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Old 04-13-2021, 02:27 PM   #41
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Originally Posted by sengsational View Post
The OP would really feel like an idiot if the market went against him and had to delay retirement because of it. So, yeah, bad idea.
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Old 04-13-2021, 03:32 PM   #42
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Originally Posted by ivinsfan View Post
An I bond is a good option for someone on a subsidized ACA plan. The interest is not reported as income until you cash it out.. ( I know the cliff is gone for awhile , but still good info). ...
They don't send out 1099-IOD for those? I know nothing about I-bonds, but I got 1099-IOD's for treasuries that I used to have.
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Old 04-13-2021, 03:52 PM   #43
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Originally Posted by NW-Bound View Post
Consider the opposite.

Suppose at the market top, you have no cash, which means you are all in stock. Bought high?

And at the market bottom, you have loads of cash, which means you have sold all your stocks. Sold low?

I don't think the above is a good position to be in.

Actually, it it not really the opposite, but the result that occurs from what I mentioned.


Market highs -> I have too much cash, I'm missing out --> invest -> low cash.
Market lows -> I'm gonna lose everything, not enough cash, sell to get cash --> high cash


Whereas I prefer: This is the cash I'm happy with -> Market high or low -> don't worry, be happy .
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Old 04-13-2021, 04:29 PM   #44
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Originally Posted by jollystomper View Post
Actually, it it not really the opposite, but the result that occurs from what I mentioned.


Market highs -> I have too much cash, I'm missing out --> invest -> low cash.
Market lows -> I'm gonna lose everything, not enough cash, sell to get cash --> high cash


Whereas I prefer: This is the cash I'm happy with -> Market high or low -> don't worry, be happy .

OK. It's not really how much cash you have, but what you are going to do about it.

I have a lot of cash compared to what I spend. But I have even more stocks. I need to sell some stocks.

But being as greedy as I am, I will not sell them outright, but sell call options on them at even higher than current prices. Even if the stocks do not hit the higher prices and I do not get to sell the shares, there's cash from the option premiums to add to the stack of cash. More cash either way.

I love cash! You don't buy things with stocks. You do with cash.
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Old 04-13-2021, 04:30 PM   #45
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Can you buy I-Bond from Fido?
Huh? These are US Savings Bonds. You buy them online from the Treasury. They provide an online account, you never see a paper bond, and you can redeem them in whole or in part. Really, it's one of the easier things that the Gov't provides.

Another note, the annual purchase limit is only $10K.
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Old 04-13-2021, 04:34 PM   #46
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They don't send out 1099-IOD for those? I know nothing about I-bonds, but I got 1099-IOD's for treasuries that I used to have.
Interest on I bonds is not taxable until you cash out.

And even when you cash out, I don't think they even send out anything. Not really sure, because I cashed out some I bonds only once. Either I missed the 1099, or they did not send it, and I forgot to report the interest on my tax return.

Later, the IRS sent me a letter saying "You owe us this much money. Pay it!"
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Holding $600K in cash - feeling like an idiot. Options???
Old 04-13-2021, 04:50 PM   #47
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Holding $600K in cash - feeling like an idiot. Options???

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Originally Posted by ut2sua View Post
Thanks everyone for your input. I do feel better after reading all your comments. One option for us is: after I fire, to shift some of our 401K to an IRA and start a 72t to get some $ out (say 20K a year or so). The good thing about that is the 72t will last about 5 years which is just around the time I have access to my IRA at 59.5....

... I have learned somewhere in this forum that Fidelity could help setting such an account up for folks.


Have you actually run a 72t (SEPP) calculator? At current rates it would take a pretty large balance to get 20k/yr. Fidelity does have support for this type of distribution.

I didnít realize your funds were locked up in deferred accounts. My earlier idea of using MYGAs only helps with the ROI concern. Perhaps a large broker for MYGAs would support a 72t using the 10% free withdrawal feature.
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Old 04-13-2021, 05:18 PM   #48
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Interest on I bonds is not taxable until you cash out.

And even when you cash out, I don't think they even send out anything. Not really sure, because I cashed out some I bonds only once. Either I missed the 1099, or they did not send it, and I forgot to report the interest on my tax return.

Later, the IRS sent me a letter saying "You owe us this much money. Pay it!"
You have to log into your Treasury Direct account early the next year and download your 1099-INT. They mail nothing. I have done this.
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Old 04-13-2021, 05:29 PM   #49
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You have to log into your Treasury Direct account early the next year and download your 1099-INT. They mail nothing. I have done this.
This has been my experience as well. And the formatting is pretty horrific. Not a nice PDF with nice boxes, making it obvious which numbers to pay attention to, but rather a paragraph with numbers in it. I had built a ladder and it was kind of a jumble to deal with, come tax time. And the login to Treasury Direct! But it worked and was stable/predictable at least.
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Old 04-13-2021, 05:29 PM   #50
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You have to log into your Treasury Direct account early the next year and download your 1099-INT. They mail nothing. I have done this.
OK. Then, I did not miss or lose that 1099 in the mail.

