sure if that was sarcastic or not. Not being exposed to the financial shenanigans of a "real bank" would seem to be less exposure to this whole borrowing short from depositors, and lending long term, that banks do.... and get into trouble with when short-term depositors want their money and their long-term investments have fallen in value.

I was serious.

I'm guessing Fidelity is not regretting their decision to not own a real bank.

I posted last week that I had a hunch that Schwab will index their sweep bank account interest to their government money market fund.
Like they have done so in their robo-accounts. I think the odds of this happening just went up a lot.

If Schwab drops another 25% I'll be tempted to buy some shares. The last two individual stocks I owned were Schwab and Costco and did very well with both. Interesting parallel with this thread https://www.bogleheads.org/forum/viewtopic.php?t=399783 where the poster discusses owning Silicon Valley Bank and Costco. Curious why Costco is the choice of stock to pair with a financial firm.... :? Before I gave up individual stocks entirely I only invested in companies where I had observed significant shifts in our household spending or (wealth) to those institutions. The 3 biggies were Schwab, Costco and Amazon. Did I invest in Amazon? Of course not because they had lost money forever and everything I read saw no end in sight to that. :oops: But...

If Schwab drops another 25% I'll be tempted to buy some shares.
The last two individual stocks I owned were Schwab and Costco and did very well with both.

Great thread. Indexing the FDIC bank sweep rate to SWGXX is a huge improvement. It's interesting it's not actually invested in SWGXX, allowing Schwab bank to earn higher returns on the spread. This service (SIPP) seems very competitive now and is now on my "consider list" whereas previously it was not. The negative threads I've seen regarding SIP and SIPP focused on the FDIC cash slice earning far less. Regarding the very transparent disclosure on the .30 overall cap, that seems hard to hit unless the fundamental indexing ETF's were deployed, especially the Invesco ones (which likely pay for placement). I have never heard of the Xtracker ETF's. Low ER's but perhaps they too would pay Schwab. Is there a "switch" to includ...

What's your marginal tax bracket?

In your situation I would sell VBTLX in your taxable account (assuming you would realize a tax loss) at Vanguard and purchase VTEB (Vanguard Tax-Exempt Bond ETF). That would transfer nicely to Schwab or Fidelity when you are ready to do so and will be a more tax efficient placement.
Simplicity is great but proper placement of assets for tax reasons should not to be ignored.

Schwab has a muni ETF with a lower expense ratio SCMB (.03) but it's only a few months old. If you end up with an unrealized loss in VTEB, SCMB could be a tax-loss trade pair down the road.

And meanwhile they still haven't fixed the minimum installment payment programming error for those not subject to RMD's. It took them months to even acknowledge it was a problem and no fix a month later. "We are in the process of addressing this issue." Sounds like they are incapable of trouble-shooting their own code in a timely manner. As of 03/07/2023, I see this at the Known Issues page: Current known issues There are no known issues at this time Is this true? The problem with installment payment setups failing below a certain (erroneous) $ threshold has been resolved. I just set up a desired amount that was repeatedly rejected for being "too low" in January. Spouse received the Docusign document within seconds of m...

I'm very surprised at the number of people in this thread believing that SS early claiming penalties and delayed claiming credits are actuarially neutral. They are not, even for those of average life expectancy. It's even more favorable for Boglehead demographics which I'd opine trends towards higher income, more education, better access to health care and less smoking than average. Also the higher income delaying strategy for a 2-benefit couple isn't actuarially offset and represents an additional free lunch given joint life expectancies. The lower earner who penalizes themselves by claiming early, inherits the higher earners benefit if they survive them. But it's good to look at the sensitivity of less than perfect claiming strategies. I...

The history of trust depletions (1982 for SS and SSDI quite recently) is that program revenue is increased rapidly and significantly (SS 1982, new Medicare taxes, 2010) or the trust fund shortfall is met with funds from other accounts (SSD I). Any benefit cuts are pushed decades out - the cuts to SS benefits put in place in 1982 are not even fully phased in yet for those retiring at full retirement age now!

The medicare trust fund (Part A) will deplete prior to the SS trust fund so we will have another history lesson to reflect on in the late 2020's.

