Inflation - What are you doing different

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Inflation - What are you doing different

Post by GT » Fri Apr 15, 2022 7:54 am

Spun off from a topic in the PP section

Kbg had a great observation on inflation and the root cause
Until supply gets unscrewed (or demand gets crushed) inflation is here for a while. I don't see the Fed crushing demand anytime soon. It hasn't been in their kitbag since the early 80s and I think they will be slow to react as they've been fighting deflation from 2007 to 2021. People are slow to move on to new realities...Fed history suggests they are just like the rest of us in this respect.
I was helping inflation at the beginning of the year by wanting to hurry up and buy before prices got too high (increasing demand) - I paid a premium for two Trek bicycles as just one example.

I have now gone the other way and am holding off on major purchases and eliminating some convenience purchases
Example: I am holding off on:
- A replacement car; current car is fine, a want item
- Replacement fence; current fence is serviceable; I have never been happy with the original construction and want to move to vinyl
- Family vacation - we will be driving so see family versus flying to Disney or similar destination.

I think my final two brain cells snapped when I noticed an 18.5oz can of Progresso soup was $3.00 in my local area.

What changes, if any, will you be making now that CPI (inflation) is 7 to 8%?
If everyone starts tightening their budgets and cuts spending, how long before a recession happens - or will it happen?
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Re: Inflation - What are you doing different

Post by Mountaineer » Fri Apr 15, 2022 9:17 am

Like you, being more discerning about "optional" expenditures. I was recently shocked to see a 10lb bag of frozen chicken wings for $34 at Costco.
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Re: Inflation - What are you doing different

Post by barrett » Fri Apr 15, 2022 2:09 pm

Our driveway needs paving but it can last another couple of years if home repair & construction stay expensive. We had planned on doing it this spring but have decided to hold off. My understanding is that oil prices also affect paving costs quite a bit.

We had hoped to put off replacing our business car but were afraid that our old Volvo would die at an inopportune moment.

So we haven't cut too much yet but inflation is definitely on our radar now. Also, not buying any long-duration bonds! O0
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Re: Inflation - What are you doing different

Post by vnatale » Fri Apr 15, 2022 6:46 pm

Nothing at all.

I'm going the opposite direction.

Bought my house 40 years ago this month. When looking at the house the realtor said, "You cannot see it now because of the snow ... but the driveway is going." 40 years later there is not much left.

New driveway going in in July - $8,200 (last year the same contractor had quoted $6,200 but I think it was for a smaller driveway).

Have never ever had any tree work done on my property. Soon - $1,800 to take down four trees and necessary trimming to two others.

$4,500 - Regrading of backyard including putting in mesh and rocks and buried 55 gallon plastic drums so as to, hopefully, keep water out of the basement during the annual late February / early March snow melt while the ground is still frozen; regrading south side of house and installing two concrete window wells; removing the stumps from three of the tress while grinding the stump of the fourth; removing the stumps of 11 bushes and regrading all the areas of the house behind the former bushes; bringing in a truck load of loam to fill in holes from stump removals.

$1,500 - aluminum garage door and opener

$500 concrete repair of area between top of asphalt driveway and end of cement floor driveway

????? -- New side garage door and any necessary carpentry work to repair areas surrounding both garage doors

???? -- still up in the air on gutters


The last major money I spent on the house was 2005, when I had the roof replaced for $7,000. I paid $30,000 for it 40 years ago.

I am also going to pursue going solar after discovering I have a 30 year roof and not a 20 year roof like I had assumed.

The only issue with solar is that though I am now collecting a healthy amount of Social Security monthly and have self-employment income ... I pay almost no taxes. So I may need to do some Roth conversions to generate the taxes so that I can take the solar credits against those taxes.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Inflation - What are you doing different

Post by GT » Sun Apr 17, 2022 8:39 am

vnatale wrote:
Fri Apr 15, 2022 6:46 pm
Nothing at all.