I suspect that I was not the only one neglecting to pay the taxes on the cashed-out I bonds.

I don't think they even sent me an e-mail reminding me to log in to see the 1099. They don't have to do anything like commercial enterprises, because they are the gummint.
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Old 04-13-2021, 05:41 PM   #51
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OK. Then, I did not miss or lose that 1099 in the mail.

I suspect that I was not the only one neglecting to pay the taxes on the cashed-out I bonds.

I don't think they even sent me an e-mail reminding me to log in to see the 1099. They don't have to do anything like commercial enterprises, because they are the gummint.
Ironic the arbitrator of who does and doesn't need to send 1099s can simply decline to send you one...
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Old 04-13-2021, 05:49 PM   #52
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I last sold I-bonds in 2015 and 2016. I see that I saved screen shots of the 1099's. They are real 1099's, not "a paragraph with numbers". I don't remember if I was prompted to go get the 1099's by a letter or an email, but I set up a spreadsheet every year to estimate my taxes and in those years I would have included entries for the I-bond interest, which would have reminded me to go get the 1099's if nobody else did.

I really don't get the resistance some people have to Treasury Direct. They had two-factor security many years before banks did. I've never had an issue with it.
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Old 04-13-2021, 05:59 PM   #53
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Another note, the annual purchase limit is only $10K.

The limit is $10k/person, so each spouse can get one.
Funny thing though, one year I accidentally bought two $10k bonds. They gave me a message saying the limit is $10k, but never canceled the bond. So I have two for that year. It was a few years ago.
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Old 04-13-2021, 06:05 PM   #54
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The limit is $10k/person, so each spouse can get one.
Funny thing though, one year I accidentally bought two $10k bonds. They gave me a message saying the limit is $10k, but never canceled the bond. So I have two for that year. It was a few years ago.
It's higher now but complicated check the I Bond info page
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Old 04-13-2021, 06:46 PM   #55
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Have you actually run a 72t (SEPP) calculator? At current rates it would take a pretty large balance to get 20k/yr. Fidelity does have support for this type of distribution.

I didnít realize your funds were locked up in deferred accounts. My earlier idea of using MYGAs only helps with the ROI concern. Perhaps a large broker for MYGAs would support a 72t using the 10% free withdrawal feature.
You are correct on the large balance required. I think it is due to the current super low interest rate. It probably won't matter too much since I should have the ability to invest the balance in ways I desire. The required, fixed withdrawal is the only turned off.
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Old 04-13-2021, 06:53 PM   #56
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The limit is $10k/person, so each spouse can get one.
Funny thing though, one year I accidentally bought two $10k bonds. They gave me a message saying the limit is $10k, but never canceled the bond. So I have two for that year. It was a few years ago.
I learned from another thread that a MFJ couple could buy 10K for each spouse (10K*2) plus 5K if you have a federal tax refund of 5K or more. All that would add up to $25K. Then if one has a living trust, another 10K could be bought. This last one is a bit too advanced for me. I would not know what complications ones might run into when it comes time to cash out a such a bond (thru a living trust). So total of 35K per year was stated as the limit.
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Old 04-13-2021, 08:40 PM   #57
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One of my main reasons for holding a large amount of cash is so I can pay the taxes on my Roth conversions. That will eat up a couple hundred K over the next few years. Cash may be a lousy long term investment, but it has some excellent uses for managing your other investments.
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Old 04-13-2021, 08:50 PM   #58
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I had/have this same issue and I bought a 3-year "private placement annuity" that pays 1.7% (that was 4 months ago), higher than typical CD rates. Every little bit helps.

If this interests you, discuss with your FIDO advisor...requires some special "contract" paperwork and minimum investment of $100k.
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Old 04-13-2021, 09:35 PM   #59
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As long as the home and other debts paid off, no problem.
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Old 04-14-2021, 06:50 AM   #60
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ATT is paying 7% dividend. Century Link at 7.8%. SOS at the money calls and puts are paying 10% two weeks out. QYLD is paying almost 12%.
Century Link (CTL) recently rebranded as Lumen Technologies (LUMN).

I hold both LUMN and AT&T (as well as VZ) for the dividend also. Note, however, that CTL cut their dividend (after strongly insisting that they wouldn't on an IR earnings call literally a week or two prior) over 50% - from $2.16 to $1/sh per year.

They're reducing debt substantially, but sales have been flat to declining in many key segments.

CTL bought LVLT, which previously bought Global Crossing. Many (including me as I have history in the industry) believed GLBC to have one of most advanced and comprehensive fiber networks on the planet. It's a heck of an asset, and if LUMN can ever figure out how to capitalize on it, "should" return the company to growth. It's also pretty attractive as an acquisition target for a prospective buyer like Alphabet..

In the meantime, the 7+% dividend - assuming management doesn't cut it AGAIN, is pretty nice income.
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