October 2024 Financial Asset Roundup

Here are my current financial assets as of the market close on October 10th, 2024:

Asset	Sep 2024	Oct 2024	Change
Checking	1,848	2,871	1,023
Money Market	78,084	78,536	452
Savings Bonds	243,533	244,314	781
Treasurys	100,000	100,000	0
CDs	51,828	52,005	177
Brokerage	492,227	538,638	46,411
401k	416,376	442,853	26,477
Roth IRA	308,792	321,722	12,930
IRA	1,500,048	1,552,757	52,709
529 Savings	183,165	169,363	-13,802
Total Assets	$3,375,901	$3,503,059	$127,158
			3.77 %

Hurricane Milton has followed Hurricane Helene, causing widespread destruction and loss of life in the Southeast USA. My best to the residents and rescue personnel who are working through this as a long recovery and rebuilding process begins to take shape.

The S&P 500 had another strong month, rising 5.18% (+21.18% YTD) since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for September fell to 4.1%, with a surprisingly strong 254,000 new jobs created. Oil prices rose to the $75 level (from $67) as tensions in the Middle East flared (again), with that $75 price reflected in a local unleaded regular gasoline price of $2.94 at my last fill-up.

On the financial front, my assets have again hit an all-time high, surpassing the previous high from September 2024! I did the usual Fidelity 401k transaction (FSKAX) and Vanguard VTI purchase in my taxable brokerage account. I also took an S Corp distribution and my 13 week T-Bills (5.383%) matured and were rolled into new ones at 4.615%. You can also see from my reduced 529 savings plan balance that I successfully completed a Fidelity 529 to Vanguard Roth IRA rollover for my children, maxing out their 2024 Roth IRA contributions.

Finally, the September 2024 CPI-U numbers came out yesterday, so we now know the full interest rate picture for October 2024 issue I Bonds over the next year. I'm hoping to make a follow-up post with more details next week.

How to Make a Fidelity 529 to Vanguard Roth IRA Rollover

Ever since the SECURE 2.0 Act was signed into law in December 2022, I have been keeping an eye on the provision allowing a tax-free rollover of unused 529 plan funds into a Roth IRA for the 529 plan beneficiary. We're done paying for the education of our children at this point, but ended up over-saving because of their decision to attend public universities that offered generous merit-based scholarships.

Ben Henry-Moreland of Kitces.com has a nice overview of the 529-to-Roth provision here, with these highlights:

• The 529 plan must have been maintained for a period of at least 15 years before the date of the rollover
• The amount of each rollover cannot exceed the aggregate amount of contributions (and earnings attributable thereto) made earlier than the 5-year period before the date of the rollover
• The amount of each rollover also cannot exceed the IRA contribution limit for that year, minus any amounts that the taxpayer contributed directly to the IRA that year
• The amount of each rollover cannot exceed the aggregate amount of contributions (and earnings attributable thereto) made earlier than the 5-year period before the date of the rollover
• The maximum amount of funds that a 529 plan beneficiary can roll into a Roth IRA over their lifetime is $35,000
• Unlike making a normal Roth IRA contribution, where the ability to contribute to a Roth phases out for individuals with higher incomes, there are no income-based phaseouts for a 529-to-Roth rollover

We met all of the above criteria and I checked in with my accountant about potential state tax implications, so I was ready to proceed with the rollover of funds from our Fidelity 529 plans to existing Vanguard Roth IRAs for my children.

This process is initiated with the institution where the 529 plan is held, so I scrolled down to the "To transfer from a Fidelity-managed 529 to an external Roth IRA" section on Fidelity's Making 529 withdrawals and contributions landing page. This states that the procedure to transfer a Fidelity 529 plan to an external Roth IRA is initiated by using this withdrawal form pdf and having a physical check mailed directly to Vanguard.

For the first page of the form, I entered my name, SSN, and phone number for line 1 and the child's name and SSN for line 2. For line 3, I entered the Fidelity 529 plan account number and checked the boxes including "529-to-Roth IRA transfer" and "Leave account open for future possible contributions":

For the second page of the form, I checked the "ONLY the following amount(s) from the following portfolio(s)" box and entered the 529 plan portfolio name and the contribution amount ($7,000 max for 2024) for line 4:

For the third page of the form, I checked the "Current Year Contribution" and "External Roth IRA" boxes. I had already contacted Vanguard support for the proper mailing address to have the check sent to, so I used that address and the Vanguard Roth IRA account number to complete line 5 on this page:

Finally, to complete the form, on the fifth page I entered my name and signed the form for line 6:

At this point it was time for my completed form to be sent to Fidelity. The form gives you a P.O. Box in Cincinnati, OH for mailing via USPS, but instead I uploaded my completed pdf to fidelity.com to the attention of "Account services" via their Secure Message Center (login required) to expedite the process.