I'm going the opposite direction.

Bought my house 40 years ago this month. When looking at the house the realtor said, "You cannot see it now because of the snow ... but the driveway is going." 40 years later there is not much left.

New driveway going in in July - $8,200 (last year the same contractor had quoted $6,200 but I think it was for a smaller driveway).

Have never ever had any tree work done on my property. Soon - $1,800 to take down four trees and necessary trimming to two others.

$4,500 - Regrading of backyard including putting in mesh and rocks and buried 55 gallon plastic drums so as to, hopefully, keep water out of the basement during the annual late February / early March snow melt while the ground is still frozen; regrading south side of house and installing two concrete window wells; removing the stumps from three of the tress while grinding the stump of the fourth; removing the stumps of 11 bushes and regrading all the areas of the house behind the former bushes; bringing in a truck load of loam to fill in holes from stump removals.

$1,500 - aluminum garage door and opener

$500 concrete repair of area between top of asphalt driveway and end of cement floor driveway

????? -- New side garage door and any necessary carpentry work to repair areas surrounding both garage doors

???? -- still up in the air on gutters


The last major money I spent on the house was 2005, when I had the roof replaced for $7,000. I paid $30,000 for it 40 years ago.

I am also going to pursue going solar after discovering I have a 30 year roof and not a 20 year roof like I had assumed.

The only issue with solar is that though I am now collecting a healthy amount of Social Security monthly and have self-employment income ... I pay almost no taxes. So I may need to do some Roth conversions to generate the taxes so that I can take the solar credits against those taxes.
How did you select your contractors - if you don't mind me asking...

I have used Angie's list in the past but there have been changes to the website.

Wife uses next door app to seek feedback on general contractors now
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Re: Inflation - What are you doing different

Post by vnatale » Sun Apr 17, 2022 11:37 am

GT wrote:
Sun Apr 17, 2022 8:39 am


How did you select your contractors - if you don't mind me asking...

I have used Angie's list in the past but there have been changes to the website.

Wife uses next door app to seek feedback on general contractors now


Don't mind at all.

For driveway and tree work I asked on Facebook for recommendations for those type people. Then it became a process of them coming here, giving me a price, and me leaning mostly towards lowest price but also how much I liked the contractor.

I got quotes from five different people for the driveway work. I think I got quotes from about 10 for the tree work.

For all the regrading work and the stump removal ... that came from asking my backdoor neighbor for a recommendation for who to do regrading work. I contacted his recommendation that night about 9:45 PM on a Monday night and was shocked when he responded about 15 minutes later, around 10 PM. That was impressive.

We set up an appointment for the following Thursday. During that visit we expanded the work to taking care of all the stumps removals as he explained that since he was going to already be having his equipment on my property to do the regrading he could offer me a better price on the stump removals than if that was a separate job, requiring him to bring his equipment just to do that work.

I liked him a lot. He was the opposite of pushy, trying to convince me that I needed to do this and that. Instead, he kept prefacing everything he was recommending to do with...."I'm not saying you need to do this but..."

The driveway and tree work is both straightforward and well defined. So that was like a commodity, easy to get the quotes from many contractor since they would all be doing the exact same work.

However, in this case of this regrading and stump removal .... and all else he is doing to do...While it is now well defined for what he is going to do ... another contractor(s) would probably make different recommendations. Which would then make it difficult to compare their different estimates since they'd not really be doing the exact same work.

So I decided that since I liked and trusted this contractor so much that I'd just get an estimate from him.

Generally, I get multiple bids for all work. But, in this case, I'm feeling fine just going with him.

