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Kinda annoyed how much higher Fidelity's expense ratios are but also kinda annoyed at having to face another place i have to get tax forms from if i added a vanguard account.
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Mar 8, 2023 18:31
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Strong Sauce posted:Kinda annoyed how much higher Fidelity's expense ratios are but also kinda annoyed at having to face another place i have to get tax forms from if i added a vanguard account. On which funds?
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Mar 8, 2023 18:36
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Any reason not to open a rollover IRA and move money in to it? I'm hanging on to an old employer's 401(k) because used to be it was a dirt cheap ER at Vanguard. Sitting at 0.08% ER in a target date fund, whereas my current company's target date is like 0.37% ER. But looking in to it, it looks like currently the ER for the same (equivalent?) fund in an IRA is identical. I had thought that the institutional funds were different, but it looks like this isn't the case? Is the fund for my 401(k) identical to what I'd use for an IRA? Not all that desperate to move it since it's functionally equivalent, but it would be nice to get it out from under the thumb of my former employer just in case they change servicers or something.
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Mar 8, 2023 18:53
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Strong Sauce posted:Kinda annoyed how much higher Fidelity's expense ratios are but also kinda annoyed at having to face another place i have to get tax forms from if i added a vanguard account. Fidelity has a wide range of index funds that are price competitive with Vanguard, and they even have a handful of literal zero-ER funds. Assuming we are not taking about a 401k with a limited menu, you have just as many good options with Fidelity. My HSA at Fidelity is amazing. Honestly some days I think about switching my brokerage and IRA from Vanguard to Fidelity for their better website and service, but the difference is so marginal and the headache so large.
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Mar 8, 2023 19:08
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DaveSauce posted:Any reason not to open a rollover IRA and move money in to it? Will you ever need to do the backdoor roth? If so, you don't want to have a balance in a trad ira because you'll have to convert it to roth first and you'll pay taxes. Leaving it in a 401k avoids that issue. If you're unlikely to earn enough to want to backdoor, then it's fine and probably preferred so you'll be indirect control of your fund choices. You'll be able to choose where to open your rollover IRA, for example Fidelity or Vanguard, and you'll get low ERs in there for the types of funds we'd recommend you invest in. RMDs when you're old are basically the same between the two account types as well.
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Mar 8, 2023 19:09
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was quick typing since i had to grab my coffee. i was specifically talking about the settlement funds each company uses by default SPAXX vs VMFXX. just reminded me since someone had mentioned it a couple posts before mine. SPAXX ER is 0.42, Yield 4.22% VMFXX ER is 0.11, Yield 4.51%
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Mar 8, 2023 19:18
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DaveSauce posted:Any reason not to open a rollover IRA and move money in to it? Keeping backdoor Roth options available is the biggest reason to hold off. This question gets asked often enough it might make sense to have an effortpost answer in the OP.
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Mar 8, 2023 19:31
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Strong Sauce posted:was quick typing since i had to grab my coffee. i was specifically talking about the settlement funds each company uses by default SPAXX vs VMFXX. just reminded me since someone had mentioned it a couple posts before mine. the settlement fund is not intended as a real investment vehicle and imo if you park enough money in it for enough time for there to be a meaningful difference between these two you have an investment strategy problem
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Mar 8, 2023 19:41
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Pollyanna posted:My HYSA is at 3.34~3.40%. That extra 1~1.5% is tempting for sure. I’m planning on renting in an area I’m considering purchasing in before committing, so I won’t be making a large purchase this year either. That said, I dunno if I’m comfortable locking up my savings for a long amount of time… You can get treasuries that expire in 3 months or less if you’re worried about locking up your savings for too long. Even a money market fund would be better than that HYSA for no commitment whatsoever. Fidelity has a cash management account you can use for normal banking needs, plus buying treasuries, buying CDs, Money Market Funds, etc… You can compare rates and put your money where it makes the most sense for your savings needs.
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Mar 8, 2023 19:55
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I have Ally and Vanguard, the former has some Ally Invest thing that I don’t know what the gently caress it is and the latter doesn’t seem to trade in T-bills directly, just through funds. I could use Charles Schwab I guess?
