## Search found 2668 matches

Tue May 29, 2018 11:56 am
Forum: Investing - Help with Personal Investments
Topic: US Tres bill on Fidelity
Replies: 9
Views: 839

### Re: US Tres bill on Fidelity

I see under new issues on Fixed income on Fidelity a 3 months US Tres 3 months zero coupon with expected yield of 1.9% and settlement of 5/31/2018. This auction took place earlier today. As shown on the auction results PDF file the yield ("High Rate") came in at 1.895%. The corresponding "Investmen...
Mon May 28, 2018 1:51 pm
Forum: Investing - Theory, News & General
Topic: The Savings Rate Grid
Replies: 47
Views: 7041

### Re: The Savings Rate Grid

Question on the net worthify calculator - does it assume that your income is gross? ... Yes, the savings rate you enter should be your pre-tax savings rate (i.e. the amount you're saving divided by your gross income). An implicit assumption is that your tax rate will be the same in retirement as be...
Sun May 27, 2018 10:55 am
Forum: Investing - Theory, News & General
Topic: The Savings Rate Grid
Replies: 47
Views: 7041

### Re: The Savings Rate Grid

Savings Rate --- 00%---- 15.60 Years to FI Savings Rate --- 10%---- 13.00 Savings Rate --- 20%---- 11.70 Savings Rate --- 30%---- 10.30 Savings Rate --- 40%----- 9.40 Snowjob, I don't see how you can get these numbers with the Networthify calculator referenced in willthrill81's first post . Assumin...
Fri May 25, 2018 3:44 pm
Forum: Personal Finance (Not Investing)
Topic: I need some math help-calculating interest savings
Replies: 31
Views: 1780

### Re: I need some math help-calculating interest savings

Total interest reduction. 181320 - 95893.01 = 85426.99 I also get about \$85,000 by comparing the total payments on the original loan terms against the total payments on the accelerated recast loan. To simplify and make all the numbers consistent I assume: 4.25% 30-year \$235,200 loan Make two regula...
Tue May 22, 2018 8:05 am
Forum: Investing - Help with Personal Investments
Topic: Have Annuity Rates Gone Up?
Replies: 15
Views: 1872

### Re: Have Annuity Rates Gone Up?

We can use the Excel PMT function to estimate what the effect of higher interest rates would be. For example, the following table shows the estimated payout over various years at 3% and 4%. The increase in payout ranges from 0.54% to 0.76% points depending on years. For comparison I've included toda...
Mon May 21, 2018 9:51 am
Forum: Investing - Theory, News & General
Topic: Discontinuity and marginal vs effective rates
Replies: 39
Views: 2083

### Re: Discontinuity and marginal vs effective rates

Defining the SS Hump as the range of non-Social Security income subject to a marginal tax rate of 40.7% [*], the following table shows w[h]ere it lies for various amounts of SS benefit: … In my opinion, we need to be careful to let people know that there are two issues which will change this calcul...
Sun May 20, 2018 1:34 pm
Forum: Investing - Theory, News & General
Topic: Do I understand duration correctly?
Replies: 33
Views: 2787

### Re: Do I understand duration correctly?

Take a bond fund with a duration of 5 in a rising interest rate environment. Year 1, interest rates increase by 1%. Bond fund should recover in 5 years. Year 2, interest rates increase by another 1%. Bond fund now requires 9 years to recover. It takes much less than nine years to "recover" after tw...
Sat May 19, 2018 10:45 pm
Forum: Investing - Theory, News & General
Topic: Discontinuity and marginal vs effective rates
Replies: 39
Views: 2083

### Re: Discontinuity and marginal vs effective rates

Many will never encounter the [Social Security] Hump and others will blow past it in the blink of an eye with no means by which to avoid it. Others are in the middle and can efficiently plan for it. Defining the SS Hump as the range of non-Social Security income subject to a marginal tax rate of 40...
Fri May 18, 2018 9:01 am
Forum: Personal Finance (Not Investing)
Topic: When to claim Social Security: two reasons not to wait
Replies: 68
Views: 12549