Finally, I have a "house committee" of about 16 people. These are friends who have way, way, way more experience than me with this physical world related to all things house. One person was the building inspector of my town for 30 years. Others would do almost all the work themselves that I'm hiring people to do. It was a recognition that I'm lacking in knowledge in this area and I had so many people willing to help me through the process. So their involvement has ranged from coming on my property to see all or Facebook messages or text messages or phone calls or email. They have been quite invaluable to me in helping me understand all of this and to end up making confident decisions.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Inflation - What are you doing different

Post by I Shrugged » Sun Apr 17, 2022 5:52 pm

Because of inflation, we decided to increase our budget for a new house. First of all we essentially had to. But also, we had the money parked and earning nothing. If it’s going to lose 10 or more percent, might as well buy a better house. Which we just did.

We might have bought at the top, who knows. But I don’t think we’ve seen the last of this inflation.
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Re: Inflation - What are you doing different

Post by dualstow » Sun Apr 17, 2022 8:34 pm

No major changes so far, mainly because no big projects are due.
I have a bigger problem with the supply chain and finding a contractor who is willing to do small jobs than I have with inflation.
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Re: Inflation - What are you doing different

Post by GT » Sun Apr 17, 2022 8:50 pm

vnatale wrote:
Sun Apr 17, 2022 11:37 am
GT wrote:
Sun Apr 17, 2022 8:39 am

How did you select your contractors - if you don't mind me asking...

I have used Angie's list in the past but there have been changes to the website.

Wife uses next door app to seek feedback on general contractors now
Don't mind at all.

For driveway and tree work I asked on Facebook for recommendations for those type people. Then it became a process of them coming here, giving me a price, and me leaning mostly towards lowest price but also how much I liked the contractor.

I got quotes from five different people for the driveway work. I think I got quotes from about 10 for the tree work.

For all the regrading work and the stump removal ... that came from asking my backdoor neighbor for a recommendation for who to do regrading work. I contacted his recommendation that night about 9:45 PM on a Monday night and was shocked when he responded about 15 minutes later, around 10 PM. That was impressive.

We set up an appointment for the following Thursday. During that visit we expanded the work to taking care of all the stumps removals as he explained that since he was going to already be having his equipment on my property to do the regrading he could offer me a better price on the stump removals than if that was a separate job, requiring him to bring his equipment just to do that work.

I liked him a lot. He was the opposite of pushy, trying to convince me that I needed to do this and that. Instead, he kept prefacing everything he was recommending to do with...."I'm not saying you need to do this but..."

The driveway and tree work is both straightforward and well defined. So that was like a commodity, easy to get the quotes from many contractor since they would all be doing the exact same work.

However, in this case of this regrading and stump removal .... and all else he is doing to do...While it is now well defined for what he is going to do ... another contractor(s) would probably make different recommendations. Which would then make it difficult to compare their different estimates since they'd not really be doing the exact same work.

So I decided that since I liked and trusted this contractor so much that I'd just get an estimate from him.

Generally, I get multiple bids for all work. But, in this case, I'm feeling fine just going with him.

Finally, I have a "house committee" of about 16 people. These are friends who have way, way, way more experience than me with this physical world related to all things house. One person was the building inspector of my town for 30 years. Others would do almost all the work themselves that I'm hiring people to do. It was a recognition that I'm lacking in knowledge in this area and I had so many people willing to help me through the process. So their involvement has ranged from coming on my property to see all or Facebook messages or text messages or phone calls or email. They have been quite invaluable to me in helping me understand all of this and to end up making confident decisions.
very well thought out!! might use some of the ideas myself
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Re: Inflation - What are you doing different

Post by Dieter » Sun Apr 17, 2022 10:17 pm

Life’s a bit on hold caring for elderly parents

Seeing if I can max out I-Bonds

Last few years been thinking about getting a new car once the chip shortage works itself out and pricing stabilizes

And was thinking of doing a refinance, but didn’t get around to it with life / parent stuff

Doh!

