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Also secondary bond markets a lot of the top of book bid/asks have fairly large minimum quantities. Like Fidelity doesn't charge a commission for treasuries but I'm looking at the secondary screen for 3 month maturity right now and the minimum quantities are like $50k, $100k, $300k, $1 million. You are allowed to trade in smaller increments of $1,000 but you gotta put in a limit order and hope some dealer fills it, you can't just lift the best price in the published book. I think the most underappreciated fact about buying individual bonds directly is how annoying and occasionally predatory the secondary market is for retail traders. It's nowhere close to equities where you push button, trade stock.
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Jun 22, 2023 15:31
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Push the depth of book icon (looks like a little book) next to the treasury you're interested in. Under the Ask section you can usually find an offering with min qty (1). Hit buy next to that offering and the trade executes immediately at the known price.
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Jun 22, 2023 16:14
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Just got on treasury bills lately and I just went with new issues instead of loving with the secondary market. Also it made me feel like an old man to get hyped about these yields.
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Jun 22, 2023 16:26
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mrmcd posted:Also secondary bond markets a lot of the top of book bid/asks have fairly large minimum quantities. Like Fidelity doesn't charge a commission for treasuries but I'm looking at the secondary screen for 3 month maturity right now and the minimum quantities are like $50k, $100k, $300k, $1 million. You are allowed to trade in smaller increments of $1,000 but you gotta put in a limit order and hope some dealer fills it, you can't just lift the best price in the published book. Trading bonds is going to be so much more esoteric and beyond the ken of normal people, and involves a bit more paperwork. Trading stock is just so much easier to understand.
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Jun 22, 2023 16:29
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jokes posted:Trading bonds is going to be so much more esoteric and beyond the ken of normal people, and involves a bit more paperwork. Trading stock is just so much easier to understand. I'm sure there's a reason for it, but I do wonder why you only very rarely see bonds traded on the stock exchanges (though it DOES happen sometimes, see, for example, an AT&T baby bond). I would think an already-public issuer might be able to decrease interest costs by casting a wider net of investors. Maybe there's some issue with enforcing covenants or something.
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Jun 22, 2023 17:50
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jokes posted:Trading bonds is going to be so much more esoteric and beyond the ken of normal people, and involves a bit more paperwork. Trading stock is just so much easier to understand. Yeah if I am going to hold bonds its going to be through an ETF like SGOV or BND. I need the simplicity because I am lazy.
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Jun 23, 2023 18:44
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Was doing some email cleanup last night, and discovered that Treasury Direct got rid of their virtual keyboard. The site is slightly less awful, now.
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Jun 24, 2023 00:06
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Antillie posted:Yeah if I am going to hold bonds its going to be through an ETF like SGOV or BND. I need the simplicity because I am lazy. buy and hold to maturity of stuff like T-Bills is pretty straightforward. (I click like three buttons in Schwab just like I would to buy SGOV). Things just get more complex on the secondary market.
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Jun 24, 2023 00:25
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going through their safe at home, my parents found paper bonds given to me as birth presents  ...also I thought we had sold them when they matured and I was 18 to pay for college so uh, accidental BWM moment there, because that's a long time ago. but this thread still seemed the most likely to appreciate how cute it was.
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Jun 26, 2023 23:46
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When I was young my parents apparently bought twelve shares of Disney for me and only remembered they existed a few years ago. They were actual paper certificates and they were decorated with Mickey Mouse art and poo poo. I was a little sad when I digitized them (or whatever it’s called when you turn cool physical stock certificates into boring numbers in a brokerage account).
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Jun 26, 2023 23:59
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DACK FAYDEN posted:going through their safe at home, my parents found paper bonds given to me as birth presents possibly not BWM if they were bought in the 80s at 10%+
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Jun 27, 2023 01:07
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My grandfather bought a number shares in Union Carbide through the ESPP and gave them to me when I was small. The paper stock certificate looked really cool but I had to send it in a number of years ago to get it turned into electronic shares due to a merger.