### Re: When to claim Social Security: two reasons not to wait

1. When I use cfiresim or firecalc, I get the same income (within 2%) whether I use age 62, 67, or 70 to start SS. This is for covering my wife and me until we're 110/105, ... I think what's happening is the earlier SS helps mitigate unfavorable sequences of return in my other retirement savings. G...
Wed May 16, 2018 12:15 pm
Forum: Personal Finance (Not Investing)
Topic: When to claim Social Security: two reasons not to wait
Replies: 68
Views: 12549

### Re: When to claim Social Security: two reasons not to wait

(... I'm 64 and my wife is 63 this year. We are planning to both wait until 70 to start our benefits. ...) ... I would take a good look at the numbers ... Thanks. I have looked at the numbers several ways - with my wife starting benefits at 62, 66.4 (her FRA) and 70. My analysis and http://maximize...
Mon May 14, 2018 11:53 am
Forum: Personal Finance (Not Investing)
Topic: When to claim Social Security: two reasons not to wait
Replies: 68
Views: 12549

### Re: When to claim Social Security: two reasons not to wait

So I started taking SS at 62 which was 6 years ago. Guess because of the market run up over that time, I've done OK. I'm happy I took it @62. :happy Whether taking early turns out better financially depends on future returns and longevity. The following table shows for given past and future returns...
Sat May 12, 2018 3:07 pm
Forum: Personal Finance (Not Investing)
Topic: When to claim Social Security: two reasons not to wait
Replies: 68
Views: 12549

### Re: When to claim Social Security: two reasons not to wait

If you compare the full benefits for age 63 vs age 66, break even does not happen until age 77. When you consider the net benefits, how much did you get from the Federal Government after tax, break even happens at age 73 and 4 months, 42 months earlier! You're making two mistakes here, PapaGeek. Th...
Fri May 11, 2018 4:49 pm
Forum: Investing - Theory, News & General
Topic: TIPS yield curve
Replies: 14
Views: 2778

### Re: TIPS yield curve

The following table shows my attempt to arrive at an estimate of what the real yield would be if TIPS were indexed according to the seasonally adjusted CPI. ...To create this spreadsheet: Select All, Copy, and Paste the following at cell A1 of a blank Excel sheet: ... Select All, Copy, and Paste th...
Tue May 08, 2018 12:23 pm
Forum: Personal Finance (Not Investing)
Topic: 100%, 75%, 50% Joint & Survivor?
Replies: 17
Views: 1841

### Re: Which PERS Benefit Option would be best?

I'm glad to hear that we are on the right track with Option 6. ... I'm now trying to decide between 100%, 75% and 50% . If I understand your reply correctly, from a "purely financial" perspective, all three of these Joint and Survivor options are similar from a cost or present value standpoint? My ...
Mon May 07, 2018 10:22 pm
Forum: Personal Finance (Not Investing)
Topic: 100%, 75%, 50% Joint & Survivor?
Replies: 17
Views: 1841

### Re: Which PERS Benefit Option would be best?

I ran five of the options through my longevity estimator and the present values (PV) of the survival-weighted payments came out about the same (\$649,000 to \$665,000) when discounted at 4%. These are for a 59 year old woman and 63 year old man both with mortality probabilities based on the SSA 1960 C...
Sat May 05, 2018 3:36 pm
Forum: Investing - Theory, News & General
Topic: TIPS yield curve
Replies: 14
Views: 2778

### Re: TIPS yield curve

... it appears that there is no simple shortcut to avoid doing the seasonal adjustment calculations. Bummer. I thought I'd come up with a simple way to approximate the seasonally adjusted real yield. But then I ran a test with a 7/17/2017 settlemnt date and the simple method failed. So now I'm goin...
Thu May 03, 2018 8:15 pm
Forum: Investing - Theory, News & General
Topic: TIPS yield curve
Replies: 14
Views: 2778

### Re: TIPS yield curve

I had composed this post in response to this post by Kevin M in another thread, part of which is quoted here. But since that thread dealt with I Bonds, it's probably better to post my response here. I don't understand enough about TIPS to explain it, but maybe #Cruncher or another TIPS expert can, b...
Thu May 03, 2018 9:12 am
Forum: Investing - Theory, News & General
Topic: Question : Tax on reissued TIPS sold at discount.
Replies: 4
Views: 321