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Mar 8, 2023 19:59
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KYOON GRIFFEY JR posted:the settlement fund is not intended as a real investment vehicle and imo if you park enough money in it for enough time for there to be a meaningful difference between these two you have an investment strategy problem Ehh I moved a bunch of money from my HYSA to my settlement fund because it's enough of an increase in APY (4.51% vs 3.75%) to make the hassle worth it, at least for what's essentially a chubby emergency fund. I guess that doesn't really count as an "investment strategy" though, just kind of maximizing interest on what is basically cash. It does necessitate keeping a closer eye on the yield though, because I'm guessing there's a point where the yield will round the bend and start dropping.
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Mar 8, 2023 20:05
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Pollyanna posted:I have Ally and Vanguard, the former has some Ally Invest thing that I don’t know what the gently caress it is and the latter doesn’t seem to trade in T-bills directly, just through funds. I could use Charles Schwab I guess? You can absolutely buy T-bills on Vanguard. Both auction and secondary market (the latter only during market hours though).
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Mar 9, 2023 03:34
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drk posted:You can absolutely buy T-bills on Vanguard. Both auction and secondary market (the latter only during market hours though). I don't think Vanguard has any way to put in a buy order for auction T-bills unless the auction is active, though. I only have a Vanguard account so maybe that's standard, I was just surprised there wasn't an option to put in an order and just have it execute during the next open auction period.
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Mar 9, 2023 03:45
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MockingQuantum posted:I don't think Vanguard has any way to put in a buy order for auction T-bills unless the auction is active, though. I only have a Vanguard account so maybe that's standard, I was just surprised there wasn't an option to put in an order and just have it execute during the next open auction period. It appears TreasuryDirect will let you schedule purchases for future auctions: 
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Mar 9, 2023 04:08
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drk posted:It appears TreasuryDirect will let you schedule purchases for future auctions: But that would require me interacting with TD's terrible site, lol. I would honestly just buy bills on the secondary market through Vanguard over using TD directly, but mostly because the account I have associated with it isn't one of my "main" active accounts anymore, and you have to mail in a paper form to get it changed to a different account. Or I can just set reminders for the auction announcements and get them through Vanguard that way. It's all first-world problems anyway!
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Mar 9, 2023 04:15
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Yeah I dont use TD for Tbills either. With the exception of the 52-week all other bills are auctioned every week. 3 and 6 months are auctioned over the weekend, and with a Thu-Sun auction window, they are available for purchase more days than they aren't.
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Mar 9, 2023 04:27
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Edit: Forgot to mention, thank you to everyone who answered my questions about HSAs.MockingQuantum posted:But that would require me interacting with TD's terrible site, lol. I hear this a lot but honestly? I bought T-bills on TD as a test run last year and again a few weeks ago and found it to be very simple. If you've already got an account for I bonds or whatever then it takes maybe 2 minutes and the interface is way easier for me as a layperson to understand than Vanguard's. BuyDirect -> select Bills -> select the duration and auction date on the page drk screenshotted, amount, and whether you want to schedule a reinvestment -> done. Atahualpa fucked around with this message at 04:33 on Mar 9, 2023 |
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Mar 9, 2023 04:27
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KYOON GRIFFEY JR posted:the settlement fund is not intended as a real investment vehicle and imo if you park enough money in it for enough time for there to be a meaningful difference between these two you have an investment strategy problem Which vanguard money market fund would you advise instead for that purpose? Beyond state specific ones that aren’t relevant to where I live, the difference between the vanguard offerings seemed very small.
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Mar 9, 2023 13:41
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Velius posted:Which vanguard money market fund would you advise instead for that purpose? Beyond state specific ones that aren’t relevant to where I live, the difference between the vanguard offerings seemed very small. I carry emergency fund in HYSA and short term investments as T-Bills presently.