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Jun 27, 2023 01:08
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DACK FAYDEN posted:going through their safe at home, my parents found paper bonds given to me as birth presents
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Jun 27, 2023 15:01
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The Leck posted:I cashed some of these in recently, and the bank teller had to go get a big manual to figure out how to do it. I don’t think they handle a lot of paper savings bonds these days. My wife did the same with some mature EE bonds a couple years back and the bank people evidently all gathered round to peer at them.
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Jun 27, 2023 16:46
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The Leck posted:I cashed some of these in recently, and the bank teller had to go get a big manual to figure out how to do it. I don’t think they handle a lot of paper savings bonds these days. I took a bunch to Capital One a few years ago and they just told me to go to treasury direct because they stopped accepting them.
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Jun 27, 2023 21:12
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Really, really long term investing: https://www.waldenmutual.com/posts/coming-soon-our-100-year-grow-local-cd-sustainable-banking The early withdrawl penalty is 10 years interest.
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Jun 30, 2023 21:34
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drk posted:Really, really long term investing: https://www.waldenmutual.com/posts/coming-soon-our-100-year-grow-local-cd-sustainable-banking That's super tempting. Largely for the hilarity.
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Jun 30, 2023 22:32
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drk posted:Really, really long term investing: https://www.waldenmutual.com/posts/coming-soon-our-100-year-grow-local-cd-sustainable-banking This is weird and doesn't make any sense. It's pitched as a way for people to lock up money for the long term in trust funds or charitable foundations, but the maximum investment is $150,000. Anyone with so much money they wanna create a foundation or trust to exist for > 100 years isn't gonna bother with an amount that low.
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Jun 30, 2023 22:34
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I have some $100 EE from my grandparents from my teenage years and they are a mess. A third are correct, a third have my grandparents SSN and a third of them have my middle and last name (which is what I go by). Does any of that matter?
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Jun 30, 2023 23:11
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I received an email about Multi-Year Guaranteed Annuities from a company that sometimes sends out retirement/investment stuff to members of my union. From a bit of research it sounds like these are very similar to CDs: a fixed-rate asset with specific duration where you know the exact rate at time of purchase, but with slightly different tax implications, issued by insurance companies rather than banks, and not FDIC-insured. Are there any other downsides I'm overlooking? The rates I'm seeing medium-to-long-term MYGAs are on par to moderately better than what I've been seeing for callable CDs and way better than anything I've seen for call-protected ones. Also, the email says "Principal Protection: Sleep easy knowing your initial investment is secure" but I haven't been able to find anything about how the funds are protected aside from the fact that they're not FDIC-insured. Is it just by the issuing company, and you'd still be screwed if they go belly-up?
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Jul 1, 2023 00:28
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So, uh, I've started saving for retirement. Managed to max out my 401k very quickly late last year, and am already maxed out for this year. As things go, especially now that I am no longer contributing to the 401k, I will probably hit the FDIC maximum with my savings account by the end of the year, which I'm assuming is not optimal. I think my income is too much for an IRA to have any tax benefits at this point, but not enough for it to be worth it to itemize in my tax return. No debt. Anything else I'm missing? Is a CD a good idea for pretty much fire-and-forget investment vehicle?
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Jul 1, 2023 00:43
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Backdoor IRA? High-deductible health plan with HSA? CDs are fine for short-term cash preservation. For long-term investing, if you have exhausted all of your tax-advantaged savings options, you should consider a brokerage account and investing in a basket of long-term investments with a higher average return than a CD. You can shift whatever portion of your overall long-term portfolio has low taxes to your taxed brokerage account and concentrate the higher-taxed options in the tax-advantaged accounts.
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Jul 1, 2023 00:56
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Atahualpa posted:Also, the email says "Principal Protection: Sleep easy knowing your initial investment is secure" but I haven't been able to find anything about how the funds are protected aside from the fact that they're not FDIC-insured. Is it just by the issuing company, and you'd still be screwed if they go belly-up? You are correct that annuities are not insured, there's no FDIC type coverage if the issuer goes bankrupt. However, your state's Life & Health Insurance Guaranty Association likely covers annuities up to $100,000 - $300,000 depending on what's being recovered. Check for yourself here.