### Re: Question : Tax on reissued TIPS sold at discount.

... how is the discount at purchase treated? Does one get issued a 1099-B at maturity and pay a capital gain tax on the purchase discount, ie. 100-98 = \$2? Basically yes if the TIPS is held in a taxable account. But the amount reflects the inflation factor at time of issue; and it is reported as in...
Wed May 02, 2018 10:28 am
Forum: Investing - Theory, News & General
Topic: I-bond fixed rate = 0.3%
Replies: 62
Views: 8626

### Re: I-bond fixed rate = 0.3%

When I log in as of today and see my i Bonds from 2012 and 2013 it shows a 2.48% interest rate. ... Those I Bonds with a current interest rate of 2.48% have a 0% fixed rate. That current interest rate is calculated using the semi-annual inflation adjustment set in Nov 2017 [1.24%], not the one set ...
Tue May 01, 2018 10:39 am
Forum: Investing - Theory, News & General
Topic: I-bond fixed rate = 0.3%
Replies: 62
Views: 8626

### Re: I-bond fixed rate = 0.3%

For those interested, here are the composite rates that will take effect from May 2018 to October 2018 [ 1 ] and run for six months for all outstanding I Bonds, including newly issued ones with a 0.30% fixed rate (see TreasuryDirect News Release ). [ 2 ] They incorporate the new semi-annual inflatio...
Mon Apr 30, 2018 11:42 am
Forum: Investing - Help with Personal Investments
Topic: Treasury Bill Question
Replies: 2
Views: 740

### Re: Treasury Bill Question

What's the difference between "bank discount" and "coupon equivalent" for a Treasury Bill here?: https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=billrates The notes at the bottom of the web page you reference explains this: The Bank Discount rate i...
Sun Apr 29, 2018 5:28 pm
Forum: Personal Finance (Not Investing)
Topic: Calculating net present value of a govt pension
Replies: 16
Views: 2654

### Re: Calculating net present value of a govt pension

I assume I'll collect for 30 years before "checking out" ... Its not inflation adjusted for the first 6 years and "roughly" CPI-1% adjusted starting for year 7 through year 30. ... So I think i need to calculate ... the NPV [Net Present Value] of a 6-year annuity using a discount rate appropriate f...
Thu Apr 26, 2018 9:24 am
Forum: Investing - Help with Personal Investments
Topic: Calculating Average Share Price - account for previous sales?
Replies: 4
Views: 482

### Re: Calculating Average Share Price - account for previous sales?

Second question is - If I do need to account for shares previously sold, then how do I do it[?] :? Yes, you need to account for the shares that are sold. The way to do this is shown in the following example of two purchases, a sale, another purchase, and a final sale of the remaining shares: # Shar...
Wed Apr 25, 2018 3:12 pm
Forum: Investing - Help with Personal Investments
Topic: Help needed with a loan/payoff scenario.
Replies: 16
Views: 1086

### Re: Help needed with a loan/payoff scenario.

Let's say you were paying \$200 extra each month on a loan with a 5% interest rate. You stopped for 6 months but then made a \$1200 lump sum extra payment (\$200 x 6 months) to make up for the difference. The additional cost of suspending payments is therefore limited to \$200 x 5% x 6 months, or \$30. ...
Sat Apr 21, 2018 12:38 pm
Forum: Investing - Help with Personal Investments
Topic: Anyone invest in I Bonds and why?
Replies: 44
Views: 6424

### Re: Anyone invest in I Bonds and why?

Spouse and I purchased ... due to ... (4) being able to defer interest income at a time of high tax rates to a point when we suspected our rates would be lower ... The ability to defer taxes on I Bonds is a benefit even when the tax rate remains the same over time. But it is extra advantageous if t...
Fri Apr 20, 2018 9:58 am
Forum: Investing - Help with Personal Investments
Topic: Anyone invest in I Bonds and why?
Replies: 44
Views: 6424