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Mar 9, 2023 14:45
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I have a Vanguard Brokerage account which I use for "safe investments", and a TD Ameritrade account from when I pretended that trading stocks/options on a hunch and a prayer wasn't just a fancier form of gambling. I gave up day trading more than a year ago, and basically only have SPY and QQQ in the TD account, both of which are nominally in the green. I'm gearing up to make a detailed post here with all my positions so you guys can help me get this poo poo back on track after 2020 destroyed my brain (I promise it's not that bad, everything is basically in index funds and stocks like Apple and Microsoft), but not sure when that will happen. Is there any reason not to do an in-kind transfer to Vanguard and close the TD Ameritrade account? I'd like to get everything back to one place.
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Mar 10, 2023 01:48
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dpkg chopra posted:Is there any reason not to do an in-kind transfer to Vanguard and close the TD Ameritrade account? I'd like to get everything back to one place. I *think* cost basis records should transfer over, but there are plenty of stories online of people losing that info during an in kind transfer. If you have hundreds of different tax lots from your day trading activities, make sure you have very good records before you transfer.
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Mar 10, 2023 02:03
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All of my day trading transactions are over a year old and included in my last tax return, if that changes anything.
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Mar 10, 2023 02:09
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If you closed out most of your actively traded positions, it will be easier. If your current positions were bought into all at once, or a limited number of times, calculating taxes wont be hard. What you want to avoid is a big lump of say, SPY, where you bought in at 300 different prices but during the transfer cost basis info is lost and when you sell it you have to figure out exactly which portions were bought at which prices. Again, my understanding is cost basis info should transfer over though.
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Mar 10, 2023 02:35
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I think I'm missing something obvious; do T-Bill interest show up somewhere in Fidelity? I'm looking in YTD tax info, but I mostly just want a snapshot summary of "how much did I make on this" without going into a spreadsheet + manually going through my transaction history.
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Mar 10, 2023 18:43
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Since T bills are sold at a discount, they don't generate "interest" which is probably what their systems are designed around showing. They should, somewhere, show an accreted value, though. I'm not familiar with their systems, but everyone I know just runs a side calculation for the accretion on discount notes since custodians/banks rarely, if ever, do that for you. Maybe they have a column in a table somewhere that merges accretion+accrued interest? jokes fucked around with this message at 18:56 on Mar 10, 2023 |
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Mar 10, 2023 18:52
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Vanguard definitely labels the returns on T-bills as interest in the summary of dividends and capital gains distributions for the year
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Mar 10, 2023 19:02
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Does it make more sense to buy TIPS or I Bonds right now? As I understand it, i bonds track inflation and are variable while TIPS lock in inflation+extra at time of purchase right?
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Mar 10, 2023 19:15
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Valicious posted:Does it make more sense to buy TIPS or I Bonds right now? As I understand it, i bonds track inflation and are variable while TIPS lock in inflation+extra at time of purchase right? Oh hey, a question I am at least somewhat qualified to answer. Both I-Bonds and TIPS pay a fixed rate over inflation, though they handle inflation calculations slightly differently. TIPS pay a higher interest, but I-bonds are simpler and more convenient. Currently TIPS pay around 1.5% over inflation, but if inflation goes negative they will drop to follow that, while I Bonds are paying .4% over inflation but can't go below 0% if inflation is negative. TIPS have a maturity date, whereas I-Bonds you can cash in at any time between 1 and 30 years (if you cash them in in less than 5 years you pay a penalty of the last 3 months of interest). You can still sell TIPS on the secondary market if you need the money but if you're selling because new bonds earn a better rate you'll probably get less than their notional value because everyone else would prefer the new bonds too. There are also a few other minor advantages for I Bonds (they collect a month's worth of interest even if you buy them on the 25th, they let you belated get in on the last 6 months of inflation, and a few other things) but if you're looking for the maximum return those probably don't make up for the current difference in interest rates. I Bonds biggest advantage right now is the inflation rate for them was last calculated in November, at 6.48%, and if you buy them now you get that for the next 6 months (on top of the .4%). Whereas any inflation based earnings on TIPS will be based on upcoming inflation. If you're planning on holding long term this gets less important, though, as whatever TIPS earn this month will be reflected in what I Bonds earn in the next 6-12 months. You're also limited to buying $10,000 in I Bonds a year, but TIPS are unlimited. Bremen fucked around with this message at 21:10 on Mar 10, 2023 |
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Mar 10, 2023 19:26
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Edit, nm you answered
daslog fucked around with this message at 19:35 on Mar 10, 2023 |
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Mar 10, 2023 19:33
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daslog posted:So if I buy an I bond, is the rate locked in at the time of purchase or does it adjust to inflation? Every 6 months it readjusts.