I'm very surprised at the number of people in this thread believing that SS early claiming penalties and delayed claiming credits are actuarially neutral. They are not, even for those of average life expectancy. It's even more favorable for Boglehead demographics which I'd opine trends towards higher income, more education, better access to health care and less smoking than average. Also the higher income delaying strategy for a 2-benefit couple isn't actuarially offset and represents an additional free lunch given joint life expectancies. The lower earner who penalizes themselves by claiming early, inherits the higher earners benefit if they survive them. But it's good to look at the sensitivity of less than perfect claiming strategies. In...

I forget where I read it. It was years ago, but it was to the effect that people that claim at 62 receive on average the same benefit in total dollars received as those that delay until 70. They receive a smaller amount over a longer time frame. Those that delay have higher monthly payments but for a shorter time. Yes - that is how it is designed. You get around the same total amount assuming you die at the age in the SS actuarial table. Your bet is whether you will live past that age or not, if you're concerned about total lifetime benefits. If you are only interested in maximizing the annual benefit, then you would delay. That's not correct. If it were, the net present value calculations of claiming choices (which takes into account fewe...

Changes in interest rates and life expectancies since the delay credit rates were established in the early 1980's have tilted the equation in favor of delaying to at least FRA for the average person. For higher incomes, who experience significantly longer life expectancies, the equation is in favoring of delaying to 70 versus actuarial fairness. This paper does not consider the "free lunch" aspect of a couple with a significant difference in incomes and SS, further tilting the benefit in favor of delaying for that demographic. So no, the current level of credits are not an actuarial coin toss of indifference, especially for Bogleheads who likely benefit from high income and education and often benefit from the married higher/lower...

ITOT or SCHB would be appropriate tax loss harvesting ETF's for VTSAX. You do not need to wait 30 days or add complexity by buying multiple ETF's to replicate VTSAX. I suggest you practice selling a small amount of VTSAX and buying a small amount of either ITOT or SCHB to practice so you get an idea of how TLH'ing a mutual fund and purchasing an ETF works. Your sentence "I suppose I need to first set up my VTI fund before I can TLH into it" suggests you don't understand the basic mechanics of ETF's or how to purchase them. They are mutual funds that trade like a stock. They are not something you "set up" before purchasing them. You sell VTSAX and when the proceeds from that sale are "available to trade" you pur...

And meanwhile they still haven't fixed the minimum installment payment programming error for those not subject to RMD's. It took them months to even acknowledge it was a problem and no fix a month later. "We are in the process of addressing this issue." Sounds like they are incapable of trouble-shooting their own code in a timely manner. https://www.tsp.gov/news-and-resources/plan-news/ Posted: February 3, 2023 Temporary issue with installment payment requests — The TSP has a programming issue that is preventing some participants from setting up installment payments in the amount they desire. We are in the process of addressing this issue. In the meantime, a temporary work-around is for you to request partial withdrawals instead o...

I would leave it in the 2025 fund and just let it age into the L fund in a couple years. A bit of growth potential for a 13-year bridge fund doesn't seem too wild and crazy. Unlike many of the posters here, you have (in additional to a defined contribution account now and Social Security in the future), a FERS lifetime annuity starting at age 57 and a FERS annuity supplement which mimics a Social Security payment for age 57 till age 62. The value of these safe income streams is akin to a very substantial fixed income holding so you can afford to maintain a little bit of risk with your bridge fund. I'm assuming you are not on the bleeding edge of being able to afford retirement relative to fixed expenses with this suggestion. Personally my a...

batangueno wrote: ↑Wed Mar 01, 2023 9:19 pm Thank you. Yeah. I was surprised by the lack of a chat. Bogleheads think highly of Vanguard that's why I decided to switch. I thought there is no better place to buy VTI and BND than at Vanguard itself.

I doesn't make any difference for ETF's.
Schwab has exceptional customer service and IMO a good website.
A great Investor Checking account.

Schwab has higher expense ratios on Money Market Funds and you have to make sure to move any uninvested cash to their Money Market accounts (or CD's or T-bills). The default for cash is a low yielding FDIC bank sweep account.

One (or a couple of) the Boglehead podcasts discussed the advantages of delaying claiming (especially for the higher earner) and withdrawing more from portfolio for the years between retirement and claiming.