### Re: Anyone invest in I Bonds and why?

Two times a year, in April and October, after the March and September CPI data is out, one knows how much they will pay for 12 months. This is only true for I Bonds purchased in April or October. As shown below, the known composite rate horizon is shorter for purchases in other months. (See When do...
Mon Apr 16, 2018 12:32 am
Forum: Investing - Theory, News & General
Topic: Do the math on savings rate vs. portfolio return rate
Replies: 1
Views: 752

### Re: Do the math on savings rate vs. portfolio return rate

The referenced article includes a footnote 1 Both of these examples assumes a 3% increase in wages per year but a static savings rate as a percentage of income. Since the thread title says "Do the math ...", here is the formula from Finance Formulas as shown in this post that accounts for the 3% ann...
Thu Apr 12, 2018 11:26 pm
Forum: Investing - Theory, News & General
Topic: I Bond’s Variable Rate Will Fall To 2.22% On May 1
Replies: 36
Views: 5084

### Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

I use eyebonds.info to value my I bonds each month. Of course, this site does not take into account the 3 month penalty if you redeem before 5 years. The link may not work as alpenglow posted it. If so, try eyebonds.info/ibonds . To "take into account the 3 month penalty if you redeem before 5 year...
Mon Apr 09, 2018 11:17 pm
Forum: Personal Finance (Not Investing)
Topic: Mandatory IRA Distributions at 70 1/2
Replies: 6
Views: 1142

### Re: Mandatory IRA Distributions at 70 1/2

Off the top of my head, let's change #Cruncher's example to make 70th birthday in December, so there's a full 12 months of SS benefits in year 1. Also, let's make the RMD \$50K instead of \$20K. The top of your head is right on, dodecahedron! In this case the total two year tax is indeed less when th...
Mon Apr 09, 2018 4:45 pm
Forum: Personal Finance (Not Investing)
Topic: Mandatory IRA Distributions at 70 1/2
Replies: 6
Views: 1142

### Re: Mandatory IRA Distributions at 70 1/2

While deferring is usually not the best choice because you will then have to take 2 RMDs in the second year, in some cases it can reduce your total tax bite for both years combined. When that occurs it is usually due to how SS income is taxed. Alan, could you please give an example of how taxes mig...
Sun Apr 08, 2018 1:02 pm
Forum: Investing - Help with Personal Investments
Replies: 2
Views: 259

I expected I would be reporting a capital loss on the bonds due to not reporting ABP [amortization of bond premium] in 2012 and 2013. However, the basis that Vanguard provided on my 1099 exactly equals the proceeds For Schedule D I'd report the cost basis equal to the proceeds with a consequent \$0 ...
Fri Apr 06, 2018 10:42 am
Forum: Investing - Help with Personal Investments
Topic: Question on dreaded 1099 OID tips in fund
Replies: 3
Views: 376

### Re: Question on dreaded 1099 OID tips in fund

No, you don't escape the OID by investing in a fund instead of individual TIPS. You're wrong here, Nisi. Holders of individual TIPS held in a taxable account will receive a 1099-OID. However, holders of a TIPS fund (or a fund like Vanguard Target Retirement Income Fund - VTINX that itself holds a T...
Thu Apr 05, 2018 8:21 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 174
Views: 19004

### Re: 30 yr tips auction 2/15: 1.0% yield?

It's not cost effective for the insurance company to immunize the real annuities, which is done separately with TIPS instead of nominal Treasuries, when the demand for the product is so low. I agree that demand for inflation-indexed annuities is low. I believe part of the reason is that they provid...
Wed Apr 04, 2018 5:01 pm
Forum: Investing - Help with Personal Investments
Topic: Magic Number - Approach considering Social Security and Pension
Replies: 14
Views: 2122

### Re: Magic Number - Approach considering Social Security and Pension

It's easier in my mind if you would just leave out inflation in your calculations. Do everything in age 55 dollars. This is made less easy by the \$14,000 pension starting at age 65 which I assume is not inflation-indexed. To do everything in age 55 dollars we need to convert the pension to that bas...
Tue Apr 03, 2018 8:28 pm
Forum: Personal Finance (Not Investing)
Topic: I-bonds and the IRS
Replies: 3
Views: 1516

