The big players in the market bid on the securities / interest rates at the auction. The result sets the interest rates for the non-competitive buyers.
https://www.treasurydirect.gov/auctions/how-auctions-work/#hold
2 Likes
What, are you saying we aren’t the big players?
2 Likes
Maybe we CCers should all team up and do a Reddit-like thing. Meme treasures, here we come! 
(We already wiped out Bonne Maman calendars and hot honey off Amazon. Just saying!)
2 Likes
From my understanding if you buy from Treasure Direct, you still have to transfer to a bank or brokerage. So might as well do it from Fidelity. Plus you don’t need a 45 day holding direct with Fidelity, while you do with Treasure Direct. Plus there’s a paper form to fill in to sell at Treasure Direct, you have to mail them in, which could take weeks with the government.
In short, it’s more complicated with Treasury Direct than with Fidelity.
2 Likes
I always buy with a call to Fidelity. The rep can tell me the interest rates (depending on the maturity date) before I place my order.
3 Likes
What are pros/cons of rolling over a 401k into IRA?
I retired 2 years ago at age 58, kept my traditional/pretax 401k at Fidelity. No immediate need for withdrawal, intention was to just let it grow (though of course in this markets it has shrunk). I know that I have option to roll it over to Fidelity (or other) IRA but have not done so.
401k is probably better in case you get lawsuit.
4 Likes
Depends on the state law. Some states protect Rollover IRA’s against liability similarly to 401k.
Co-mom: since your employer’s plan is in Fidelity, you probably already have access to extremely low fees for your funds. But one reason to rollover, is to obtain funds with lower management/Admin fees. Another reason is simplicity, by moving all of your funds into the same brokerage. (Just makes it easier for surviving spouse & executor.)
3 Likes
Interesting point. We do carry Umbrella insurance, so not sure a factor for me.
Any age limit for keeping as 401k?
No age limit, but from my sister(a few years ago), the laws might have changed today, if you have multiple 401k accounts, you have to take minimum distribution from each account, while with IRA, multiple accounts are still treated as a single account.
1 Like
The biggest pro for us was to avoid RMD. We rolled over all 401k’s to Roth IRA.
2 Likes
yes, that is correct. You need to take teh RMD from each 401k account.
2 Likes
When you rolled over to Roth, did you withhold the taxes (supposedly not ideal investment-wise) or pay tax from savings?
Note to anybody within a few years of age 65 considering Roth rollover… keep in mind any potential IRMAA (extra medicare charges) that could happen
https://www.thestreet.com/retirement-daily/your-money/converting-dont-forget-medicare
4 Likes
Nearly every study I’ve seen suggests that if you cannot pay the taxes due from existing savings, a conversion is not worth doing. In other words, don’t have the taxes withheld.
And yes, definitely be aware of IRMAA limits.
4 Likes
I pay with my after tax account. The IRRMA income level is higher this year due to inflation.
1 Like
We paid the tax from savings. It was a lot. Yes, we paid the highest IRRMA that year. Before the tax law change, heirs could take lifetime to withdraw. Not anymore. I think it is still advantageous. If not for RMD, I am not sure if Roth is better or not.
1 Like
Roth conversion is better only if your tax marginal rate today is less than what you think it might be with RMD’s, pension (if any) & SS.
Or, if your Roth is for your heirs, if your tax rate today is less than the tax rates of your heirs when they might inherit. For example, your marginal rate today is somewhat low and your kid/heir is making bank in New York City (~50% tax) and you expect they will remain there…
5 Likes
I don’t really think that far about my kids. I only have to worry about myself. But I do estimate ahead many years base on my personal situation.
2 Likes
Is there a 529 plan that lets one invest in Treasuries? Our NC program sucks!
Yea, my research online (and our Financial Advisor) says Roth rollover only worthwhile if you can pay tax out of savings.
But with large rollovers, that’s a lot of money… kindof feels like trying to pay college bills as a retiree. We’ve done some Roth rollover already, which will result in IRMAA “tax” (but only for hubby, older and on Medicare). He is keen to do some more due to RMD concerns down the road. I’ll only be willing to do more (and pay tax from savings) if we can do it in a way that still allows us ability to fund home renovations and generously fund our travels in these current “Go-Go” early years of retirement.
We have a lot of time to ponder this 2023 decision. Just rambling here in case others are going through same thought process.
3 Likes