How do you invest the Cash portion?

Discussion of the Cash portion of the Permanent Portfolio

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vnatale
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Re: How do you invest the Cash portion?

Post by vnatale » Thu Sep 09, 2021 11:47 am

sophie wrote:
Tue Dec 17, 2019 8:21 am

Kbg, I suspect we all have access to the information we need to optimize tax strategy. I wouldn't expect that a financial planner would be any better at that than you are. Professionals are not incentivized to spend lots of time figuring out complexities, they'll tend to use simple one size fits all rules.

Developing a spreadsheet simulator to estimate taxes AFTER retirement would be dead useful. iORP is the closest thing to an online source, but it seems to make some simplistic assumptions. It always wants you to spend every taxable penny and Roth convert your entire 401K before taking SS.

In addition to dealing with marginal tax brackets in retirement, here's the fiscal parameters I know about (in part thanks to this board):

top of 12% tax bracket - limit for avoiding taxes on qualified dividends and capital gains
Saver's credit (< age 65)
Obamacare (< age 65) - 4x poverty level.
Medicare premiums - (> age 65) - don't remember what the threshold is.
(if you live in NY) - $85,000 income for enhanced STAR rebate, $50,000 income for SCHE (rebate of 50% of property taxes) (> age 65)

Any to add to this?


That is an impossible task for someone who would have been like me.

Starting Medicare at age 65...still working with a fairly high taxable income...and trying to manage income so as to not get tagged with additional Medicare premium due from having too high an income.

I delayed as long as possible taking Social Security until I finally did this year at age 70. But there was no room in those 65 to 70 years to do any Roth conversions.

Since I'm only getting 7 months of Social Security this my first year...there may possibly be some room for Roth conversions this year. But maybe not if that is going to cause more of my Social Security income to be taxed because then I can only view it as an additional tax on the Roth conversions.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats."
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Re: How do you invest the Cash portion?

Post by pp4me » Fri Sep 17, 2021 4:16 pm

vnatale wrote:
Thu Sep 09, 2021 11:47 am
Starting Medicare at age 65...still working with a fairly high taxable income...and trying to manage income so as to not get tagged with additional Medicare premium due from having too high an income.
Say what? I assume you are talking about part B which I have not started yet because I'm still insured through my wife. It goes up if you're income is too high? I'll have to actually read that booklet they send out every year.
vnatale wrote:
Thu Sep 09, 2021 11:47 am
I delayed as long as possible taking Social Security until I finally did this year at age 70. But there was no room in those 65 to 70 years to do any Roth conversions.
I didn't do any Roth conversions either but I did manage to sell VTI in a taxable account during the delay and buy my wife a new Honda CRV to drive to work without any capital gains tax.
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vnatale
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Re: How do you invest the Cash portion?

Post by vnatale » Sat Sep 18, 2021 5:13 am

pp4me wrote:
Fri Sep 17, 2021 4:16 pm

vnatale wrote:
Thu Sep 09, 2021 11:47 am

Starting Medicare at age 65...still working with a fairly high taxable income...and trying to manage income so as to not get tagged with additional Medicare premium due from having too high an income.


Say what? I assume you are talking about part B which I have not started yet because I'm still insured through my wife. It goes up if you're income is too high? I'll have to actually read that booklet they send out every year.

vnatale wrote:
Thu Sep 09, 2021 11:47 am

I delayed as long as possible taking Social Security until I finally did this year at age 70. But there was no room in those 65 to 70 years to do any Roth conversions.


I didn't do any Roth conversions either but I did manage to sell VTI in a taxable account during the delay and buy my wife a new Honda CRV to drive to work without any capital gains tax.


You can read about it here: https://thefinancebuff.com/medicare-irm ... ckets.html
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats."
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mathjak107
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Re: How do you invest the Cash portion?

Post by mathjak107 » Tue Nov 02, 2021 4:19 am

Ironically if the money market fund managers think the debt ceiling won’t be raised short term treasuries can go from short supply to no supply .

Since most money markets have these instruments due in 7 days there can be liquidity issues in treasury money markets and supply issues since they are restricted to what they can buy .

The fed would likely use repos to keep things going as that is their main tool but since the money markets pp users like to use money markets that don’t use repos the irony is they can be at greater risk then those that do .

While few money markets have actually broken the buck I had mine fail in 2008 and we lost about 3% when Lehman paper turned toxic .

I doubt the ceiling won’t be raised but it is an interesting conundrum how risk can shift and what was considered safer can be actually riskier
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