So assuming you have a decent portfolio to withdraw from, you aren't sacrificing in terms of lifestyle income during the early go-go years of retirement even if you delay SS to 70. The higher SS income pays you back for the higher portfolio withdrawals you made earlier.

We will claim at 62 (her) and 70 (me). Doing otherwise is (statistically) leaving money on the table from a maximum net present value perspective. Do the math and ignore hunches or rules of thumb. https://opensocialsecurity.com/ Doesn't delaying to 70 leave money on the table for a male? I presume Mike Piper has a better grasp of addressing that question than I do. His calculator does collect age, gender and PIA for each in a couple. Me claiming any sooner than 70 always decreases the net present value of our combined benefit and significantly so. Her claiming later has a very small impact on the NPV. She could delay 5 years and the our NPV is still 99.1% of optimum. Were I to claim 5 years earlier the NPV is roughly 90% of optimum.

We will claim at 62 (her) and 70 (me).
Doing otherwise is (statistically) leaving money on the table from a maximum net present value perspective.

Do the math and ignore hunches or rules of thumb.
https://opensocialsecurity.com/

Tbird59 wrote: ↑Tue Feb 28, 2023 2:55 pm I was able to successfully initiate and complete an installment payment based on a fixed amount on 2/27/2023. Worked pretty slick with no hiccups. Spouse had to docusign a consent, which was received right away via email. Seems to be a hit and miss situation. Three weeks prior, it was not even an option.

I read something a couple days ago in some fed newsletter than someone reported that the problem has been fixed.
So either it has, or your request was above the erroneous minimum.

I'm going to cancel my current "too high" installment this week and attempt to enter the lower amount that was failing.
I'll report back and if it works I would assume the whole issue has been fixed.

The problem is that they have (erroneously) linked installment payment minimums to some sort of an aged based RMD table even for people not subject to RMD's. This causes a much higher minimum installment payment than what it should be at $25. I am 60, obviously not subject to RMD's but experienced the same issue in January when I tried to change my installment payment amount. So the rep tries to enter an installment payment amount that is less than the erroneous minimum amount and the set-up transactions fails. Your spouse never gets the consent email because the installment payment was never actually entered. It has nothing to do with the email getting lost since it was never generated. A sharp-eyed rep who knows what to look for in terms ...

confusedinvestor wrote: ↑Mon Feb 27, 2023 10:20 pm

MnD wrote: ↑Mon Feb 27, 2023 7:02 pm I have a 26 week bill ladder of 6 bills, which one bill maturing every month which is rolled over to a new 26 week bill.
If some amazing investment opportunity arose (or massive unexpected expense) you can just sell the bills not yet matured on the secondary market.
Don't overthink it as it's not rocket science.

How did you create this ladder?

Buy a 26-week t-bill at auction every 4 weeks for 6 cycles.
Or just go into the secondary market and buy them all at once.

I have a 26 week bill ladder of 6 bills, which one bill maturing every month which is rolled over to a new 26 week bill.
If some amazing investment opportunity arose (or massive unexpected expense) you can just sell the bills not yet matured on the secondary market.
Don't overthink it as it's not rocket science.

So just make it a lot more simple and buy VTI whenever you want to.

I made a withdrawal of 529 funds of which I am the owner to myself. An adult non-dependant child is the beneficiary. The adult child completed this 4-course part-time graduate certificate program from an accredited higher educational institute. https://universitycollege.du.edu/ict/degree/certificate/cybersecurity-management-online/degreeid/572 The institution is a federal aid qualified institution, but the 4-course 6-month certificate programs are not eligible for federal aid nor are 1098-T's issued. I provided the funds to my child who applied all the funds towards the certificate tuition. I have a copy of the receipt from the University indicating the tuition and payment. In retrospect I should have issued the 529 payment to my son or to...

4.5 years ago I walked away from a great job with very good pay in my mid-50's. I had 40 consecutive years of work (including student jobs) and that was plenty. Regardless of how great your job is, you are getting paid to consume your human capital to solve other people's problems. That gets old and I found being at the top of my game consumed an increasing amount of my total energy as i got older. It was taking me almost all of the weekend to recover versus doing fun things. Priorities in retirement have been physical fitness, extensive travel, enjoying and improving our comfortable home and extensive gardens, getting adequate rest and sleep, regular connections with friends and extended family. I haven't felt the urge to take on any huge ...

