Best Vanguard Money Market Fund

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Topic Author
catchinup
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Best Vanguard Money Market Fund

Post by catchinup »

I read the finance buff's article,
https://thefinancebuff.com/best-vanguar ... rates.html

and looked at the MM optimizer calculator. The MM Optimizer is too complicated and confusing for me. Is there an MM Optimizer for Dummies?

I live in CA. According to my tax return provided by my accountant, my federal marginal rate is 32%, capital income tax is 15% state tax rate is 9.3, and effective federal tax rate says 22%. I thought I had a bit of NIIT last year but I don't know where to find it on my return and I'm not sure if that was factored into the marginal rates anywhere.
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retired@50
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Re: Best Vanguard Money Market Fund

Post by retired@50 »

catchinup wrote: Sun May 12, 2024 6:32 pm I read the finance buff's article,
https://thefinancebuff.com/best-vanguar ... rates.html

and looked at the MM optimizer calculator. The MM Optimizer is too complicated and confusing for me. Is there an MM Optimizer for Dummies?

I live in CA. According to my tax return provided by my accountant, my federal marginal rate is 32%, capital income tax is 15% state tax rate is 9.3, and effective federal tax rate says 22%. I thought I had a bit of NIIT last year but I don't know where to find it on my return and I'm not sure if that was factored into the marginal rates anywhere.
For you, and your tax Federal bracket, use VUSXX.

Most, (or maybe all) the interest won't be taxed by CA. The exact percentage that will avoid state level taxation won't be known until early 2025, so you have to take a small leap of faith. In 2023, it was 80% US Treasury interest, so only 20% of the interest would have been taxed by CA.

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
CoAndy
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Re: Best Vanguard Money Market Fund

Post by CoAndy »

I am a big fan of VUSXX.
billfromct
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Re: Best Vanguard Money Market Fund

Post by billfromct »

It’s interesting that no one mentions that the Vanguard Treasury MM Fund (VUSXX) 7 day SEC yield is currently 5.27%.

bill
Topic Author
catchinup
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Re: Best Vanguard Money Market Fund

Post by catchinup »

billfromct wrote: Sun May 12, 2024 7:40 pm It’s interesting that no one mentions that the Vanguard Treasury MM Fund (VUSXX) 7 day SEC yield is currently 5.27%.

bill
Does that impact the answer to my question?
billfromct
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Re: Best Vanguard Money Market Fund

Post by billfromct »

catchinup wrote: Sun May 12, 2024 9:12 pm
billfromct wrote: Sun May 12, 2024 7:40 pm It’s interesting that no one mentions that the Vanguard Treasury MM Fund (VUSXX) 7 day SEC yield is currently 5.27%.

bill
Does that impact the answer to my question?
It tells you what the Vanguard Treasury MM Fund interest rate is for the MM fund that a couple of people recommended.

I assumed you were looking at the “MM optimizer calculator” to pick a MM fund. I guess I assumed wrong.

bill
Topic Author
catchinup
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Re: Best Vanguard Money Market Fund

Post by catchinup »

billfromct wrote: Sun May 12, 2024 10:19 pm
catchinup wrote: Sun May 12, 2024 9:12 pm
billfromct wrote: Sun May 12, 2024 7:40 pm It’s interesting that no one mentions that the Vanguard Treasury MM Fund (VUSXX) 7 day SEC yield is currently 5.27%.

bill
Does that impact the answer to my question?
It tells you what the Vanguard Treasury MM Fund interest rate is for the MM fund that a couple of people recommended.

I assumed you were looking at the “MM optimizer calculator” to pick a MM fund. I guess I assumed wrong.

bill
Yes, I was looking at the MM optimizer but having trouble understanding how it worked and what the outputs were.
Topic Author
catchinup
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Re: Best Vanguard Money Market Fund

Post by catchinup »

retired@50 wrote: Sun May 12, 2024 6:51 pm
catchinup wrote: Sun May 12, 2024 6:32 pm I read the finance buff's article,
https://thefinancebuff.com/best-vanguar ... rates.html

and looked at the MM optimizer calculator. The MM Optimizer is too complicated and confusing for me. Is there an MM Optimizer for Dummies?

I live in CA. According to my tax return provided by my accountant, my federal marginal rate is 32%, capital income tax is 15% state tax rate is 9.3, and effective federal tax rate says 22%. I thought I had a bit of NIIT last year but I don't know where to find it on my return and I'm not sure if that was factored into the marginal rates anywhere.
For you, and your tax Federal bracket, use VUSXX.

Most, (or maybe all) the interest won't be taxed by CA. The exact percentage that will avoid state level taxation won't be known until early 2025, so you have to take a small leap of faith. In 2023, it was 80% US Treasury interest, so only 20% of the interest would have been taxed by CA.

Regards,
thanks!
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retired@50
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Re: Best Vanguard Money Market Fund

Post by retired@50 »

catchinup wrote: Sun May 12, 2024 11:00 pm
retired@50 wrote: Sun May 12, 2024 6:51 pm
catchinup wrote: Sun May 12, 2024 6:32 pm I read the finance buff's article,
https://thefinancebuff.com/best-vanguar ... rates.html

and looked at the MM optimizer calculator. The MM Optimizer is too complicated and confusing for me. Is there an MM Optimizer for Dummies?