Now, not so much
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Re: Inflation - What are you doing different

Post by vnatale » Mon Apr 18, 2022 8:33 am

GT wrote:
Sun Apr 17, 2022 8:50 pm


very well thought out!! might use some of the ideas myself


After three years STILL have NOT finished my Permanent Portfolio research and implementation. But in this area I am actually getting things done!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Inflation - What are you doing different

Post by Mountaineer » Mon Apr 18, 2022 10:53 am

vnatale wrote:
Mon Apr 18, 2022 8:33 am
GT wrote:
Sun Apr 17, 2022 8:50 pm

very well thought out!! might use some of the ideas myself
After three years STILL have NOT finished my Permanent Portfolio research and implementation. But in this area I am actually getting things done!
Vinny, perhaps you should just buy a Vanguard Target Retirement fund that fits your timing/risk tolerance and be done with it. You will have literally a lot of time freed up for things that are more enjoyable for you and a lot of reduced (potential?) anxiety [I'm guessing since it's been 3 years and you are still not finished you do not find a lot of enjoyment in PP research and implementation]. Sometimes good enough is good enough. Seriously, best wishes.
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Re: Inflation - What are you doing different

Post by Hal » Mon Apr 18, 2022 2:54 pm

Mountaineer wrote:
Mon Apr 18, 2022 10:53 am
vnatale wrote:
Mon Apr 18, 2022 8:33 am
GT wrote:
Sun Apr 17, 2022 8:50 pm

very well thought out!! might use some of the ideas myself
After three years STILL have NOT finished my Permanent Portfolio research and implementation. But in this area I am actually getting things done!
Vinny, perhaps you should just buy a Vanguard Target Retirement fund that fits your timing/risk tolerance and be done with it. You will have literally a lot of time freed up for things that are more enjoyable for you and a lot of reduced (potential?) anxiety [I'm guessing since it's been 3 years and you are still not finished you do not find a lot of enjoyment in PP research and implementation]. Sometimes good enough is good enough. Seriously, best wishes.
+1. Highly recommend Mountaineers approach.
Just buy something like https://investor.vanguard.com/mutual-fu ... olio/vtxvx.
You can add gold in the future if you wish to get a PP.

Enjoy your life!
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Re: Inflation - What are you doing different

Post by Kbg » Mon Apr 18, 2022 4:52 pm

On changes...

I like to earn interest and not pay it. The only exception is my mortgage which I was pretty darn sure that when I locked it at 2.25% for 15 it was going to end up being a great rate. Did I peg the mortgage low, absolutely not...but good enough. One can only get so lucky in these things.

But the basic rule stands...I had been saving up to buy a new vehicle with cash and am still doing that but it completely sucked when I realized that inflation increases WAY exceeded any interest rate savings...I'm still saving and waiting mainly because I want to sit in and drive every option I'm thinking about...and that is basically impossible to do without some serious travel due to inventory shortages.

Side note: I have some very good friends in the trucking business which I've found out over the years is an excellent leading indicator and they are reporting the bottom is falling out on freight prices starting just this month. Accordingly, the economy is likely/may be contracting.
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Re: Inflation - What are you doing different

Post by vnatale » Mon Apr 18, 2022 7:22 pm

Mountaineer wrote:
Mon Apr 18, 2022 10:53 am

vnatale wrote:
Mon Apr 18, 2022 8:33 am

GT wrote:
Sun Apr 17, 2022 8:50 pm


very well thought out!! might use some of the ideas myself


After three years STILL have NOT finished my Permanent Portfolio research and implementation. But in this area I am actually getting things done!


Vinny, perhaps you should just buy a Vanguard Target Retirement fund that fits your timing/risk tolerance and be done with it. You will have literally a lot of time freed up for things that are more enjoyable for you and a lot of reduced (potential?) anxiety [I'm guessing since it's been 3 years and you are still not finished you do not find a lot of enjoyment in PP research and implementation]. Sometimes good enough is good enough. Seriously, best wishes.


The issue is that I put my research on the shelf for months on end while many other things take priority.

Meanwhile I've done quite well just staying where I've been. Which is the investments I initially made in January 2003 in various Vanguard Index Funds with all new investments since then going into cash....which means I essentially have a barbell account -- relative high / moderate risk on one end with all the equity investments and no risk on the other end -- Vanguard's Treasury Fund.

Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Inflation - What are you doing different

Post by jhogue » Tue Apr 19, 2022 9:10 am

Kbg wrote:
Mon Apr 18, 2022 4:52 pm
On changes...

I like to earn interest and not pay it. The only exception is my mortgage which I was pretty darn sure that when I locked it at 2.25% for 15 it was going to end up being a great rate. Did I peg the mortgage low, absolutely not...but good enough. One can only get so lucky in these things.

But the basic rule stands...I had been saving up to buy a new vehicle with cash and am still doing that but it completely sucked when I realized that inflation increases WAY exceeded any interest rate savings...I'm still saving and waiting mainly because I want to sit in and drive every option I'm thinking about...and that is basically impossible to do without some serious travel due to inventory shortages.

Side note: I have some very good friends in the trucking business which I've found out over the years is an excellent leading indicator and they are reporting the bottom is falling out on freight prices starting just this month. Accordingly, the economy is likely/may be contracting.

@ Kbg. A friend of mind who has worked in the shipping industry for 30+ years offered me another point of view:

"I would not bet on the bottom falling out of the trucking rates.

Much like the shipping industry, lack of drivers has caused the supply to go down but the demand has gone up much faster. Trucks in the LA area are pulling down $4000 to $5000 for local runs.

In the steam ship industry not too l long ago a container from China to US west coast was about $2500. The rates are around$15000 to $16000. It is insane but lack of space on ships is going up. We seem to be addicted to cheap Chinese products.

So no, I think we will see the market remain the same for the next two years."
Last edited by jhogue on Tue Apr 19, 2022 9:15 am, edited 1 time in total.
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Re: Inflation - What are you doing different

Post by GT » Tue Apr 19, 2022 9:15 am

Kbg wrote:
Mon Apr 18, 2022 4:52 pm
On changes...

I like to earn interest and not pay it. The only exception is my mortgage which I was pretty darn sure that when I locked it at 2.25% for 15 it was going to end up being a great rate. Did I peg the mortgage low, absolutely not...but good enough. One can only get so lucky in these things.

But the basic rule stands...I had been saving up to buy a new vehicle with cash and am still doing that but it completely sucked when I realized that inflation increases WAY exceeded any interest rate savings...I'm still saving and waiting mainly because I want to sit in and drive every option I'm thinking about...and that is basically impossible to do without some serious travel due to inventory shortages.

Side note: I have some very good friends in the trucking business which I've found out over the years is an excellent leading indicator and they are reporting the bottom is falling out on freight prices starting just this month. Accordingly, the economy is likely/may be contracting.
Good to know on the freight prices being a leading indicator -

I am hearing the same kind of vibe from a person in the Mortgage industry - I was told new mortgage requests have slowed now that 30yr interest rates have gone over 5%. I would assume going forward there will be less homes sold or the price of the homes will have to be reduced to offset the increase in interest rates.

On a side note: Your 2.25% looks like a bargain already as my local Credit Union has 15yr fixed at 5%
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Re: Inflation - What are you doing different

Post by Jack Jones » Tue Apr 19, 2022 10:49 am

I'm applying to higher paying jobs. I spent 10 years at my last job, but after 1 year at my current job, this Biden economy has me begrudgingly interviewing again. I'm quite happy with my current position, but this inflation has me feeling like the frog slowly cooking in a pot.
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Re: Inflation - What are you doing different

Post by dualstow » Tue Apr 19, 2022 11:41 am

Jack Jones wrote:
Tue Apr 19, 2022 10:49 am
I'm applying to higher paying jobs. I spent 10 years at my last job, but after 1 year at my current job, this Biden economy has me begrudgingly interviewing again. I'm quite happy with my current position, but this inflation has me feeling like the frog slowly cooking in a pot.
I’m sorry to hear it, Jack. Wishing you the best of luck in your search!
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Re: Inflation - What are you doing different

