January 2025 Financial Asset Roundup

Here are my current financial assets as of the market close on January 10th, 2025:

Asset	Dec 2024	Jan 2025	Change
Checking	3,459	2,191	-1,268
Money Market	81,243	82,041	798
Savings Bonds	245,698	246,386	688
Treasurys	100,000	110,000	10,000
CDs	52,371	52,557	186
Brokerage	553,079	501,867	-51,212
401k	475,046	461,366	-13,680
Roth IRA	328,000	315,382	-12,618
IRA	1,598,480	1,542,484	-55,996
529 Savings	170,368	167,353	-3,015
Total Assets	$3,607,744	$3,481,627	-$126,117
			-3.50 %

The S&P 500 has pulled back in the new year, falling 3.44% (-0.93% YTD) since the last update:

(chart courtesy of nasdaq.com)

Unfortunately, the devastating California wildfires are dominating the current news cycle. The loss of life and property damage has been terribly high and is getting worse every day. My thoughts are with everyone there and I hope the fires are brought under control soon so the long recovery can begin.

On the jobs front, the unemployment rate for December fell to 4.1%, with a blowout number of 256,000 new jobs created. That was not good news for the stock market as the resilient economy could lead to fewer interest rate cuts in 2025. It's also unclear what impact the proposed tariffs, trade wars, isolationism, mass deportations, debt-financed tax cuts, meddling with the Federal Reserve, etc. proposed by incoming Trump administration will have on inflation, interest rates, and the economy. Unfortunately, the economy is strong enough right now that things are more likely to get worse than get better. Also, oil prices have risen to the $78 level (from $69) with that $78 price reflected in a local unleaded regular gasoline price of $2.79 and a heating oil price of $3.10 at my last fill-up.

On the financial front, my assets have dropped a bit since the last update. 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 (4.615%) matured and were rolled into new ones at 4.335%. I also started rolling 4 week T-Bills (4.339%) to try to get a bit more tax-equivalent yield on short-term cash than money market funds are currently offering.

As for the non-financial, we officially put the holidays behind us by taking down our Christmas decorations a few days ago and trying to start fresh with the new year. For better or worse, extended family drama and mistakes by my S-Corp payroll and 401k providers are definitely motivating me to put 2024 behind me. I'm also still trying to wrap my head around a young relative's foolish financial choices and know at some point their never-ending spending spree on new cars, vacations, and gadgets will end badly. Not my circus, not my monkeys, right?

December 2024 Financial Asset Roundup

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

Asset	Nov 2024	Dec 2024	Change
Checking	2,079	3,459	1,380
Money Market	81,518	81,243	-275
Savings Bonds	245,007	245,698	691
Treasurys	100,000	100,000	0
CDs	52,191	52,371	180
Brokerage	574,081	553,079	-21,002
401k	466,238	475,046	8,808
Roth IRA	324,030	328,000	3,970
IRA	1,580,033	1,598,480	18,447
529 Savings	168,541	170,368	1,827
Total Assets	$3,593,718	$3,607,744	$14,026
			0.39 %

The S&P 500 continued to touch all-time highs, breaking the 6,000 barrier and rising 0.85% (+26.52% YTD) since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for November rose slightly to 4.2%, with a surge of 227,000 new jobs created. Oil prices have been relatively flat at the $69 level (from $68) with that $69 price reflected in a local unleaded regular gasoline price of $2.83 and a heating oil price of $2.90 at my last fill-up.

On the financial front, my assets have again hit an all-time high, surpassing the previous high from November 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 (5.103%) matured and were rolled into new ones at 4.511%. I also had 12 month T-Bills (5.214%) mature and used those funds to add another rung to my fixed income ladder with 5 Year T-Notes (4.197%). It's also noteworthy that my brokerage account balance dropped a bit after Oracle Corporation (ORCL) had a disappointing earnings release this week.

I'm also getting a bit stressed that Christmas is only a couple of weeks away and I still have so much to do. Let's just say that things are getting a bit stressful between medical appointments, things happening around the house, getting ready for the holidays and wrapping up EOY tasks for my business. I'll be glad when everything is done and life can get back to normalish.

November 2024 Financial Asset Roundup

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

Asset	Oct 2024	Nov 2024	Change
Checking	2,871	2,079	-792
Money Market	78,536	81,518	2,982
Savings Bonds	244,314	245,007	693
Treasurys	100,000	100,000	0
CDs	52,005	52,191	186
Brokerage	538,638	574,081	35,443
401k	442,853	466,238	23,385
Roth IRA	321,722	324,030	2,308
IRA	1,552,757	1,580,033	27,276
529 Savings	169,363	168,541	-822
Total Assets	$3,503,059	$3,593,718	$90,659
			2.59 %

The S&P 500 continued a strong run, rising 3.53% (+25.45% YTD) as it hit all-time highs since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for October remained at 4.1%, with only 12,000 new jobs created as hurricanes and labor strikes provided a temporary drag on the job market. Oil prices fell to the $68 level (from $75) with that $68 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 October 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 (5.212%) matured and were rolled into new ones at 4.553%. There was also an unusual move for me, where I bought some 5 year TIPS in my IRA at the Treasury auction last month with a real yield to maturity of 1.670%.

And to wrap up, I am soooo glad that the 2024 presidential election is over. I certainly won't miss the attack ads and hope the worst of the political rhetoric is behind us. I wish the new President-elect the best of luck, but I'm certainly concerned that the economic proposals he ran on (tariffs, trade wars, protectionism) will impact the great run the economy has been on for the past two years (fingers crossed).

September 2024 CPI-U numbers released: Neutral on I Bonds Purchase

The U.S. Bureau of Labor Statistics released the September 2024 Consumer Price Index (CPI-U) inflation data last week, which increased by 0.160% over the past month.

As always, now is one of the best times to consider purchasing I Bonds. The reason for this is that we now know what the rate of return for October 2024 I Bonds will be for both the first and second six month periods, which is important since I Bonds must be held for 12 months before they can be redeemed.

Using the CPI-U data from March 2024 (312.332) and September 2024 (315.301) (courtesy of inflationdata.com), we can calculate the variable rate for the second 6 month period for October 2024 issue I Bonds.

That means these bonds would earn the current rate of 4.28% (using 1.3% fixed & 1.48% variable) for the first 6 months and 3.21% (combined 1.3% fixed & 0.95% variable) for the second 6 months. In the current interest rate environment, an October I Bond purchase is a reasonable choice when compared to something like the 52 Week T-Bills @ 3.946% APY issued on 10/3/2024.

In my opinion, October 2024 I Bonds are a reasonable choice, particularly for the 1.3% fixed rate if you plan to hold them long term. Based on the spread between I Bonds and TIPS, David Enna of tipswatch.com projects that the new fixed rate will fall slightly to 1.20%, which would make a purchase before the end of the month even more attractive. I've already maxed out my 2024 I Bond limit, so I'll evaluate them again in April 2025 once the March 2025 CPI-U numbers are released.

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.