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The 3.54% was still better than even HMBradley's 3% so I maxed out my 2021 I bonds at the end of October, locking in 6 months of 3.54% and 6 months of 7.12% at minimum. Even if the new rate for May-Nov 2022 is 0%, buying before May 1st next year (if you're able) will lock in 3.56% average for 12 months (7.12% for 6, 0% for 6), which is almost certainly going to be better than any HYSA right now. It's the best 12+ month "CD" out there at the moment if you can tolerate the lockup period. Also I sold an old EE bond that had matured this year and the money was ACH'd into my checking account the next business day in case anyone was wondering about the turnaround time.
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Dec 29, 2021 20:26
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Just set up my treasury direct account, no medallion stamp poo poo needed. I'd encourage anyone who thinks today might be too late to at least give it a shot and see if you'll be required to do extra paperwork or not.
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Dec 29, 2021 21:08
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Yeah I set up treasury accounts for 4 people including myself this year and never had to deal with any stamp. Account created and funds transferred the next day. e: though one way it seems you are guaranteed to have to send in paperwork is if you change the connected bank account. Mu Zeta fucked around with this message at 21:25 on Dec 29, 2021 |
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Dec 29, 2021 21:10
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Some more questions about I bonds: 1. If you withdraw after one year but before five years, the penalty is losing the last three months of interest. How does this interact with the fact that interest is normally compounded semiannually; do you just divide the applicable interest rate by twelve to get the interest for any "leftover" months? For example, let's assume that your initial investment was in November 2020, so interest was added to your I bonds at the end of October 2021 and when the 7.12% rate was announced in November 2021 it kicked in immediately for you. You withdraw in March 2022, so you're losing the interest your I bonds would have earned from December 2021 through February 2022 but still getting the interest for November 2021. When you withdrew, would you get an instant 0.5933333333% (7.12% / 12) increase in the value of your I bonds over how they were valued at the end of October to account for November's interest? 2. Is there anywhere on TreasuryDirect where you can easily track how much of the value of your bonds you can withdraw without penalty and how much would be subject to the 3-month penalty? 3. I bonds have a fixed rate that's added to the interest rate throughout the life of the bond. The fixed rate was as high as 3% back in the late 90s/early 00s but has mostly hovered around 0% in recent years, although it did rise to 0.5% as recently as 2018/2019. What determines when this fixed rate is raised/lowered? Just whenever the Treasury Secretary or whoever decides that people need more/less of an incentive to purchase I bonds, or are there specific factors that go into it?
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Dec 29, 2021 23:58
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I've been saving for a down payment on a house. My timeline is 3-5 years. I've been throwing it all into my savings account, which has a terrible rate. Should I be looking at a different vehicle for it? I was considering some kind of state bond/money market fund (I live in CA, so VCTXX for example) for the tax advantage. Does that idea make sense? Is there something else I should be looking at?
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Dec 30, 2021 04:26
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For a 3-5 year timeline your savings account is probably fine.
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Dec 30, 2021 04:28
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Solumin posted:I've been saving for a down payment on a house. My timeline is 3-5 years. I've been throwing it all into my savings account, which has a terrible rate. Should I be looking at a different vehicle for it? dexter6 fucked around with this message at 05:15 on Dec 30, 2021 |
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Dec 30, 2021 05:10
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Atahualpa posted:Some more questions about I bonds: The answer to both of these questions is that the interest accrues with a 3 month delay for the first 5 years (so for example, at year 1 you'd see 9 months of interest credited to the bond). The value you see on treasury direct is always the value you'd get to withdraw immediately for this reason.
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Dec 30, 2021 06:28
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Heh, that makes a lot of sense actually.
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Dec 30, 2021 14:52
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The dividend distribution for my Vanguard International was super huge this year. I think it dwarfs 2020. Kind of shocking but I guess it was a weird year.