Once the Fidelity document upload was complete, it took 9 days for the money to appear in the Vanguard Roth IRAs:

• Day 1: File upload to fidelity.com
• Day 2: Received confirmation message of receipt of documents from Fidelity
• Day 3: Received confirmation message from Fidelity that the check has been printed and will be mailed shortly
• Day 9: Funds appeared in Vanguard Roth IRA

September 2024 Financial Asset Roundup

Here are my current financial assets as of the market close on September 12th, 2024:

Asset	Aug 2024	Sep 2024	Change
Checking	1,399	1,848	449
Money Market	74,346	78,084	3,738
Savings Bonds	242,768	243,533	765
Treasurys	100,000	100,000	0
CDs	51,495	51,828	333
Brokerage	441,526	492,227	50,701
401k	400,822	416,376	15,554
Roth IRA	300,729	308,792	8,063
IRA	1,466,791	1,500,048	33,257
529 Savings	180,297	183,165	2,868
Total Assets	$3,260,173	$3,375,901	$115,728
			3.55 %

The S&P 500 had a strong month, rising 2.83% (+15.21% YTD) since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for August fell to 4.2%. A solid 142,000 new jobs were added, showing a stronger number after July's numbers were revised downward. Oil prices fell to the $67 level (from $79) from a weakening demand outlook, with that $67 price reflected in a local unleaded regular gasoline price of $2.99 at my last fill-up.

On the financial front, my assets have again hit an all-time high, surpassing the previous high from July 2024! I did the usual Fidelity 401k transaction (FSKAX) and Vanguard VTI purchase in my taxable brokerage account. I also took an S Corp distribution and my 13 week T-Bills (5.395%) matured and were rolled into new ones at 5.103%. I also opened some Navy Federal add-on CDs as an interest rate hedge and started the process to rollover excess Fidelity 529 plan money to existing Vanguard Roth IRAs for my children. Once that is completed I should probably dedicate a post to documenting the process since I had to reach out to Fidelity and Vanguard to get the details correct.

Another thing I recently learned was that as of January 2025, you will no longer be able to buy paper Series I savings bonds with your tax refund (hat tip to David Enna of tipswatch.com). After conversations with my CPA over the years I'm sure this wasn't a terribly popular program with most taxpayers, but it looks like I won't be making any more supersized January estimated tax payments to help bulk up my paper I Bond holdings. I should probably consider converting everything to electronic format at treasurydirect.gov to make future redemptions easier, but that might be a project for next year.

As for the non-financial, everyone is back to school and the bills are finally coming due for our family vacation last month. I'm also working to update the old water conditioning equipment we have for our home's well water, which testing has confirmed to contain PFAS "forever chemicals". It's kind of scary that everyone has probably been ingesting this stuff for years without knowing it.

Hedge Against Future Rate Cuts with Add-On CDs

I've been watching the rates on Fidelity brokered CDs drop as signs point to a September rate cut, so I decided it was time to use some add-on CDs as a hedging strategy against future rate cuts:

My thought is to lock in current rates with Navy Federal EasyStart Cds that can be opened with a low minimum purchase ($50) while allowing you to add additional money at any time. Current offerings are 4.75% APY for 12 months, 4.45% APY for 18 months, and 4.15% APY for 24 months, which are pretty competitive with the current Fidelity brokered CDs shown above:

My plan is to have these in my back pocket as a potential destination for future cash in the event CD rates fall back below 4% over the next couple of years. I certainly remember how attractive it was when Penfed offered 3.5% APY CDs in 2018 (Ha!), so it never fails to be prepared. With any luck I won't need them, but it's unclear how low rates could potentially get over the next year or two.

August 2024 Financial Asset Roundup

Here are my current financial assets as of the market close on August 12th, 2024:

Asset	Jul 2024	Aug 2024	Change
Checking	2,491	1,399	-1,092
Money Market	83,661	74,346	-9,315
Savings Bonds	241,966	242,768	802
Treasurys	90,000	100,000	10,000
CDs	51,313	51,495	182
Brokerage	469,988	441,526	-28,462
401k	415,863	400,822	-15,041
Roth IRA	311,207	300,729	-10,478
IRA	1,499,923	1,466,791	-33,132
529 Savings	179,011	180,297	1,286
Total Assets	$3,345,423	$3,260,173	-$85,250
			-2.55 %

The S&P 500 has been volatile of late, falling 5.14% (+12.05% YTD) since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for July rose to 4.3%. A less-than-expected 114,000 new jobs were added, which (along with a Bank of Japan rate hike) helped fuel a stock market decline over fears of an economic slowdown. Similarly, Home Depot reported that people were spending less on home improvement projects, a potential sign of a slowing housing market. Oil prices fell to the $79 level (from $82), with that $79 price reflected in a local unleaded regular gasoline price of $3.19 at my last fill-up.