I made a withdrawal of 529 funds of which I am the owner to myself. An adult non-dependant child is the beneficiary. The adult child completed this 4-course part-time graduate certificate program from an accredited higher educational institute. https://universitycollege.du.edu/ict/degree/certificate/cybersecurity-management-online/degreeid/572 The institution is a federal aid qualified institution, but the 4-course 6-month certificate programs are not eligible for federal aid nor are 1098-T's issued. I provided the funds to my child who applied all the funds towards the certificate tuition. I have a copy of the receipt from the University indicating the tuition and payment. In retrospect I should have issued the 529 payment to my son or to ...

You can enter to buy a 13 week or 26 week t-bill at Schwab right now for the Feb 27 auction which have settlement dates of March 2nd.
Your t-bills maturing on March 2nd will fund the purchase without any margin expense.

Don't use auto-rollover at Schwab. It is flawed (on purpose) and won't do the above. It will instead let your cash sit in their low interest FDIC settlement account for a week and purchase t-bills at the next weekly auction after your t-bills mature.

Your concerns about very short maturities are IMO misplaced. The 26 week and 52 week t-bills have already priced in most of the anticipated Fed rate hikes. That's why they are yielding over 5% (5.09% and 5.13%) when the Fed funds rate is at 4.5-4.75%.

Loandapper wrote: ↑Sat Feb 25, 2023 8:21 am So what happens with the earned interest? Let's say you have a $10k T Bill that earns $400 interest. Does the $10k get rolled over, but the $400 stays behind in the settlement account? Or will it purchase a new tbill worth $10,400?

The interest remains in the settlement account. Autoroll will purchase the same face value of the bills maturing (but at a discount).
For a 26-week t-bill autoroll, the discount is currently around $250 per $10,000 and that will remain in the settlement account.

In general that is correct. I have some early years with low earnings and had I kept working and replaced those with maxed out contributions it would have made almost no difference in benefits. You should do the calculation but I'll bet you will not move the needle much at all.

Two of these mutual funds (Vanguard and Invesco) track the same index (S&P 500) and the third (Schwab) does not. Anyone care to opine which TLH pairs would be considered substantially identical and which pairs would not? Explain your reasoning..... :wink: https://i.postimg.cc/RC2whGq4/Screenshot-2023-02-13-144105.png How does this exercise add to the conversation? No one knows what "would be considered" substantially identical since the term isn't defined and no one with authority (the IRS) is doing any considering. Several people have opined in this thread that it is NOT OK to exchange the red line and yellow line funds, but it is A-OK to exchange the yellow line fund with the blue line fund. So just some food for thought, a...

And while we can't know what is considered a wash sale we know some things. The IRS does not care about the statistical correlation between 2 securities. They never came close to asking that question. They always wanted to look under the hood for the specific securities involved. And yet there is no evidence of this ever occurring in the context of individual investors tax loss harvesting mutual funds pairs. Not in the financial media and not in the 7 million posts and 354,000 topics posted on this board. And according to the Propublica article, billionaires are comfortable with TLH'ing between different classes of the same security (like Google Class A and Class C shares) and they could find no evidence of that practice ever being challen...

Two of these mutual funds (Vanguard and Invesco) track the same index (S&P 500) and the third (Schwab) does not.
Anyone care to opine which TLH pairs would be considered substantially identical and which pairs would not?
Explain your reasoning.....

Avoiding a tax loss trade between two different mutual funds is like always carrying Bigfoot spray when hiking in remote mountainous areas. It might make you feel safer from a Bigfoot attack, but there is absolutely no evidence to support the possibility of such an attack. One cannot prove such an attack will never occur in the future, but unlike a bear or mountain lion attack, there is zero evidence. Anyone believing that different mutual funds _attempting_ to equal the returns of the same index (with no guarantee that they will be successful) before expenses are substantially identical should listen to the two Bogleheads podcasts linked below. They explain the complexity of index funds which in fact are actively managed and have hundreds ...

Given the trend among some Bogleheads at least to embrace increasingly ultra-conservative spending rates in retirement, the only thing that increasing or unexpected longevity is going to mean is likely dying with even more wealth. Nothing wrong with that but for a lot here, longevity is a plus for wealth versus a minus whereas it's often framed as a negative - ending up on Medicaid and eating awful things.

