walkinwood
Thinks s/he gets paid by the post
Hello,
I am nearing ER, so am starting to get into the nitty gritty of how I'll manage my accounts.
Today, I keep my cash in a Vanguard NJ Muni money market fund, so pay no taxes. Due to my tax bracket, this is a good deal while I'm working.
Once I ER, I may get a better deal using taxable CDs since my fed tax rate is probably going to be 25% - or even 15 % in the first couple of years.
My dilemma:
Today, CDs are yielding approx 4.9-5%. Down from 5.25% not too long ago.
If I wait till ER at the end of April (I just can't say beginning of May!!), who knows where CD yields will be.
On the other hand, if I build a CD ladder today (3 years cash), I lock in the rate, but lose out in 2008 with higher taxes on the interest.
If you have already ER'd or have your plan set, I'm very interested in hearing how you're managing your cash to get most yield and pay the least taxes.
Regards,
ww.
I am nearing ER, so am starting to get into the nitty gritty of how I'll manage my accounts.
Today, I keep my cash in a Vanguard NJ Muni money market fund, so pay no taxes. Due to my tax bracket, this is a good deal while I'm working.
Once I ER, I may get a better deal using taxable CDs since my fed tax rate is probably going to be 25% - or even 15 % in the first couple of years.
My dilemma:
Today, CDs are yielding approx 4.9-5%. Down from 5.25% not too long ago.
If I wait till ER at the end of April (I just can't say beginning of May!!), who knows where CD yields will be.
On the other hand, if I build a CD ladder today (3 years cash), I lock in the rate, but lose out in 2008 with higher taxes on the interest.
If you have already ER'd or have your plan set, I'm very interested in hearing how you're managing your cash to get most yield and pay the least taxes.
Regards,
ww.