Upper Tax Bracket Folks...where to park cash?

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Jake Hogan
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Joined: Tue Mar 29, 2016 5:53 am

Upper Tax Bracket Folks...where to park cash?

Post by Jake Hogan »

I am in the highest tax bracket and am looking for some additional thoughts on where to park cash. Currently, using Marcus (Goldman Sachs) high yield on-line savings getting 160 basis points. Thanks for your help.
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Rager1
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Re: Upper Tax Bracket Folks...where to park cash?

Post by Rager1 »

Vanguard's Prime Money Market Fund's current SEC yield is 1.79%, compound yield is 1.80%.

Source: https://personal.vanguard.com/us/funds/ ... irect=true

Ed
Scotttheking
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Re: Upper Tax Bracket Folks...where to park cash?

Post by Scotttheking »

I’m using vanguard’s muni money market fund.
Steadfast
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Re: Upper Tax Bracket Folks...where to park cash?

Post by Steadfast »

As a California resident in the highest tax bracket, I use Vanguard California Municipal Money Market Fund (VCTXX), current SEC yield 1.43%. Because it's a state-specific muni fund, distributions are both state and federal tax exempt. I believe Vanguard offers these in certain other states as well, not sure where you reside.
We don't see things as they are, we see things as we are.
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triceratop
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Re: Upper Tax Bracket Folks...where to park cash?

Post by triceratop »

Rager1 wrote: Fri Apr 20, 2018 11:45 am Vanguard's Prime Money Market Fund's current SEC yield is 1.79%, compound yield is 1.80%.

Source: https://personal.vanguard.com/us/funds/ ... irect=true

Ed
This reads like a recommendation. Why do you recommend this given the tax-equivalent yield of Vanguard Municipal Money Market Fund is currently much higher? (1.13% vs 1.51%) It sounds like incorrect advice.

OP, what state do you live in? There may be state-specific muni money market funds which are even better than the Federal Muni MMF I mentioned above.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."
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Rager1
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Re: Upper Tax Bracket Folks...where to park cash?

Post by Rager1 »

triceratop wrote: Fri Apr 20, 2018 11:49 am
Rager1 wrote: Fri Apr 20, 2018 11:45 am Vanguard's Prime Money Market Fund's current SEC yield is 1.79%, compound yield is 1.80%.

Source: https://personal.vanguard.com/us/funds/ ... irect=true

Ed
This reads like a recommendation. Why do you recommend this given the tax-equivalent yield of Vanguard Municipal Money Market Fund is currently much higher? (1.13% vs 1.51%) It sounds like incorrect advice.

OP, what state do you live in? There may be state-specific muni money market funds which are even better than the Federal Muni MMF I mentioned above.
He asked for another option and I gave him one. Not recommending anything, just answering the question.

Ed
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Jake Hogan
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Re: Upper Tax Bracket Folks...where to park cash?

Post by Jake Hogan »

I live in Michigan.
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triceratop
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Re: Upper Tax Bracket Folks...where to park cash?

Post by triceratop »

Rager1 wrote: Fri Apr 20, 2018 11:51 am
triceratop wrote: Fri Apr 20, 2018 11:49 am
Rager1 wrote: Fri Apr 20, 2018 11:45 am Vanguard's Prime Money Market Fund's current SEC yield is 1.79%, compound yield is 1.80%.

Source: https://personal.vanguard.com/us/funds/ ... irect=true

Ed
This reads like a recommendation. Why do you recommend this given the tax-equivalent yield of Vanguard Municipal Money Market Fund is currently much higher? (1.13% vs 1.51%) It sounds like incorrect advice.

OP, what state do you live in? There may be state-specific muni money market funds which are even better than the Federal Muni MMF I mentioned above.
He asked for another option and I gave him one. Not recommending anything, just answering the question.

Ed
The implied question is what the best location is for after-tax yield. The Vanguard PMMF is not that and is not even the best option at Vanguard, just to be clear for the OP.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."
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Rager1
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Re: Upper Tax Bracket Folks...where to park cash?

Post by Rager1 »

triceratop wrote: Fri Apr 20, 2018 11:57 am
Rager1 wrote: Fri Apr 20, 2018 11:51 am
triceratop wrote: Fri Apr 20, 2018 11:49 am
Rager1 wrote: Fri Apr 20, 2018 11:45 am Vanguard's Prime Money Market Fund's current SEC yield is 1.79%, compound yield is 1.80%.

Source: https://personal.vanguard.com/us/funds/ ... irect=true

Ed
This reads like a recommendation. Why do you recommend this given the tax-equivalent yield of Vanguard Municipal Money Market Fund is currently much higher? (1.13% vs 1.51%) It sounds like incorrect advice.

OP, what state do you live in? There may be state-specific muni money market funds which are even better than the Federal Muni MMF I mentioned above.
He asked for another option and I gave him one. Not recommending anything, just answering the question.

Ed
The implied question is what the best location is for after-tax yield. The Vanguard PMMF is not that and is not even the best option at Vanguard, just to be clear for the OP.
I don't respond to implied questions.

Ed
RAchip
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Re: Upper Tax Bracket Folks...where to park cash?

Post by RAchip »

I keep a good bit of cash in the VG PMMF. I am in the highest tax bracket also (but in a state that is small and has no state specific muni fund). To my eye, the difference in net yield between PMMF and Municipal MMF is relatively small over time. With rates rising pretty quickly, I prefer to just put the cash in the PMMF and not worry about it.
jacoavlu
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Re: Upper Tax Bracket Folks...where to park cash?

Post by jacoavlu »

Depends on what you mean by “cash”. For me its been purepoint savings, though im shifting to short term new issue T bills for funds where I can give up a little liquidity, and VAnguards tax exempt bond ETF VTEB where im willing tk take a little bit of risk
grok87
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Re: Upper Tax Bracket Folks...where to park cash?

Post by grok87 »

i like the Vanguard treasury money market as it is exempt from state income tax and currently has a 1.56% sec yield. or you could buy 3 month tbills yielding 1.80%
RIP Mr. Bogle.
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