AUTHOR: Humble Reader on 7/7/2025 FIRST: David Powell on 7/7/2025 | RECENT: David Lancaster on 7/8/2025
Comments
The article at Morningstar explains the current status of QCD donations made by IRA account check-writing. It could not be timelier for us since we are making our QCD donations for 2026 this very week. We write checks drawn on my IRA account. The only difference this year is that the QCDs will also count toward my RMD since this is also my first RMD year. We enabled check-writing on this account specifically to do QCDs, and the IRA checks are only used for for QCDs. Distributions for my RMD or other purposes are handed by direct IRA transfers to our brokerage account. We make sure that all the requirements for a QCD donation are met. Our QCD spreadsheet includes the tax ID for every organization, which we have verified to be a 501c3. And certain non-501c3 governmental/educational institutions (such as state universities) also qualify. As the donation receipts are received we verify that they also meet the QCD requirements. Everything seemed fine, until code Y came along. The Morningstar article describes better than I can the various issues code Y triggers. Our plan is to ignore code Y unless there is additional clarification. As we did last year we will document everything and hand our tax preparer our QCD files and let them handle it. It is disappointing that more than a year after code Y was announced that “tax experts” are not able to provide clear and objective guidance but can only offer opinions.
This is very bad news. ID.me is a private company that collects and stores biometric data. We will not provide our biometric data to this privately owned company. We use LogIn.gov for access to our online Social Security accounts. I did once start the process of creating an ID.me but when I realized what was required I quickly exited. I am not going to go all political here but let’s just say that it is best to keep a low online profile: no social media accounts, no online storage, stay anonymous as much as possible, log-in only when required, … and a lot of other measures. Giving up our biometric identities to access our I-bonds is beyond the pale. We will redeem all of our I-bonds rather than create ID.me log-in’s. But, we bought $20,000 in I-bonds earlier this year and will not be able to redeem them before the October 28, 2026 deadline. And there is also the problem of access to the 1099 at the end of the year. We could do nothing. We have not redeemed anything this year so there would not be any 1099 for 2026. Perhaps wait until the last I-bond is redeemable and hope there will be some method available to close everything out then. But do we continue to count our I-bonds in our stable value assets if we cannot access them?
I worked as an embedded software engineer in both the industrial automation and automotive sectors. I never had the opportunity to use the neural networks that current AI is based on but did implement some clever self-adjusting “learning” algorithms over the years. I just finished watching the 12-lecture “Understanding Artificial Intelligence” by professor of philosophy Dr. Patrick Grim on Great Courses streaming, which I highly recommend. I am more concerned about the national debt than Artificial Intelligence (which I think should more correctly be called Simulated Intelligence). The national debt issue is a political issue and in the current anti-tax environment cannot be solved. Only when honest and forthright politicians are voted into power in both legislative and executive branches will this issue be addressed. Artificial Intelligence does now and will increasingly disrupt our relationship with work. What is new this time is that it is not just those who perform physical labor but also those who do intellectual labor are affected. The AI promise: The decoupling of economic productivity from the number of hours of human labor input. This started with the industrial revolution, mass production, and accelerated with electronic control systems (automation) used in modern manufacturing. The combination of advanced sensor technology with AI logic will expand the impact to all areas of human labor, from research scientists to agricultural field workers. I am not concerned about the doomsayers talk about an “AI singularity” where the AI becomes smarter than us biological intellects and decides we are not needed. The affect of AI that that is concerning is how our society will respond when all of our material needs can be satisfied with much, much less labor than is currently used. Will our political and economic systems be able to adjust so that everyone wins?
When a CD matured 3 months ago we moved the proceeds to a local credit union and locked in a 19 month CD “special” at 4.30%. Current best rate at that CU is 13 months at 4.10%. Also holding money market fund in IRA at 3.52%. Will know in a few weeks what we earned on fixed income in 2025 when all the 1099’s roll in. Not sure how to estimate what our earnings will be in 2026 since who knows what the interest rates will do? Also not sure what we will do if interest rates drop to below inflation rate.
Thank you Randy for your suggestion for how to handle unplanned expenses. So to fund an unplanned expense of X amount: 1) Sell X amount of a growth fund in the Roth account and transfer cash out of the Roth for the expense. 2) And simultaneously sell X amount of a stable value fund in the traditional IRA account and buy X amount of the growth fund. This does make sense. A bit more complicated and perhaps some additional trading costs, but it would eliminate the “drag” of holding stable value in the Roth account. Eventually the stable value would need to be replenished during rebalancing but presumably that would be done when the market has recovered. But that is another topic: “market timing when rebalancing”.