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Jul 1, 2023 01:18
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Leperflesh posted:Backdoor IRA? "The backdoor Roth IRA strategy is not a tax dodge."  quote:High-deductible health plan with HSA? quote:CDs are fine for short-term cash preservation. For long-term investing, if you have exhausted all of your tax-advantaged savings options, you should consider a brokerage account and investing in a basket of long-term investments with a higher average return than a CD. You can shift whatever portion of your overall long-term portfolio has low taxes to your taxed brokerage account and concentrate the higher-taxed options in the tax-advantaged accounts.
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Jul 1, 2023 01:51
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I'd bumped up my emergency savings by a few months late last year when there was a lot of uncertainty about where the axe would fall at work. But now things look significantly more stable and I'm planning to cut back to normal. Thoughts about the best way to approach investing the sudden "influx" of unallocated cash into my existing portfolio? I could YOLO it in one fell swoop, but I kind of like the idea of just setting up a few recurring transactions to chew away at it over the course of the rest of the year.Absurd Alhazred posted:So, uh, I've started saving for retirement. Managed to max out my 401k very quickly late last year, and am already maxed out for this year. As things go, especially now that I am no longer contributing to the 401k, I will probably hit the FDIC maximum with my savings account by the end of the year, which I'm assuming is not optimal. I think my income is too much for an IRA to have any tax benefits at this point, but not enough for it to be worth it to itemize in my tax return. No debt. Anything else I'm missing? Is a CD a good idea for pretty much fire-and-forget investment vehicle? But otherwise set up a brokerage with Vanguard and toss stuff into VTSAX and VTLX.
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Jul 1, 2023 01:57
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Absurd Alhazred posted:Looked that up, and LOL: Their reasoning is a Roth IRA (including backdoor) is not a tax dodge in the sense that it doesn't avoid any taxes the year you do it. You do end up avoiding taxes on earnings later in the future. TBH they are kind of splitting hairs and I would call it a legal tax dodge. A lot of qualifying High Deductible Health Plans (HDHPs) offer coverage that is as good or even better than non-HDHPs. You'll want to check your actual options from your employer to see if it's a good move - for a lot of employer plans it often is the best option, even in years when you have significant medical costs. Balancing investments across different kinds of accounts generally just involves buying some things in one account and buying others in a different account. Selling in one account and buying the exact same thing in another account is usually fine but can sometimes lead to a weird tax situation due to wash sale rules, so if one of your goals is to do your taxes correctly it's usually the least amount of hassle to just rebalance when you are buying. If you are just sitting on a pile of cash with no plans for it and no leftover room in tax advantaged accounts, generally you'll want to keep a few months of expenses in a liquid emergency fund like a high yield savings account. Then put the remainder into a brokerage account which you can split between stocks (usually etfs or index-mutual funds) and fixed income (usually bonds or CDs). If you are planning on using the money in the next few years then you'll want to have more money on the fixed income side. There are other choices that go into how to allocate your dollars, but if you want to go this route then just ask the thread.
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Jul 1, 2023 02:37
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I'm hesitant to go into a Roth 401k (I assume I can just rollover?), to me the 401k is hedging against me getting a big income drop once I age out/am otherwise unable or unwilling to keep working, so I'd expect that my marginal tax rate would be lower than if I pay the taxes now. My employer only has two levels of PPO, and no HSA that I can see. There's an FSA? Is an HSA something I can just get independently of any employer benefits? I think my CU has one of those, but I'm thinking the rates there aren't that great, the "high yield" savings account seems like it would give me 2.5% APY for what I currently have in savings, which is better than my current 0.15% but I'm seeing some 5% in other places online. HSA is also 0.15% I'm not sure if I have as much in savings as I'm comfortable with yet to go beyond that into brokerage and CDs, but I've been through a tumultuous few years employment-wise, maybe I'm being too paranoid (see maxing out my 401k before midyear).
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Jul 1, 2023 03:16
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smackfu posted:I have some $100 EE from my grandparents from my teenage years and they are a mess. A third are correct, a third have my grandparents SSN and a third of them have my middle and last name (which is what I go by). Does any of that matter? Probably. If you try to cash them in through TreasuryDirect they're likely to send back anything that trips their red flags, along with a form about how to fix it.