On the financial front, I did the usual Fidelity 401k transaction (FSKAX) and Vanguard VTI purchase in my taxable brokerage account. I also took an S Corp distribution and my 13 week T-Bills (5.395%) matured and were rolled into new ones at 5.212%. That lower T-Bill yield seems to be consistent across maturities, with even the yield on a 3 year T-Note dropping from the 4.399% I received at the auction last month to 3.810% a week ago.

As for the non-financial, we recently returned from a really enjoyable family vacation in Canada. The weather, scenery, culture, and food were amazing and there were so many other tourists enjoying themselves that it's hard to imagine the economy is slowing down. It was wonderful that our children were able to join us on our trip, they're adults now and I'm not sure how often they'll be able to do so in the years to come.

July 2024 Financial Asset Roundup

Here are my current financial assets as of the market close on July 10th, 2024:

Asset	Jun 2024	Jul 2024	Change
Checking	1,299	2,491	1,192
Money Market	75,979	83,661	7,682
Savings Bonds	241,199	241,966	767
Treasurys	90,000	90,000	0
CDs	51,138	51,313	175
Brokerage	426,353	469,988	43,635
401k	393,495	415,863	22,368
Roth IRA	301,344	311,207	9,863
IRA	1,458,881	1,499,923	41,042
529 Savings	176,539	179,011	2,472
Total Assets	$3,216,227	$3,345,423	$129,196
			4.02 %

The S&P 500 has reached the 5,600 level for the first time, rising 5.09% (+18.12% YTD) since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for June rose to 4.1%. A steady 206,000 new jobs were added, showing a solid, but cooling labor market. Oil prices rose to the $82 level (from $77). The $82 price translates to a local unleaded regular gasoline price of $3.37 at my last fill-up.

On the financial front, my assets have again hit an all-time high, surpassing the previous high from June 2024! I did the usual Fidelity 401k transaction (FSKAX) and Vanguard VTI purchase in my taxable brokerage account. My 13 week T-Bills (5.404%) matured and were rolled into new ones at 5.383%. I also took a distribution from my S Corp and added a 2027 rung to my Treasury/CD ladder with 3 year T-Notes at 4.399% since rate cuts could be coming before the end of the year.

As for the non-financial, we enjoyed a nice 4th of July holiday and are currently dealing with the dog days of summer. The hot & humid weather has made keeping on top of lawn & garden work a bit challenging, but Mrs. Frugalson and I are looking forward to a short getaway in July before we wrangle the entire family for a longer vacation in August.

June 2024 Financial Asset Roundup

Here are my current financial assets as of the market close on June 10th, 2024:

Asset	May 2024	Jun 2024	Change
Checking	2,984	1,299	-1,685
Money Market	66,878	75,979	9,101
Savings Bonds	240,434	241,199	765
Treasurys	90,000	90,000	0
CDs	50,957	51,138	181
Brokerage	406,390	426,353	19,963
401k	381,078	393,495	12,417
Roth IRA	297,224	301,344	4,120
IRA	1,442,706	1,458,881	16,175
529 Savings	175,352	176,539	1,187
Total Assets	$3,154,003	$3,216,227	$62,224
			1.97 %

The S&P 500 has hit another all-time high, rising 2.64% (+12.39% YTD) since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for May rose to 4.0%, the first time it's hit 4% since January 2022. A hotter than expected 272,000 new jobs were added, which may not be great news for interest rate cuts and cooling inflation data. Oil prices fell to the $77 level (from $79) despite OPEC+ extending production cuts. The $77 price translates to a local unleaded regular gasoline price of $3.29 at my last fill-up.

On the financial front, my assets have again hit an all-time high, surpassing the previous high from May 2024! I did the usual Fidelity 401k transaction (FSKAX) and Vanguard VTI purchase in my taxable brokerage account. My 13 week T-Bills (5.384%) matured and were rolled into new ones at 5.395%. I also took a distribution from my S Corp and made my initial Form 5500-EZ filing for my Solo 401k since my asset level at the end of 2023 hit $250k for the first time.

As for the non-financial, the school year is almost over and we're ready to enjoy the nice weather and a summer family vacation. It's interesting that our adult children still want to go on vacation with us, considering how lame I thought my parents were when I was their age. I guess paying for a nice hotel and good restaurants make enough of a difference these days. :)