### Re: I-bonds and the IRS

[In reply to email inquiry, TreasuryDirect said] "This means in order to get the new interest rate you would have to wait to submit your taxes until May." If the rate is increased on 11April that is what I will do. Knowing the rate determined by the BLS CPI announcement April 11th (see this schedul...
Sat Mar 31, 2018 4:26 pm
Forum: Personal Finance (Not Investing)
Topic: Calculating monthly interest on CD for cashflow..APY v. APR
Replies: 3
Views: 366

### Re: Calculating monthly interest on CD for cashflow..APY v. APR

Does anyone have a good spreadsheet or formula for calculating monthly interest on a CD or other cash investment? Here's a simple spreadsheet you can build. I checked it (through 3/29/2018) against a CD that I've had for 11 months at Capital One. Note how after one year (365 days), the balance will...
Fri Mar 30, 2018 2:34 pm
Forum: Investing - Theory, News & General
Topic: Consistent Yield & Duration to Help Choose TIPS Fund
Replies: 93
Views: 22481

### Re: Consistent Yield & Duration to Help Choose TIPS Fund

I've updated the Yield to Maturity and Duration Calculator with WSJ TIPS Prices 3/29/2018 [1] and the weighting effect of the 10-year auctions in January & March and the 30-year auction in February. As shown in the table below, the weighted average yield of the bonds in the 1+ years broad index is 0...
Thu Mar 29, 2018 12:47 pm
Forum: Personal Finance (Not Investing)
Replies: 12
Views: 1442

### Re: SS Taxation -Please Clarify

After reading the Bogleheads wiki on the subject [Taxation of Social Security benefits] ... \$90,000 AGI [?] exceeds couple's upper base of \$44,000 so 85% of SS is taxable, 85% of \$20,000 = \$17,000 Your \$90,000 is correct. (However it is not called AGI (Adjusted Gross Income) -- that refers to somet...
Wed Mar 28, 2018 7:08 am
Forum: Personal Finance (Not Investing)
Topic: Can someone list all the benefits of "FRA" ? [vs taking SS one month before FRA]
Replies: 12
Views: 1236

### Re: Can someone list all the benefits of "FRA" ? [vs taking SS one month before FRA]

Here is a month by month breakdown of the exact percentages: [How Your Social Security Benefit Is Reduced] Here is similar information showing the benefit per \$1,000 of Primary Insurance Amount (PIA) depending on how many months one claims before the Normal (aka Full) Retirement Age (NRA). It also ...
Mon Mar 26, 2018 2:04 pm
Forum: Investing - Help with Personal Investments
Topic: Treasury Bills vs. I-bonds vs. Intermediate-term tax-exempt muni bonds
Replies: 24
Views: 4158

### Re: Treasury Bills vs. I-bonds vs. Intermediate-term tax-exempt muni bonds

[The formula =B1*(1+B7)^IF(B2<5,B2-0.25,B2) ] implicitly assumes that the I bond is held only 12 months. Otherwise that yield loss should be amortized across the (unknown) holding period. No, the formula is correct and works for any period of one year or more. The penalty for redeeming before five ...
Mon Mar 26, 2018 1:10 pm
Forum: Personal Finance (Not Investing)
Topic: When to Take Social Security (again...)
Replies: 62
Views: 6229

### Re: When to Take Social Security (again...)

Here's a thread from a few years ago, arguing you can spend MORE in your 60s if you delay ... Here is an illustration where a single taxpayer delaying SS to age 70 can have \$10,000 MORE to spend (after federal income tax) each year from age 62 to 70 and also live slightly longer before running out ...
Sun Mar 25, 2018 9:52 am
Forum: Investing - Help with Personal Investments
Topic: Treasury Bills vs. I-bonds vs. Intermediate-term tax-exempt muni bonds
Replies: 24
Views: 4158

### Re: Treasury Bills vs. I-bonds vs. Intermediate-term tax-exempt muni bonds

I am trying to decide between putting \$10,000 into a 2-year bank CD earning 2.55% or an I-bond currently earning 2.58%. I am in the 12% federal tax bracket (filing jointly) and I would either pay an additional 3.07% state income tax on the CD or forfeit 3 months of interest on the I-bond (by redeem...
Sat Mar 24, 2018 9:53 pm
Forum: Personal Finance (Not Investing)
Topic: Chris Hogan's Retirement Calculator
Replies: 10
Views: 3687

