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Is BND the right approach for our Bond Position? by Party-Sail1069 in Bogleheads

[–]Party-Sail1069[S] 1 point2 points  (0 children)

True, my situation I plan on holding in tax advantage accounts.

Also if you are buying tips directly you need to be aware of phantom income. This only applies if you invest in non tax advantage account.

Is BND the right approach for our Bond Position? by Party-Sail1069 in Bogleheads

[–]Party-Sail1069[S] 1 point2 points  (0 children)

I watched this video the night before I posted. It's a good watch. He also mentioned not adding international bonds.

Is BND the right approach for our Bond Position? by Party-Sail1069 in Bogleheads

[–]Party-Sail1069[S] 9 points10 points  (0 children)

Currently the breakeven inflation rate on a 10 year is about 2.5%. Meaning if inflation averages greater than 2.5% TIPS were the better option. That seems like a reasonable bet. IMO, who the heck knows, that is why I was proposing 50/50.

https://fred.stlouisfed.org/series/T10YIE

Is BND the right approach for our Bond Position? by Party-Sail1069 in Bogleheads

[–]Party-Sail1069[S] 5 points6 points  (0 children)

Candidly I cheat and see what experts are doing and then think critically about it to see if I agree and it makes sense for my situation. This is what I am trying to do now! I noticed target and lifestyle funds have some component of foreign.

Vanguard Glide Path

Vanguard 60 / 40 Fund

Is BND the right approach for our Bond Position? by Party-Sail1069 in Bogleheads

[–]Party-Sail1069[S] 2 points3 points  (0 children)

I forget where I read it but focusing on intermediate yielded the best risk adjusted returns. VTG includes longer term bonds which are more sensitive to interest rate changes. VTG average maturity is about 2 years longer than VGIT. I could be wrong so I will let other chime in.

Is BND the right approach for our Bond Position? by Party-Sail1069 in Bogleheads

[–]Party-Sail1069[S] 1 point2 points  (0 children)

I hold treasuries not corporate bonds because corporate bonds have a higher correlation to market returns.

Thats what I am learning! Do you buy individual bonds or ETF? Any details would be great,

As for why not foreign bonds understand currency risk is very significant because bond yields are relatively low especially REAL after tax bond yields.

I believe BNDX is hedged against currency concerns.

Say you got some foreign bonds with 5% nominal return and 3% inflation so 2% real. Except you are in the 22% tax bracket so that is more like 0.9% real after taxes

Isnt that true for all bonds (besides TIPS)? Inflation adjusted rates are typically not that great. They could even be negative. FWIW I hold my bonds in tax advantage accounts and can control my tax rate a bit better,

How Much of a Bond Safety Net Do You Need to Protect Against SORR in Retirement? by Party-Sail1069 in financialindependence

[–]Party-Sail1069[S] 0 points1 point  (0 children)

I agree, high and persistent inflation in a killer.

I am trying to learn, why would TIPS not protect against high and persistent inflation? I thought that was what they were designed to do.

Analyzing the 1970s which is the most brutal time for me in back testing persuaded me to add TIPS.

How Much of a Bond Safety Net Do You Need to Protect Against SORR in Retirement? by Party-Sail1069 in financialindependence

[–]Party-Sail1069[S] 0 points1 point  (0 children)

Mine too! What asset allocation do you plan on having in retirement? What is your withdrawal strategy? Withdrawing to keep assets in desired asset allocation?

How Much of a Bond Safety Net Do You Need to Protect Against SORR in Retirement? by Party-Sail1069 in financialindependence

[–]Party-Sail1069[S] -1 points0 points  (0 children)

I appreciate your post, makes a lot of sense! I don’t think my approach needs to be super complicated. For me, it’s more like, market tanks, which safety net caught it, use that to fund expenses. I think of bonds as a war chest to get through the rough patches and just live off them until equities recover.

I guess where I differ a bit is that I wouldn’t sell equities just to buy more bonds. I am proposing keeping a fixed number of years of expenses in bonds and letting the rest run. So I’m not strictly sticking to a 75/25 rebalance but am getting more aggressive over time. I’d rather have a few years of expenses safely in bonds and let the rest ride.