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Dec 30, 2021 21:21
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I've been having a real bad habit of looking at my accounts the last few months. I decided to not look for the month of December and only look when I'm making my Roth IRA contributions on January 1st. Going to try and not look at them for another few months after that.
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Dec 30, 2021 21:50
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I took a huge pay cut this year and next year will be the first year in a while I won’t be able to max my 401k. Is it ever advisable to sell taxable (long term) investments to cover expenses in order to max out my 401k? Edit: I’m 37 and FI, but will probably just work my whole life. dexter6 fucked around with this message at 22:50 on Dec 30, 2021 |
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Dec 30, 2021 22:34
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I would do it. Even if you're 50 right now that's a lot of time for tax free growth.
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Dec 30, 2021 22:43
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I would never pay taxes to avoid taxes, especially if you're a lower earner now and the traditional 401k benefit won't be as significant ... If it's a Roth 401k, though... this might be a good time to get some low tax dollars in there. Just pinch pennies IMHO
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Dec 30, 2021 22:58
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Leperflesh posted:Just set up my treasury direct account, no medallion stamp poo poo needed. I'd encourage anyone who thinks today might be too late to at least give it a shot and see if you'll be required to do extra paperwork or not. 
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Dec 31, 2021 01:20
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My uncle is a life insurance salesman so I have to occasionally listen politely to his sales talk then politely decline. I realized this year that the sales pitch is pretty much entirely about persuading well-off people that their main goal should be to pay slightly less taxes during retirement.
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Dec 31, 2021 04:28
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withak posted:My uncle is a life insurance salesman so I have to occasionally listen politely to his sales talk then politely decline. I realized this year that the sales pitch is pretty much entirely about persuading well-off people that their main goal should be to pay slightly less taxes during retirement. "I don't do business with family" is how I avoid these conversations entirely.
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Dec 31, 2021 04:48
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Sardonik posted:And in the unlikely event capitalism is overthrown in our lifetimes? Well poo poo, all the better, perhaps what comes next would be better than the values of our retirement accounts anyway. What comes next is suffering and death.
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Dec 31, 2021 06:44
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bird with big dick posted:What comes next is suffering and death. Nuclear war could do it, so yeah suffering and death sounds about right
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Dec 31, 2021 07:08
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Solumin posted:I've been saving for a down payment on a house. My timeline is 3-5 years. I've been throwing it all into my savings account, which has a terrible rate. Should I be looking at a different vehicle for it? While that's fairly safe, it's also hardly returning enough to bother with, at least since 2019 or so. dexter6 posted:A Vanguard Life Strategy fund, particularly VASIX *might* make sense (consider the increase in risk, though). This isn't an awful suggestion either, but it's an 80% bonds/20% stocks income index fund, intended to produce income - which, if held in a taxable account, will be taxable. Seems like kind of a random suggestion? Solumin, I can understand wanting to at least preserve your down payment from inflation, and doing something extremely safe like CDs or government bonds wouldn't be terrible. But consider the case where there's a sudden significant downturn in asset prices, say, a year before you wanted to buy. Would you be able to delay your purchase for however many years it takes for prices to recover, or alternatively, buy less house/pull more money from other sources to make up the gap? Basically, you need to figure out what your risk tolerance is for this money. Leaving it entirely in savings is a reasonable risk-averse approach. If you do feel you have more tolerance for risk (exposure to volatility), there's sort of a ladder of increasing risk you can climb, starting with probably-doesn't-even-keep-up-with-inflation stuff like CDs or 5-year treasury bonds, then maybe to a bond fund, then maybe some kind of mix of bonds & stocks, and so forth. Depending on the size of your down payment (and whether you're married?) maybe inflation-proof bonds, those I-bonds we've just been talking about, could be an option. You could roll $10k/yr, your spouse could too, and in five years, you'll at least not have lost money to inflation.