" The clearest sign that these sorts of trades do not, in the IRS’ eyes, violate the wash sale rule is that ProPublica could find no example of the agency challenging one." And if the IRS isn't going after billionaires swapping different variants of of the same company stock, they most certainty aren't going to go after Joe and Molly Bogleheads swapping different mutual funds. Index funds are very complex actively managed funds all striving (with hundreds of differences between them) to match the return of some index with zero guarantee they will be successful in that objective. If anyone thinks index funds from different providers are substantially identical, I suggest you listen to the two following Bogleheads podcasts regarding...

Sure you can afford it.
Watch out for intolerable winter and spring day to day living conditions. You are not on vacation 365 days a year.

The dynamic of higher end resort towns is not good. Locals resent the rich people who bring money from elsewhere or make big bucks with mouse clicks and will make a concerted effort to rip you off at every opportunity.

With your housing budget another alternative is moving to a community with much better and quicker access to the high country.
I'd probably move from Denver to Delta, Montrose or Cedaredge if DW was onboard with that.

unmesh wrote: ↑Tue Feb 07, 2023 8:53 pm I suppose what the Schwab rep said could be true and MnD is also correct that he had the funds available by settlement date, therefore not incurring margin interest.

Definitely have the funds on settlement date because the maturing T-bill date always matches the settlement date of the new bill.
I have a bit left over too since the issue price of the new bill is at a discount to the maturity value of the old bill.
Which I immeditely move to SWVXX.

... I have a 6-bill 26-week T-bill ladder without autoroll. Once a month I place an order for a replacement bill which takes about 15 seconds. The auction occurs on a Monday, but the settlement date isn't until Thursday which matches the maturity date of the old bill. I have a calendar entry to remind me to place the monthly order, but Schwab also sends an email alerting that a bond is getting close to maturity. Do you need to have a margin account to be able to place the order without settled funds or does Schwab know that the funds will be credited from the bond maturing? I don't know as I've always had margin enabled. While it does show a negative cash balance from Monday till Thursday, no interest is ever charges since the settlement d...

https://cfiresim.com/ is my favorite for this.

The 1906 to 1935 sequence was rough as was 1937-1966.
But nothing as bad as starting a 30-year sequence in the mid-1960's.

60/40 4% rule ER=.10
https://www.cfiresim.com/0eac4fbe-5898- ... a7fed26628

On 03 Feb 23, TSP posted on its website acknowledgement of programming issues involving installment payments. The proposed work-around is to take partial withdrawals but with two stipulations: minimum amounts must be $1000 and can only be done every 30 days. No ETA on a fix. I suspect this programming issue also is involved in reported missing RMD catch-up payments from the end of 2022 as well as tax withholding issues others have experienced. These "growing pains" with Accenture Federal is having real-world consequences to a number of folks in the system. I recommend those affected contact their Congressional Representative offices to report their issue(s) with TSP to alert them to these problems. While they may be generally awa...

... I have a 6-bill 26-week T-bill ladder without autoroll. Once a month I place an order for a replacement bill which takes about 15 seconds. The auction occurs on a Monday, but the settlement date isn't until Thursday which matches the maturity date of the old bill. I have a calendar entry to remind me to place the monthly order, but Schwab also sends an email alerting that a bond is getting close to maturity. Do you need to have a margin account to be able to place the order without settled funds or does Schwab know that the funds will be credited from the bond maturing? I don't know as I've always had margin enabled. While it does show a negative cash balance from Monday till Thursday, no interest is ever charges since the settlement d...

Autoroll at Schwab is flawed. They only submit the purchase order for a new bond after the old bond matures so you will be out of the market for numerous days on every autoroll. Schwab pays next to nothing on cash balances so they benefit from the gap between maturity of the old bill and the purchase and settlement of the replacement. ... This is great feedback since they are my primary trading account. Here's another data point. I tried setting up a ladder at schwab.com and it wouldn't let me make it a rolling one because "Secondary Treasury ladders are not eligible". What? If this is par for the course across brokerages, I may have to do it manually. No you can't purchase a bond on the secondary market at Schwab and have it set...