Last year we completed increasing our stable value investments from 9.5% in 2022 to 21.5% now. And, while most of our Roth account investments are growth funds, a portion is held in an ultra-short term (i.e. stable value) bond fund to have the flexibility to be able to access as needed on a tax-free and low market risk basis. We can tap the stable value in Roth for unplanned expenses without being pushed into a higher tax bracket or forced to sell equities in a market downturn. More stable value (a money market fund) in my traditional IRA account is now being used for my RMD, transferring fund shares into our brokerage account with a portion eventually being cashed.
Here is a tip for finding lost stuff: Use a flashlight. Yes more light obviously helps, but the real benefit is that it focuses your attention and perception to only the area that is being illuminated. And sweeping the flashlight around in a methodical pattern assures that every area is being fully examined.
Not my decision, “retired” at 71 when the company decided it was time. The company was and still is struggling and I ended up in a 30% staff cut. My plan was always to work full time and delay Social Security benefits until 70, which I did, and then do a phased retirement on a part time or contract basis. I was financially prepared for retirement with or without any additional earned income. And being fired instead of voluntarily retiring did result in a few months of severance pay and a nice bonus. As for the non-financial aspects of retirement, I am now fully busy working on stuff I wanted to do but never got around to doing while working on company stuff.
I have had similar thoughts about concentration risk for most of this year. I ended up trimming some of my high-flyers and increasing stable-value investments in the form of money market and ultra-short term bond funds, all within IRAs to avoid tax consequences. I did look at international investments, which are having a very good year, but decided they did not offer enough trade-off between potentially reducing risk and sufficient long-term performance when compared with domestic U.S. investments.
Assuming married filing jointly, both at least 65, and all income is “ordinary”: Maximum gross income 2025 for 12% bracket: $143,650 Maximum gross income 2026 for 12% bracket: $148,300 (increase of $4,650) But Social Security benefit income and other non-ordinary income will affect these amounts.
Comments
The article at Morningstar explains the current status of QCD donations made by IRA account check-writing. It could not be timelier for us since we are making our QCD donations for 2026 this very week. We write checks drawn on my IRA account. The only difference this year is that the QCDs will also count toward my RMD since this is also my first RMD year. We enabled check-writing on this account specifically to do QCDs, and the IRA checks are only used for for QCDs. Distributions for my RMD or other purposes are handed by direct IRA transfers to our brokerage account. We make sure that all the requirements for a QCD donation are met. Our QCD spreadsheet includes the tax ID for every organization, which we have verified to be a 501c3. And certain non-501c3 governmental/educational institutions (such as state universities) also qualify. As the donation receipts are received we verify that they also meet the QCD requirements. Everything seemed fine, until code Y came along. The Morningstar article describes better than I can the various issues code Y triggers. Our plan is to ignore code Y unless there is additional clarification. As we did last year we will document everything and hand our tax preparer our QCD files and let them handle it. It is disappointing that more than a year after code Y was announced that “tax experts” are not able to provide clear and objective guidance but can only offer opinions.
Post: New in 2025 – Code Y on 1099-R box 7 for QCD’s
Link to comment from August 23, 2026
This is very bad news. ID.me is a private company that collects and stores biometric data. We will not provide our biometric data to this privately owned company. We use LogIn.gov for access to our online Social Security accounts. I did once start the process of creating an ID.me but when I realized what was required I quickly exited. I am not going to go all political here but let’s just say that it is best to keep a low online profile: no social media accounts, no online storage, stay anonymous as much as possible, log-in only when required, … and a lot of other measures. Giving up our biometric identities to access our I-bonds is beyond the pale. We will redeem all of our I-bonds rather than create ID.me log-in’s. But, we bought $20,000 in I-bonds earlier this year and will not be able to redeem them before the October 28, 2026 deadline. And there is also the problem of access to the 1099 at the end of the year. We could do nothing. We have not redeemed anything this year so there would not be any 1099 for 2026. Perhaps wait until the last I-bond is redeemable and hope there will be some method available to close everything out then. But do we continue to count our I-bonds in our stable value assets if we cannot access them?