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Jul 1, 2023 03:22
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Absurd Alhazred posted:I'm hesitant to go into a Roth 401k (I assume I can just rollover?), to me the 401k is hedging against me getting a big income drop once I age out/am otherwise unable or unwilling to keep working, so I'd expect that my marginal tax rate would be lower than if I pay the taxes now. The benefit of the mega backdoor Roth 401k is that your contribution limit is substantially higher. Even with Roth treatment you’re able to contribute more than double what you otherwise would be allowed to. quote:My employer only has two levels of PPO, and no HSA that I can see. There's an FSA? You can get a free HSA with a normal brokerage that you can treat like an IRA (i.e. your rate of return depends on your investments) but you can only legally contribute in years that you have a high deductible health plan, which it sounds like you might not have access to. quote:I'm not sure if I have as much in savings as I'm comfortable with yet to go beyond that into brokerage and CDs, but I've been through a tumultuous few years employment-wise, maybe I'm being too paranoid (see maxing out my 401k before midyear). Your decisions are your own, but a quarter million dollars (the FDIC limit you mentioned) is a pretty beefy emergency fund.
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Jul 1, 2023 04:39
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Absurd Alhazred posted:[…] Managed to max out my 401k very quickly late last year, and am already maxed out for this year. […] I will probably hit the FDIC maximum with my savings account by the end of the year I’d recommend you reference one or both of the flow charts in the first post in this thread. I’ve had a couple of friends in your situation and they’ve used this as an opportunity to start back at the beginning to make sure they aren’t skipping a box, and once they confirm that, they can use their savings to start moving money into more powerful long term investments.
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Jul 1, 2023 09:48
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Agronox posted:Probably. Sounds like a good idea to just mail them in and see what happens.
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Jul 1, 2023 13:26
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Absurd Alhazred posted:I'm hesitant to go into a Roth 401k (I assume I can just rollover?), to me the 401k is hedging against me getting a big income drop once I age out/am otherwise unable or unwilling to keep working, so I'd expect that my marginal tax rate would be lower than if I pay the taxes now. You can't have a separate Health Savings Account (HSA) account if you have a non-qualifying health plan. FSAs are ok for tax deductions but aren't a good savings vehicle, due to use-it-or-lose-it rules. A high yield savings account (HYSA) is different and it's just a bank account with a good interest rate. I think it's a marketing term rather than a legal one. The flowcharts in the OP are great if you're not sure what to do. The easiest thing to do to get better interest rates without changing all your bank accounts and direct deposit information, is to open a brokerage account and purchase a short term income etf, such as SGOV. If you then later need access to the cash it only takes a few minutes to sell them and a few days to transfer the money back into a bank account. Opening and using a brokerage for the first time is a little intimidating but it's actually very simple.
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Jul 1, 2023 14:51
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You should at minimum open a trad IRA and do the Roth back door.
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Jul 1, 2023 15:15
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https://www.bogleheads.org/wiki/Prioritizing_investments The Bogleheads crowd generally offers excellent personal investment advice and I tend to agree with the order and logic they lay out in this review. It also pretty well agrees with the advice already offered in this thread. HSAs are great, but require a high deductible plan. IRA via backdoor Roth is highly recommended. When you max out the tax advantaged space then you move into taxable/brokerage accounts. At that point a critical question is time horizon. Do you think you might need the money in a couple years? If so you want that in safer investments like high yield savings accounts, money market funds, CDs, treasuries. If you're saving long term in a taxable account you want to buy and hold a low turnover index fund for longterm growth with minimum of tax drag.