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Dec 31, 2021 07:35
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bird with big dick posted:What comes next is suffering and death. The idea that suffering and death are avoidable is a life insurance salesman pitch To make this less of a throwaway post- is there an estate planning thread? Should there be? E.g. how do you shop for an estate attorney? The first one we checked gave a webinar that was fine, but ended with some hard sell bs. Also they are very full service, $8-10k for a trust which they do all the clerical work to fund. I don't really want people like that helping me decide how to navigate this Epitope fucked around with this message at 13:17 on Dec 31, 2021 |
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Dec 31, 2021 13:09
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Leperflesh posted:This isn't an awful suggestion either, but it's an 80% bonds/20% stocks income index fund, intended to produce income - which, if held in a taxable account, will be taxable. Seems like kind of a random suggestion? I suggested it only because it shows a time horizon of “3-5 years” so thought that might have given you some comfort. Could also be used as a starting point for allocations if you wanted. But your points are valid.
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Dec 31, 2021 14:29
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Sorry for all the questions lately, this new job has me rethinking everything. I have a “next dollar” question. Assuming for 2022, tomorrow I will max out my Roth IRA. I also will set my 401k to 3% to get my full employer match. After that, should I continue to ramp up my 401k pre-tax contributions, my Roth 401k contributions, or just do extra into my brokerage? (Note, my 401k options are trash, so I’m keeping my old employer 401k as-is because it’s with Fidelity and I use Brokeragelink).
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Dec 31, 2021 15:55
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You should max your 401k before brokerage. The r/personalfinance flowchart is instructive here. Regarding the question of traditional vs. Roth 401k, that's a question of if you think your tax rate now exceeds what your tax rate will be when you start withdrawing from your 401k, probably in retirement. Many people do Roth IRA and a traditional 401k. But no one can predict what the future tax rates will be, except to note that we are at historically low tax rates over the last 50+? years. If your 401k options are truly awful and have high expense ratios, that might affect things. Do you have access to a target date fund or a total stock market fund, and what are the ERs?
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Dec 31, 2021 16:04
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Epitope posted:The idea that suffering and death are avoidable is a life insurance salesman pitch Not sure if one exists but I like the idea. I asked my CPA for a reco, but he didn't have any good ones. Started Googling. Found one I liked, was like $3k for a trust, medical power of attorney, financial power of attorney. And easy to talk with. From discussions with friends and family since then, I probably could've found someone for about $1500 if I really worked for it. I've had a couple quick phone calls at no charge since then (no changes though). If I did want to make any changes it'd be another $400 or something. One important thing I think is that depending on your state you might need slightly different documents? And if you have like a bunch of kids with different people and a bunch of property and poo poo, then you might have to pay more. Getting the documentation in place was step 1. Then step 2 is making the trust the beneficiary of all my financial accounts and life insurance and such.
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Dec 31, 2021 16:09
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edit: n/m, reading is hard
withak fucked around with this message at 16:35 on Dec 31, 2021 |
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Dec 31, 2021 16:11
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I too would be interested in any broad estate planning advice others have - something we have been delaying for far too long.
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Dec 31, 2021 16:15
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withak posted:If you are not able to predict the future when it comes to taxes (if you are then PM me), the Roth has the advantage of there being conditions where you are allowed take the principal back out if you need it in an emergency.
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Dec 31, 2021 16:25
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If the transfer won't go through until 1/3 anyways , can I begin the process of throwing money for my 2022 contribution into my Roth IRA account in Schwab today? Or do I need to wait until 1/1/2022 to start the process?
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Dec 31, 2021 17:02
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Fake James posted:If the transfer won't go through until 1/3 anyways , can I begin the process of throwing money for my 2022 contribution into my Roth IRA account in Schwab today? Or do I need to wait until 1/1/2022 to start the process? Yes. I just did it to confirm it works. Thanks for the reminder!