Post by Kbg » Tue Apr 19, 2022 12:18 pm

jhogue wrote:
Tue Apr 19, 2022 9:10 am
@ Kbg. A friend of mind who has worked in the shipping industry for 30+ years offered me another point of view:

"I would not bet on the bottom falling out of the trucking rates.
IDK either way...all I know is what was relayed. He's in a very large trucking company and they had a company wide mngt meeting about it due to the concern. I won't get into details but what shocked me was the scale of the price decrease and the speed at which it happened.
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Re: Inflation - What are you doing different

Post by jhogue » Mon May 09, 2022 8:50 am

Like Kbg, I noted that the Fed has aggressively promoted a series of interest rate raises in a vain attempt to beat down a burst of 1970s-style inflation they helped to create. At the beginning of 2022 we got an interest rate lock for a 3.9% 30 year mortgage on a new house plus a HELOC on our current house that covers the cash downpayment to avoid paying private mortgage insurance. We closed on the new house last week, and I note in passing that interest rates for 30 year mortgages are now heading north of 5 ½%. If inflation/interest rates continue to rise it is possible we may never pay the mortgage off. On the other hand, should interest rates drop again to COVID levels (which I think is highly unlikely), we keep the option to pay it off or refinance it at a lower rate.

Simultaneously, I have embraced the I-bond “gift box” strategy. For 2022, we maxed out I-bonds at a guaranteed annualized rate of 7.12%/9.62%. I then bought $10K each as 2023 gifts for my wife and I in the week before the 1 May 2022 rate re-set, also at 7.12%/9.62%. After the 1 May re-set I bought yet another $10K each as 2024 gifts for my wife and I. All of the out-year I-bond purchases are guaranteed to return 9.62% for at least six months.
For more detail on the I-bond gift strategy see:
The Finance Buff
https://thefinancebuff.com/buy-i-bonds-as-gift.html


Who knew that interest rate volatility could be so fun and profitable?
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Re: Inflation - What are you doing different

Post by barrett » Mon May 09, 2022 10:59 am

jhogue wrote:
Mon May 09, 2022 8:50 am
Simultaneously, I have embraced the I-bond “gift box” strategy. For 2022, we maxed out I-bonds at a guaranteed annualized rate of 7.12%/9.62%. I then bought $10K each as 2023 gifts for my wife and I in the week before the 1 May 2022 rate re-set, also at 7.12%/9.62%. After the 1 May re-set I bought yet another $10K each as 2024 gifts for my wife and I. All of the out-year I-bond purchases are guaranteed to return 9.62% for at least six months.
For more detail on the I-bond gift strategy see:
The Finance Buff
https://thefinancebuff.com/buy-i-bonds-as-gift.html
Had never heard of this, jhogue. Is the idea that the recipient does nothing until a time comes when they decide to not purchase I-Bonds in any given year and then decided to "receive" them?

Apologies if this is a dumb question. I am tired and just read the link once.
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Re: Inflation - What are you doing different

Post by jhogue » Wed May 11, 2022 11:53 pm

Gifting I-bonds is a strategy to buy more than the $10K per person limit by buying I-bonds as gifts. Gifting is a two part operation. For instance, you and your wife could each buy your quota of $10K I-bonds in 2022, and then each buy another $10K as gifts for each other. The gifted I-bonds are then held in TreasuryDirect's"gift box, earning (the very high) current interest rate until they are delivered to each other's TreasuryDirect account in 2023. Completely legal, as long as you observe the $10 K per person per year limit.

The advantage of the gift strategy is that it allows each spouse to earn additional interest at current rates when they are at their highest.

I was myself skeptical of whether TreasuryDirect would permit this gift strategy, but I tried it in 2020-2021 and our offsetting gifts were accepted. I am repeating the gift strategy in 2022 for out-years 2023 and 2024. With two spouses that increases the potential I-bond purchase to $60,000 @ 9.62% interest for 6 months. If interested, I highly recommend investors read Sit's finance buff blog first.

