VMSXX seasonal cycle, Roth, IRMAA

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Anovice
Posts: 74
Joined: Sun Sep 28, 2008 9:20 am

VMSXX seasonal cycle, Roth, IRMAA

Post by Anovice »

In early October, I deposited a significant amount of money in Vanguard Municipal Money Market. The daily yield in October ranged from a low of 2.10% to a high of 2.37%. The average was approximately 2.23%. The daily yield in November started out at 2.07% and has dropped to 1.80% today.

Regardless of the fluctuation in the yield for October and November, at the end of October my income from the fund was a known as it will be at the end of November.

December is a problem because along with CG estimates, dividend estimates, Inherited IRA RMD, annuity, etc., I must project the income from VMSXX for December. How do I go about guessing the yield so I can calculate the income for a Roth conversation and not to jump to the next IRMAA bracket?

Thank you.
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Kevin M
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Joined: Mon Jun 29, 2009 3:24 pm
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Re: VMSXX seasonal cycle, Roth, IRMAA

Post by Kevin M »

The cycles are not the same from year to year. I just researched this for another thread, and posted the results there: viewtopic.php?p=6979364#p6979364.

The the current downward leg is likely to reverse soon, and peak sometime in December, but I don't think anyone can predict exactly how it will go.

Have you compared your taxable-equivalent yield (TEY) for VMSXX to that of VUSXX? Here is the way it looks for me at 22% and 9.3% marginal tax rates:

Image

Clearly, VUSXX is more predictable, and currently has a much higher TEY for me, so that's what I'm using.

Kevin
If I make a calculation error, #Cruncher probably will let me know.
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