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Dec 31, 2021 17:04
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a dingus posted:Yes. I just did it to confirm it works. Thanks for the reminder! Hmm, I tried it just now and it says the $6,000.00 transfer would exceed the contribution limit for 2022. Tried just $1,000.00 and same thing. Guess I will try again tomorrow, it isn't going to go through until the 3rd anyways so no biggie!
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Dec 31, 2021 17:13
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spf3million posted:OP is already maxing out their Roth IRA. Their next dollar question is Roth vs Trad 401k. You can't withdraw Roth 401k contributions early, only Roth IRA contributions.
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Dec 31, 2021 17:25
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Ersatz posted:Roth 401k contributions can be rolled over to a Roth IRA, however. And I've been under the impression that if the Roth IRA was opened more than five years prior to the date of withdrawal, that those rolled over contributions can be withdrawn from the IRA. Is that wrong? Most companies won't let you roll a 401k to an IRA while you are still employed with that company. I can't remember the details on the withdrawal rules once the money is successfully moved to the Roth IRA but there is definitely something about five years as you mention. I thought there was still a five year waiting period regardless of the age of the IRA.
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Dec 31, 2021 17:30
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Fake James posted:Hmm, I tried it just now and it says the $6,000.00 transfer would exceed the contribution limit for 2022. Tried just $1,000.00 and same thing. Guess I will try again tomorrow, it isn't going to go through until the 3rd anyways so no biggie! I scheduled the transfer for 1/3 so I'm not sure if that's the issue. That's strange that it would give you an error about the 2022 limit instead of 2021 if it thought it could possibly transfer early. Odd.
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Dec 31, 2021 18:54
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a dingus posted:I scheduled the transfer for 1/3 so I'm not sure if that's the issue. That's strange that it would give you an error about the 2022 limit instead of 2021 if it thought it could possibly transfer early. Odd.  Got it scheduled out for 2022 as well, so not sure what's going on.
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Dec 31, 2021 20:05
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Mu Zeta posted:The dividend distribution for my Vanguard International was super huge this year. I think it dwarfs 2020. Kind of shocking but I guess it was a weird year. VFIFX just barfed out like 10% of its value as a cap gains distribution. I'd be mad if I had it in any taxable accounts. not sure if it's available outside of IRAs TBH but I thought these things aimed to be tax neutral instead of taking in gains. I'm guessing it had some of its investments take off like crazy and they needed to sell to rebalance the fund in a pretty dramatic way.
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Dec 31, 2021 20:11
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YanniRotten posted:VFIFX just barfed out like 10% of its value as a cap gains distribution. I'd be mad if I had it in any taxable accounts. not sure if it's available outside of IRAs TBH but I thought these things aimed to be tax neutral instead of taking in gains. Yeah, that was quite a surprise, I didn't even realize it was capital gains at first because it was so large (and not labeled as such in Mint).
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Dec 31, 2021 20:23
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That fund is: 55% VTSAX, up 26% over 1y 35% VTIAX, up 10% 10% various bond funds which are probably even or negative So yeah, would have needed to sell a decent amount of VTSAX to rebalance. Not sure when they do that exactly.
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Dec 31, 2021 20:30
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CubicalSucrose posted:Not sure if one exists but I like the idea. 3k for premium sounds a bit more reasonable. One kid, one house, no plans for anything more. Advanced medical directive is a free form. Kinda seems like the state's intestate laws would almost be sufficient. The one thing we feel we need to spell out for the foreseeable term (till she turns 18), is a guardian. So, we want to designate one, and get them access to assets. Dunno if using a will and/or trust makes more sense. Would enjoy paying a pro to make sure it's done right, just don't wanna get into some grandiose hullabaloo
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Dec 31, 2021 20:44
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CubicalSucrose posted:I asked my CPA for a reco, but he didn't have any good ones. Started Googling. Found one I liked, was like $3k for a trust, medical power of attorney, financial power of attorney. And easy to talk with. From discussions with friends and family since then, I probably could've found someone for about $1500 if I really worked for it.
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Dec 31, 2021 21:13
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