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Mar 10, 2023 19:34
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well, there is a fixed rate for the life of the bond, right now at 0.4% after a long time at 0%. the inflation adjustments changes every 6 months and adding both together gives you the total composite rate
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Mar 10, 2023 20:01
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We'll know the I-Bond rate for the next 6 months in April. You still have time to lock in the 6.4% rate for 6 months before the new rate goes into effect.
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Mar 10, 2023 20:13
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Valicious posted:Does it make more sense to buy TIPS or I Bonds right now? As I understand it, i bonds track inflation and are variable while TIPS lock in inflation+extra at time of purchase right? Bremen posted:Oh hey, a question I am at least somewhat qualified to answer. Both I-Bonds and TIPS pay a fixed rate over inflation, though they handle inflation calculations slightly differently. One thing to add to this is that I Bonds are more tax efficient. All earnings and taxes are deferred until redemption, but TIPS have yearly earnings from the coupon payments (that you get to use / have to figure out how to reinvest), and yearly taxes for both the coupon payments and the inflation adjustment. At 0.4% versus 1.5% this difference is almost certainly not enough to make up for the difference in interest rates, but it can be considerable. The fact that you pay taxes on TIPS principal increases means that in periods of high inflation, you might actually have a larger payment in taxes than the coupon payment you receive. The above is just my understanding, I couldn't find a source that spells out my specific conclusions on the taxation efficiency.
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Mar 10, 2023 20:58
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Any reason I shouldn't sock away $1K/month into t-bills set to mature at the end of December so I can max my wife and I's roth IRAs come Jan 1? My top priority is having enough capital to max it every year. T-bills currently have a slightly higher yield than HYSAs, so if I'm holding to maturity there's essentially 0 risk, right? Seems like a fine way to get an extra 200 bucks-ish. I guess the alternative is to mimic my retirement portfolio in a taxable brokerage (tax efficiently, of course) but that runs the risk of not actually having $13K come Jan 1 and that sits a little uneasy for me.
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Mar 10, 2023 22:12
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Incredibly dumb question that I will ask before I buy anything at all. Are T-bill rates annual, or over the real term of the bill? Meaning, if a 13-week T-bill is discounted by 4.8%, is that representative of a 4.8% savings rate over 13 weeks, or over 365 days?
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Mar 11, 2023 17:22
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Like I think I know the answer, but the only thing I know for sure is that I know nothing.
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Mar 11, 2023 17:26
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Annualized.
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Mar 11, 2023 17:26
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Got it. So then that incentivizes buying longer term bills, since the closer they are to a year, the closer you are to getting a return of (for example) 4.8% of the money you bought the T bill for. Naively I would assume that a 13-week bill would get 13/52 of that 4.8%, but the actual answer probably involves calculus or some poo poo.
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Mar 11, 2023 17:37
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T-bill yields are calculated (iirc) on ACT/ACT or ACT/365. If you click through to bond details on whatever brokerage you're using it should have the method listed in there. So if you have a 4.5% yield, 30 day bill that's ACT/365 then per $1,000 the yield is 1000*.045*(30/365) or $3.70 per $1,000. Since t-bills are zero coupon, you'd pay $996.30 on issue, and get back $1000 at maturity.
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Mar 11, 2023 17:39
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Is Ivy Bank currently the highest APY at 4.75%? They were mentioned briefly here, but I think someone said that they track US Treasury bond so no need to chase rates?
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Mar 11, 2023 17:46
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