I live in CA. According to my tax return provided by my accountant, my federal marginal rate is 32%, capital income tax is 15% state tax rate is 9.3, and effective federal tax rate says 22%. I thought I had a bit of NIIT last year but I don't know where to find it on my return and I'm not sure if that was factored into the marginal rates anywhere.
For you, and your tax Federal bracket, use VUSXX.

Most, (or maybe all) the interest won't be taxed by CA. The exact percentage that will avoid state level taxation won't be known until early 2025, so you have to take a small leap of faith. In 2023, it was 80% US Treasury interest, so only 20% of the interest would have been taxed by CA.

Regards,
thanks!
Happy to help. :beer

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
Yvy
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Re: Best Vanguard Money Market Fund

Post by Yvy »

retired@50 wrote: Sun May 12, 2024 6:51 pm
catchinup wrote: Sun May 12, 2024 6:32 pm I read the finance buff's article,
https://thefinancebuff.com/best-vanguar ... rates.html

and looked at the MM optimizer calculator. The MM Optimizer is too complicated and confusing for me. Is there an MM Optimizer for Dummies?

I live in CA. According to my tax return provided by my accountant, my federal marginal rate is 32%, capital income tax is 15% state tax rate is 9.3, and effective federal tax rate says 22%. I thought I had a bit of NIIT last year but I don't know where to find it on my return and I'm not sure if that was factored into the marginal rates anywhere.
For you, and your tax Federal bracket, use VUSXX.

Most, (or maybe all) the interest won't be taxed by CA. The exact percentage that will avoid state level taxation won't be known until early 2025, so you have to take a small leap of faith. In 2023, it was 80% US Treasury interest, so only 20% of the interest would have been taxed by CA.

Regards,
+1. Big fan of VUSXX.
bogles the mind
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Re: Best Vanguard Money Market Fund

Post by bogles the mind »

Newbee question. If I am holding money in my settlement fund (VMFXX) and decide to purchase VUSXX instead, is there a transaction fee?
Last edited by bogles the mind on Mon May 13, 2024 9:37 am, edited 2 times in total.
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retired@50
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Re: Best Vanguard Money Market Fund

Post by retired@50 »

bogles the mind wrote: Mon May 13, 2024 9:31 am Newbee question. If I am holding money in my settlement fund (VMFXX) and decide to purchase VUSXX instead, is their a transaction fee?
No, not if the account in question is at Vanguard.

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
bogles the mind
Posts: 61
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Re: Best Vanguard Money Market Fund

Post by bogles the mind »

retired@50 wrote: Mon May 13, 2024 9:33 am
bogles the mind wrote: Mon May 13, 2024 9:31 am Newbee question. If I am holding money in my settlement fund (VMFXX) and decide to purchase VUSXX instead, is their a transaction fee?
No, not if the account in question is at Vanguard.

Regards,
Thanks
Topic Author
catchinup
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Re: Best Vanguard Money Market Fund

Post by catchinup »

retired@50 wrote: Sun May 12, 2024 6:51 pm
Most, (or maybe all) the interest won't be taxed by CA. The exact percentage that will avoid state level taxation won't be known until early 2025, so you have to take a small leap of faith. In 2023, it was 80% US Treasury interest, so only 20% of the interest would have been taxed by CA.

Regards,
Can I assume the vanguard 1099 will tell me how much is Treasury interest vs not?
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retired@50
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Re: Best Vanguard Money Market Fund

Post by retired@50 »

catchinup wrote: Mon May 13, 2024 9:38 am
retired@50 wrote: Sun May 12, 2024 6:51 pm
Most, (or maybe all) the interest won't be taxed by CA. The exact percentage that will avoid state level taxation won't be known until early 2025, so you have to take a small leap of faith. In 2023, it was 80% US Treasury interest, so only 20% of the interest would have been taxed by CA.

Regards,
Can I assume the vanguard 1099 will tell me how much is Treasury interest vs not?
No, it won't appear on the 1099, but it does appear on a document Vanguard publishes each year (typically in Jan. or Feb). It's called "US Government Obligations Income Information".
Here is the link for the 2023 version: https://investor.vanguard.com/content/d ... n-2024.pdf

To find it, go to vanguard.com for Personal Investors, then go to Resources and Education -> Taxes.
https://investor.vanguard.com/investor- ... tion/taxes

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
mariezzz
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Re: Best Vanguard Money Market Fund

Post by mariezzz »

This thread discusses Vanguard funds and how the % invested in US gov't obligations changes from year-to-year. There are other threads as well if you search.
viewtopic.php?t=392869
Topic Author
catchinup
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Re: Best Vanguard Money Market Fund

Post by catchinup »

retired@50 wrote: Mon May 13, 2024 9:46 am
catchinup wrote: Mon May 13, 2024 9:38 am
retired@50 wrote: Sun May 12, 2024 6:51 pm
Most, (or maybe all) the interest won't be taxed by CA. The exact percentage that will avoid state level taxation won't be known until early 2025, so you have to take a small leap of faith. In 2023, it was 80% US Treasury interest, so only 20% of the interest would have been taxed by CA.

Regards,
Can I assume the vanguard 1099 will tell me how much is Treasury interest vs not?
No, it won't appear on the 1099, but it does appear on a document Vanguard publishes each year (typically in Jan. or Feb). It's called "US Government Obligations Income Information".
Here is the link for the 2023 version: https://investor.vanguard.com/content/d ... n-2024.pdf

To find it, go to vanguard.com for Personal Investors, then go to Resources and Education -> Taxes.
https://investor.vanguard.com/investor- ... tion/taxes

Regards,
thanks again!
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