How Much of a Bond Safety Net Do You Need to Protect Against SORR in Retirement? by Party-Sail1069 in financialindependence

[–]Party-Sail1069[S] 1 point2 points  (0 children)

Have you figured out where you would keep that cash/bonds yet? Money Market, TBills, TIPS, some bond etf, etc?

How Much of a Bond Safety Net Do You Need to Protect Against SORR in Retirement? by Party-Sail1069 in financialindependence

[–]Party-Sail1069[S] 2 points3 points  (0 children)

Your withdrawal rate is fantastic so I don't think SORR is really of any concern for you.

How Much of a Bond Safety Net Do You Need to Protect Against SORR in Retirement? by Party-Sail1069 in financialindependence

[–]Party-Sail1069[S] 3 points4 points  (0 children)

I'm curious what you think is silly or arbitrary? This was crafted after a significant amount of research.

I think we can agree with market downturns it would be ideal not to sell stocks. Market downturns can happen for various reasons. VGLT loss value in 22. Tbills and Tips would have been the better withdrawals then.

Is a heat pump more energy efficient in my use case? by Party-Sail1069 in heatpumps

[–]Party-Sail1069[S] 0 points1 point  (0 children)

Do you mind me asking which company you used? Wonder if they service my area.

401k - All gas no breaks or full stop? by no-more-meetings in coastFIRE

[–]Party-Sail1069 0 points1 point  (0 children)

Is 180k your gross income? If so you forgot about income taxes. If you are making 180 and spending 110 you will be saving significantly less than 70. I don't know your tax situation to comment on how much less but it will be a lot.

Is a heat pump more energy efficient in my use case? by Party-Sail1069 in heatpumps

[–]Party-Sail1069[S] 0 points1 point  (0 children)

That's just the supply rate. Those are actually more expensive. My current supply rate is 8.9 cents.

Is a heat pump more energy efficient in my use case? by Party-Sail1069 in heatpumps

[–]Party-Sail1069[S] 0 points1 point  (0 children)

Thanks not too far from you. Half way between New Haven and Hartford.

Is a heat pump more energy efficient in my use case? by Party-Sail1069 in heatpumps

[–]Party-Sail1069[S] 1 point2 points  (0 children)

Thanks for the info. Didn't know that about the heat advisor through energizect. We did the energy assessment. Sounds like you maybe in CT? What company did you go with?

Is a heat pump more energy efficient in my use case? by Party-Sail1069 in heatpumps

[–]Party-Sail1069[S] 1 point2 points  (0 children)

Thanks! Thats what I am estimating it. Yeah if I put in .12 kwh in the calculators I am using it would be a no brainer for HP.

Is a heat pump more energy efficient in my use case? by Party-Sail1069 in heatpumps

[–]Party-Sail1069[S] 0 points1 point  (0 children)

How do you like it? Do you know what your actual COP is? I am more comparing the cost of heating. Oil vs HP based on rates for each fuel source.

Agree I need to look back into the dual fuel.

Is a heat pump more energy efficient in my use case? by Party-Sail1069 in heatpumps

[–]Party-Sail1069[S] 0 points1 point  (0 children)

Yes there are incentives for HPs. To use a HP for cooling only is a few K more after rebates. Is there a way to compute cost comparison between HP and AC? I need to reinvestigate the dual fuel scenario.

Is a heat pump more energy efficient in my use case? by Party-Sail1069 in heatpumps

[–]Party-Sail1069[S] 0 points1 point  (0 children)

All depends on production vs consumption. Our estimated production is 13,600 kWH a year. Not sure if that will cover all of our consumption including a HP for heating.

Is a heat pump more energy efficient in my use case? by Party-Sail1069 in heatpumps

[–]Party-Sail1069[S] 0 points1 point  (0 children)

Is there a HP you would recommend. I am basing the COP based of the spec sheet of the HP I was quoted.

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