Post: TreasuryDirect changing login procedure to mandate ID.me later in 2026
Link to comment from August 16, 2026
I worked as an embedded software engineer in both the industrial automation and automotive sectors. I never had the opportunity to use the neural networks that current AI is based on but did implement some clever self-adjusting “learning” algorithms over the years. I just finished watching the 12-lecture “Understanding Artificial Intelligence” by professor of philosophy Dr. Patrick Grim on Great Courses streaming, which I highly recommend. I am more concerned about the national debt than Artificial Intelligence (which I think should more correctly be called Simulated Intelligence). The national debt issue is a political issue and in the current anti-tax environment cannot be solved. Only when honest and forthright politicians are voted into power in both legislative and executive branches will this issue be addressed. Artificial Intelligence does now and will increasingly disrupt our relationship with work. What is new this time is that it is not just those who perform physical labor but also those who do intellectual labor are affected. The AI promise: The decoupling of economic productivity from the number of hours of human labor input. This started with the industrial revolution, mass production, and accelerated with electronic control systems (automation) used in modern manufacturing. The combination of advanced sensor technology with AI logic will expand the impact to all areas of human labor, from research scientists to agricultural field workers. I am not concerned about the doomsayers talk about an “AI singularity” where the AI becomes smarter than us biological intellects and decides we are not needed. The affect of AI that that is concerning is how our society will respond when all of our material needs can be satisfied with much, much less labor than is currently used. Will our political and economic systems be able to adjust so that everyone wins?
Post: Is AI going to affect our investments
Link to comment from February 25, 2026
When a CD matured 3 months ago we moved the proceeds to a local credit union and locked in a 19 month CD “special” at 4.30%. Current best rate at that CU is 13 months at 4.10%. Also holding money market fund in IRA at 3.52%. Will know in a few weeks what we earned on fixed income in 2025 when all the 1099’s roll in. Not sure how to estimate what our earnings will be in 2026 since who knows what the interest rates will do? Also not sure what we will do if interest rates drop to below inflation rate.
Post: Should I Lock in CD Rates Now or Stay in Money Market?
Link to comment from January 13, 2026
Thank you Randy for your suggestion for how to handle unplanned expenses. So to fund an unplanned expense of X amount: 1) Sell X amount of a growth fund in the Roth account and transfer cash out of the Roth for the expense. 2) And simultaneously sell X amount of a stable value fund in the traditional IRA account and buy X amount of the growth fund. This does make sense. A bit more complicated and perhaps some additional trading costs, but it would eliminate the “drag” of holding stable value in the Roth account. Eventually the stable value would need to be replenished during rebalancing but presumably that would be done when the market has recovered. But that is another topic: “market timing when rebalancing”.
Post: Taking stock
Link to comment from January 7, 2026
Last year we completed increasing our stable value investments from 9.5% in 2022 to 21.5% now. And, while most of our Roth account investments are growth funds, a portion is held in an ultra-short term (i.e. stable value) bond fund to have the flexibility to be able to access as needed on a tax-free and low market risk basis. We can tap the stable value in Roth for unplanned expenses without being pushed into a higher tax bracket or forced to sell equities in a market downturn. More stable value (a money market fund) in my traditional IRA account is now being used for my RMD, transferring fund shares into our brokerage account with a portion eventually being cashed.
Post: Taking stock
Link to comment from January 6, 2026
Here is a tip for finding lost stuff: Use a flashlight. Yes more light obviously helps, but the real benefit is that it focuses your attention and perception to only the area that is being illuminated. And sweeping the flashlight around in a methodical pattern assures that every area is being fully examined.
Post: Help Me Out People—Is This Just Me?
Link to comment from January 6, 2026
Not my decision, “retired” at 71 when the company decided it was time. The company was and still is struggling and I ended up in a 30% staff cut. My plan was always to work full time and delay Social Security benefits until 70, which I did, and then do a phased retirement on a part time or contract basis. I was financially prepared for retirement with or without any additional earned income. And being fired instead of voluntarily retiring did result in a few months of severance pay and a nice bonus. As for the non-financial aspects of retirement, I am now fully busy working on stuff I wanted to do but never got around to doing while working on company stuff.
Post: What Age Did You Retire—and What Made You Decide It Was Time?
Link to comment from December 28, 2025
I have had similar thoughts about concentration risk for most of this year. I ended up trimming some of my high-flyers and increasing stable-value investments in the form of money market and ultra-short term bond funds, all within IRAs to avoid tax consequences. I did look at international investments, which are having a very good year, but decided they did not offer enough trade-off between potentially reducing risk and sufficient long-term performance when compared with domestic U.S. investments.
Post: Becoming A “Bad Investor”
Link to comment from December 17, 2025
Assuming married filing jointly, both at least 65, and all income is “ordinary”: Maximum gross income 2025 for 12% bracket: $143,650 Maximum gross income 2026 for 12% bracket: $148,300 (increase of $4,650) But Social Security benefit income and other non-ordinary income will affect these amounts.
Post: Calculating the Maximum Income While Staying in the 12% Tax Bracket
Link to comment from December 7, 2025