Notes:
1. I-bond gifts are irrevocable.
2. I -bond gifting is a conservative strategy, but nonetheless speculation on the direction of interest rates. That is, it is possible that rates could go down, which is why I don't expect I will be buying more I-bonds any further into the future than one or two years.
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Re: Inflation - What are you doing different

Post by barrett » Thu May 12, 2022 6:16 am

jhogue wrote:
Wed May 11, 2022 11:53 pm
Gifting I-bonds is a strategy to buy more than the $10K per person limit by buying I-bonds as gifts. Gifting is a two part operation. For instance, you and your wife could each buy your quota of $10K I-bonds in 2022, and then each buy another $10K as gifts for each other. The gifted I-bonds are then held in TreasuryDirect's"gift box, earning (the very high) current interest rate until they are delivered to each other's TreasuryDirect account in 2023. Completely legal, as long as you observe the $10 K per person per year limit.

The advantage of the gift strategy is that it allows each spouse to earn additional interest at current rates when they are at their highest.

I was myself skeptical of whether TreasuryDirect would permit this gift strategy, but I tried it in 2020-2021 and our offsetting gifts were accepted. I am repeating the gift strategy in 2022 for out-years 2023 and 2024. With two spouses that increases the potential I-bond purchase to $60,000 @ 9.62% interest for 6 months. If interested, I highly recommend investors read Sit's finance buff blog first.

Notes:
1. I-bond gifts are irrevocable.
2. I -bond gifting is a conservative strategy, but nonetheless speculation on the direction of interest rates. That is, it is possible that rates could go down, which is why I don't expect I will be buying more I-bonds any further into the future than one or two years.
Thanks for the explanation, jhogue! In the meantime I had re-read the link you posted and the gift-box strategy sounds fairly easy to pull off. We (wife and I) have already bought $10,000 each for 2022 and I am thinking that we may wait until the September inflation numbers come out and decided then if we want to gift box each other additional bonds. Though getting the clock ticking now certainly has its own advantages. I guess one of the advantages of front loading could be that the window just closes on this opportunity. After all, parameters on savings bonds have been ever shifting as long as they have been around.

I guess my biggest concern is that this would add another layer of complexity to our investments for the time being. Having a bunch of old paper savings bonds in a safe deposit box is easy for my wife to understand. The gift box strategy would for sure make her eyes glaze over. It's not impossible that I kick the bucket before I decide to "receive" our bonds. Do you plan on doing so for your 2023 gifts in early January of next year? I mean, there's no advantage to waiting after 1/2/23, right?
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vnatale
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Re: Inflation - What are you doing different

Post by vnatale » Thu May 12, 2022 6:16 am

jhogue wrote:
Wed May 11, 2022 11:53 pm

Gifting I-bonds is a strategy to buy more than the $10K per person limit by buying I-bonds as gifts.


Not directly related to this discussion but DEFINITELY related to iBonds....

On my 2019 tax return I directed $5,000 of my refund to go towards purchasing iBonds. Instead, I later received a $5,000 refund from the IRS.

On my 2020 tax return I directed $5,000 of my refund to go towards purchasing iBonds. I had noted where I'd not done all properly regarding the preparation of my 2019 return and corrected that on this 2020 tax return. Many, many, many months later after filing that return I received paper iBonds in the mail.

On my 2021 tax return I directed $5,000 of my refund to go towards purchasing iBonds. I had completed the return for 2021 the same as I had for 2020 regarding iBonds. To my dismay the IRS again last week sent me a $5,000 refund. I assume I have no further recourse regarding this?

Thinking about it further the only differences in filing the returns and the commonalities with the unsuccessful attempted purchases of the iBonds were that the successful 2020 was paper filed while the 2019 and 2021 returns were e-filed.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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