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Jul 1, 2023 15:59
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They must make HSA qualification confusing for a purpose. Specifically the usage of the term "HDHP". Would someone educate my smooth brain please... Look at this scenario, let's say an employer offers the two health insurance plans below... can an employee choose Plan A, the EPO, and then separately participant and contribute to their own HSA somewhere like Fidelity? Isn't it a "HDHP" per the IRS qualifying terms? Or are the actual numbers meaningless and the company/insurance provider must label the plan a "HDHP HSA" plan and only those labeled as such qualify? Plan A) "EPO" aka like a PPO. Deductible per calendar year: $5,000 individual, $10,000 family Coinsurance: 20% Monthly premium: $62 Plan B) HSA HDHP Deductible per calendar year: $2,000 individual, $4,000 family Coinsurance: 30% Monthly premium: $217 https://www.healthcare.gov/glossary/high-deductible-health-plan/ "High deductible health plan (HDHP) A plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but you pay more health care costs yourself before the insurance company starts to pay its share (your deductible). A high deductible plan (HDHP) can be combined with a health savings account (HSA), allowing you to pay for certain medical expenses with money free from federal taxes. For 2022, the IRS defines a high deductible health plan as any plan with a deductible of at least $1,400 for an individual or $2,800 for a family. An HDHP’s total yearly out-of-pocket expenses (including deductibles, copayments, and coinsurance) can’t be more than $7,050 for an individual or $14,100 for a family. (This limit doesn't apply to out-of-network services.)" https://www.irs.gov/publications/p969 "High deductible health plan (HDHP). An HDHP has: A higher annual deductible than typical health plans, and A maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you must pay for covered expenses. Out-of-pocket expenses include copayments and other amounts, but don’t include premiums."
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Jul 1, 2023 16:32
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It's possible for a plan to be both a HDHP (qualifies for HSA) and PPO (which has more to do with in-network vs out of network coverage rates). As I understand HDHP status is determined by both a minimum level of deductibles and a maximum level of out of pocket expenses. The plan documents should tell you up front if the plan meets HDHP qualifications. Also there's an added benefit to contributing to an HSA via employer payroll deductions if possible. When HSA contributions are deducted from your paycheck they are free from Fed tax, state tax, and uniquely fica taxes (SSDI and Medicare). If you contribute to your HSA outside of payroll you should be able to get the fed and state taxes back on next year's tax return, but the fica taxes are gone.
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Jul 1, 2023 17:05
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zaurg posted:They must make HSA qualification confusing for a purpose. Specifically the usage of the term "HDHP". Would someone educate my smooth brain please... High Deductible Health Plan is a legal term. It has a lot of requirements, some of which the IRS lists in FAQs and a lot of which they don't. Generally, some of the requirements are pretty nitty gritty so a plan has to be designed specifically as an HDHP to meet the requirements. So if it doesn't specifically say HDHP or HSA it probably won't qualify, even if the plan has a deductible which is high.
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Jul 1, 2023 17:12
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There was nothing in my plan that said HDHP in it. Looking at the deductible limit it's in the hundreds, so I'm going to go with not qualifying. And I'm going to be honest, I'm not comfortable with using weird loopholes (some of which should have been closed by Build Back Better, apparently!) to get more tax benefits. So I think my next step is probably at the very least moving to a better yield savings account, and really deciding what my actual emergency fund is before I move the rest to a brokerage account. Thanks for the help!
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Jul 1, 2023 17:22
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esquilax posted:High Deductible Health Plan is a legal term. It has a lot of requirements, some of which the IRS lists in FAQs and a lot of which they don't. Yes, only assume its a HDHP/HSA plan if it specifically says that it is. My plan at work only has a $1300 deductible and somehow qualifies, whereas a friend of mine has a $3000 deductible and it isn't one.
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Jul 1, 2023 17:26
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Xenoborg posted:Yes, only assume its a HDHP/HSA plan if it specifically says that it is. My plan at work only has a $1300 deductible and somehow qualifies, whereas a friend of mine has a $3000 deductible and it isn't one. Uh you might want to check your deductible again and maybe inform HR if it's still $1,300. The HDHP requirements change every year and it's definitely $1,500 for 2023. The primary requirements that most plans don't meet is that everything other than preventive care has to be subject to deductible. So if you have an ER visit or buy a drug you have to pay the full cost until the deductible is met, the plan can't contribute anything towards the cost until then. This is to prevent a plan putting in a "technically high deductible" that doesn't actually apply to anything.
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Jul 1, 2023 17:32
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