### Re: Chris Hogan's Retirement Calculator

... assuming 2.75% inflation, ROR = 12% and a 6% withdrawal rate. Here is what the calculator appears to do: Takes the \$120,000 and inflates it to \$270,792 using 30 years and 2.75% inflation rate which is good. Then it simply divides the \$270,792 by 6% to get the \$4,513,200. So If I change the with...
Fri Mar 23, 2018 4:26 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage and Social Security Question
Replies: 5
Views: 964

### Re: Mortgage and Social Security Question

If your life expectancy is 20 years, then losing one year of SS is a 5% reduction in the 8% benefit, for a net real return of 3%. The return depends on both life expectancy and the age at which one delays one year. For example, assume one will die at age 86 and one's Normal Retirement Age (NRA) is ...
Fri Mar 23, 2018 1:07 pm
Forum: Investing - Help with Personal Investments
Topic: Treasury Bills vs. I-bonds vs. Intermediate-term tax-exempt muni bonds
Replies: 24
Views: 4158

### Re: Treasury Bills vs. I-bonds vs. Intermediate-term tax-exempt muni bonds

2) I-bonds: ... I know the historical rates fluctuate: http://www.ibonds.info/I-Bond-Rates/I-Bond-Composite-Rate.aspx. The graph on this webpage shows the history of "Initial Composite Rates". A much more useful graph in my opinion is the one of historical fixed rates on this webpage . I would use ...
Thu Mar 22, 2018 3:35 pm
Forum: Personal Finance (Not Investing)
Topic: Present Value of a FERS Pension with a Spousal Benefit
Replies: 7
Views: 1056

### Re: Present Value of a FERS Pension with a Spousal Benefit

Here are the numbers I think are relevant. ... I’m the annuitant and I’m 62.6 years old. My wife is 59.8 years old. The unreduced annual pension amount is \$65,700 [\$5,475/mo]. The reduced annual pension amount, after deducting for the spousal benefit, is \$59,100 [\$4,925/mo] ... If I predecease my w...
Wed Mar 21, 2018 12:00 pm
Forum: Investing - Help with Personal Investments
Topic: Treasury Bill Rates
Replies: 32
Views: 3995

### Re: Treasury Bill Rates

... one month T Bills, currently returning approximately 1.7%. Is that percentage the equivalent rate I would receive over a year? Roughly yes. The precise return over a 365-day year would be 1.740% calculated as follows: First, using the Treasury's formula , determine the price corresponding to a ...
Thu Mar 15, 2018 9:15 am
Forum: Investing - Help with Personal Investments
Topic: Is my math wrong? - How much should I save monthly?
Replies: 26
Views: 2803

### Re: Is my math wrong? - How much should I save monthly?

... this site: https://www.bankrate.com/calculators/savings/saving-goals-calculator.aspx is estimating more like \$1,250. To be precise the Bankrate calculator returns \$1,234.96 (with "Amount of first deposit" = \$54,000). This one gives 1250.70 https://www.thecalculatorsite.com/finance/calculators/s...
Thu Mar 08, 2018 10:34 pm
Forum: Investing - Help with Personal Investments
Topic: Quick bond pricing + effective duration question
Replies: 9
Views: 1043

### Re: Quick bond pricing + effective duration question

I was able to duplicate the \$100 price of the bond in that Investopedia article by valuing a temporary 10-year immediate annuity of \$6 per year plus the final payment of \$100 at the end of the 10th year using an interest rate of 6% per year Yes, the price will indeed be \$100 for a ten-year bond wit...
Tue Mar 06, 2018 11:38 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio Checkup: What have I missed? Some questions (pension buyout, DW SSA filing)
Replies: 14
Views: 1050

### Re: Portfolio Checkup: What have I missed? Some questions (pension buyout, DW SSA filing)

A pension question! Starting at age 55, I am eligible to collect a pension ... With the 100% joint/survivor selection, the monthly payment is \$353 at age 55. At age 62, the monthly payment would be \$462/month. The pension is not inflation adjusted. ... at age 55 ... I can take a one-time buyout of ...