Thanks for the post. I’ve been considering gradually moving a portion of our bond holdings (including a TIPS fund) to a TIPS ladder. The big draw of individual TIPS is matching individual bond maturities to future liabilities, which in our case we don’t really know. However, we do know we’ll have RMDs and can project what those will be, so maybe it makes sense to consider those our liabilities and ladder TIPS in those amounts. Maybe… Btw, if one is taking from other bonds which are also down in price to buy TIPS, are they as good a deal? I don’t know.
Great article John, and this comment is also one to all remember. “Effective rate is a reporting statistic, useful for describing what happened. Marginal rate is the decision variable, the only one that tells you whether the next dollar converted is worth converting.”
Several days ago someone linked to a Bill Bernstein article that sent me down a rabbit hole of his recent writings including this different perspective. https://www.advisorperspectives.com/articles/2025/09/29/widow-tax-hit-debunked
I’ve tended to think it’s better to purchase a car that’s a couple of years old, but several years ago I was posted overseas and looking at a slightly used Mazda 6. As I was soaking on it I decided to swing by a dealer to see a new one; it was on my way so why not? Lo and behold it was the better deal, and that was just the economics, never mind the hassle factor. As you and Tom Brady have reminded me, my time and energy to spend on this has a value.
I agree with Dr Lefty, and then within taxable accounts, whether to take funds from the money market or the brokerage depends on how much is in the money market. If it’s more cash than you would like to hold, use it. If not, take from the brokerage account. Since the purchase isn’t today and you see coming, you could go ahead and move funds from the brokerage to the money market so it’s ready to go without an additional transaction.
Nice perspective Mark. We spent most of June on the Moray Coast. We broke up our usual routine of coastal walks with an inland walk, and came across a small herd of cows that lined up at the fence to say hello. I thought they were angling for a snack, but maybe they were hoping for a tune.
John, just to be clear for everyone, I think by “bunching into Q4” you mean a large Q4 estimated payment. Whereas a large withholding in Q4 is treated as being withheld throughout the year, no extra form needed. Again, great article.
The withholding can be from anywhere. One might have income from a pension, part time work, social security, dividends, capital gains (both distributed from funds and realized through sales), and Roth conversions. The withholding from any or a combination of these at any time during the year counts as being withheld through the year and applies to the overall tax obligation.
Comments
Thanks for the post. I’ve been considering gradually moving a portion of our bond holdings (including a TIPS fund) to a TIPS ladder. The big draw of individual TIPS is matching individual bond maturities to future liabilities, which in our case we don’t really know. However, we do know we’ll have RMDs and can project what those will be, so maybe it makes sense to consider those our liabilities and ladder TIPS in those amounts. Maybe… Btw, if one is taking from other bonds which are also down in price to buy TIPS, are they as good a deal? I don’t know.
Post: Treasury Inflation Protected Securities (TIPS) are a Generational Bargain Right Now
Link to comment from July 27, 2026
Great article John, and this comment is also one to all remember. “Effective rate is a reporting statistic, useful for describing what happened. Marginal rate is the decision variable, the only one that tells you whether the next dollar converted is worth converting.”
Post: Widow Tax
Link to comment from July 26, 2026
Maybe, but I suggest you have a look at the Bernstein article I linked to before you decide.
Post: Will Your Death Double Your Spouse’s Tax Bill?
Link to comment from July 16, 2026
Several days ago someone linked to a Bill Bernstein article that sent me down a rabbit hole of his recent writings including this different perspective. https://www.advisorperspectives.com/articles/2025/09/29/widow-tax-hit-debunked
Post: Will Your Death Double Your Spouse’s Tax Bill?
Link to comment from July 16, 2026
I’ve tended to think it’s better to purchase a car that’s a couple of years old, but several years ago I was posted overseas and looking at a slightly used Mazda 6. As I was soaking on it I decided to swing by a dealer to see a new one; it was on my way so why not? Lo and behold it was the better deal, and that was just the economics, never mind the hassle factor. As you and Tom Brady have reminded me, my time and energy to spend on this has a value.
Post: Buying a car in retirement
Link to comment from July 15, 2026
Thanks for mentioning the USAA service; it’s been so long since buying a car that I’d forgotten about it.
Post: Buying a car in retirement
Link to comment from July 15, 2026
I agree with Dr Lefty, and then within taxable accounts, whether to take funds from the money market or the brokerage depends on how much is in the money market. If it’s more cash than you would like to hold, use it. If not, take from the brokerage account. Since the purchase isn’t today and you see coming, you could go ahead and move funds from the brokerage to the money market so it’s ready to go without an additional transaction.
Post: Buying a car in retirement
Link to comment from July 14, 2026
Nice perspective Mark. We spent most of June on the Moray Coast. We broke up our usual routine of coastal walks with an inland walk, and came across a small herd of cows that lined up at the fence to say hello. I thought they were angling for a snack, but maybe they were hoping for a tune.
Post: So Maybe That’s What It’s All About
Link to comment from July 12, 2026
John, just to be clear for everyone, I think by “bunching into Q4” you mean a large Q4 estimated payment. Whereas a large withholding in Q4 is treated as being withheld throughout the year, no extra form needed. Again, great article.
Post: Don’t Let a Roth Conversion Trigger a Penalty
Link to comment from July 12, 2026
The withholding can be from anywhere. One might have income from a pension, part time work, social security, dividends, capital gains (both distributed from funds and realized through sales), and Roth conversions. The withholding from any or a combination of these at any time during the year counts as being withheld through the year and applies to the overall tax obligation.
Post: Don’t Let a Roth Conversion Trigger a Penalty
Link to comment from July 11, 2026