@Derf, there is this interesting calculation for whether to
(i) buy 1-yr around 4.32% now and roll into another 1-yr on maturity (03/2024)
vs
(ii) buy 2-yr around 3.76% now.
You will be AHEAD with (i) if the rate for 1-yr in 03/2024 is MORE than 2 x 3.76 - 4.32 = 2.84%.
You will be BEHIND with (i) if 1-yr in 03/2024 is LESS than 2.84%.
1-yr would be around 2.84% in 03/2024 if the Fed switches to aggressive cuts.

Thanks for all the replies. As of today I'm thinking of taking 1/2 of required RMD & placing after taxes the remaining amount into another T- note of two years.

+1

Question seems a little unclear @Derf.
- If you mean you have to take some $$ out of the tax shelter (what I think you mean) than depending on tax bracket you might want to invest it in municipal short-term bonds or any number of taxable options like CDs and cash. My understanding is that short term T-Bills are exempt from federal income tax state and local taxes. I-bonds were a very hot item here a year ago. The yield has come down some, but look into those if investing up to $10,000. On the muni-bond side I have in the past used PRIHX. It really stunk up the joint in ‘22. But what didn’t? I’d have no problem steering someone to that if it met their needs.
- If you mean what to do with money still under the tax-deferred umbrella, but which you plan to take as a RMD at some future date, than why not sell off some of your different assets in a way that maintains your current allocation and move the proceeds into a money market fund until you need to actually withdraw it? That’s what I do. And it can be a cumbersome process if maintaining existing allocation is important to you; so some fore-planning recommended. In doing that you can also accomplish at the same time any rebalancing you may need to do by moving funds first from those assets than have done better and grown in proportion.
”With sell in May & go away, I'm thinking fixed or possible split 50-50 equity & fixed.” Here you add a new wrinkle. “Sell in May”’s staunchest advocate left the board a while back. I’ve never put much sock stock in the approach - although it has many advocates. But, yes, if you’re planning on reducing market exposure soon, then taking some of that out as a RMD would make sense.
Your last point raises the question of how aggressive one may want to be positioned at this time. Personally I’m currently skewed a bit to the aggressive side. Just slightly overweight growth compared to fixed income, but not by a whole lot.

a bet on a long-term CD at a high interest rate has it's own risks for the issuing credit union or bank, and that risk is sort of the opposite from what took down Silicon Valley Bank recently. If the Fed's interest rates come down in a year or two that issuer will be stuck paying out at a high rate but itself having to invest for income at a lower rate.

I don't see the situations as symmetric. Banks borrow short and invest long. The risk they voluntarily assume is being locked into more depreciating long term investments (as rates rise) than they have in short term deposits (solvency issue) and experiencing a sizeable net outflow of short term deposits (liquidity issue), notably a bank run.
When Jan buys a CD, the bank invests that money long term. That long term investment will pay enough to service Jan's CD. When Jan's CD matures in five years, the bank will have to come up with the principal. Assuming that interest rates drop in the future, the bank's investment will have appreciated. So the bank will have no problem repaying Jan.
To address larryB's moral hazard comment - it's generally not a long term deposit that creates a problem, since the bank has locked in its own return. There's no mismatch.
Rather, a mismatch comes about when old short term deposit money (getting low interest) leaves and is replaced with new short term deposit money earning higher yields, while the bank is stuck in ongoing investments with lower yield.
FWIW, the mutual savings bank and S&L crisis leading to institutions offering unsustainable deposit rates (including CD rates) was triggered by a unique set of conditions including:
- artificially low deposit rates (until CDs were created in 1978 and the 1982 Garn-St Germain Act created MM deposit accounts);
- disintermediation (people pulling money out of bank accounts to invest directly in Treasuries and newfangled MMFs);
- restrictions on these institutions limiting their investments largely to lower yielding fixed rate mortgages; and
- massive deregulation (allowing the institutions to act recklessly while being insured).
So while there's a superficial resemblance to the situation OJ described - banks paying higher interest rates on new deposits than they're earning on their portfolio - the S&L situation was different, with rising rather than falling rates underlying the mess.
FDIC history, The Savings and Loan Crisis and Its Relationship to Banking
FDIC history, The Mutual Savings Bank Crisis
Federal Reserve history, Garn-St Germain Depository Institutions Act of 1982

If you read the panic-news, Schwab/SCHW 5-yr CDS have about "tripled" to 120s (from 40s), but that (absolute) level still isn't concerning. Credit Suisse CDS near the end were 300s (of course, they also crossed 120s at some point). These are in bps.
Barron's this week has a bearish (but sloppy) story on SCHW. I will watch how it trades on Monday. It is still above +73.5% from 2020 Covid low. https://ybbpersonalfinance.proboards.com/post/990/thread
BEARISH. Schwab (SCHW; cash-sorting – lot of cash is leaving Schwab because its brokerage accounts don’t offer money-market funds as core/settlement account and Schwab Bank rates are paltry; 50% of 2022 revenues were from net interest revenues; the HTM portfolio is carried at par, but if marked-to-market, losses would well exceed the capital base; Schwab points out that the AFS portfolio (already market-to-market) will provide ample liquidity; insiders bought stock to boost confidence; stock may remain weak; a full-page ad on its government SNVXX and retail-prime SWVXX money-market funds is on pg 21; pg 14)
Schwab has issued statements such as that even if 100% of its bank deposits leave, it has enough liquidity to meet that. And its insiders have bought stock.

No directly responding to your question ... Quickly scanning Bloomberg, Deutsche Bank 5 yr CDS is around 205. The article below from Bloomberg on Friday also provides some insight:
By Macarena Muñoz
(Bloomberg) -- Deutsche Bank AG was at the center of
another selloff in financial shares heading into the weekend.
The German bank tumbled 12% on Friday. Credit default-swaps
on Deutsche Bank’s euro, senior debt surged to the highest since
they were introduced in 2019. Other banks with high exposure to
corporate lending also declined, with Commerzbank sliding 9% and
France’s Societe Generale falling 7%.
The collapse of Silicon Valley Bank and the emergency
rescue of Credit Suisse last weekend has rattled investors and
raised questions about the broader stability of the financial
industry at a time of soaring interest rates and high inflation.
The moves follow losses in US banks yesterday, which
tumbled even after US Treasury Secretary Janet Yellen told
lawmakers that regulators would be prepared for further steps to
protect deposits if needed.
“The situation will not be solved by comforting words, but
will only be mitigated with concrete facts and figures,” said
Andreas Lipkow, a strategist at Comdirect Bank. “Patience is
therefore required and the coming quarterly figures from banks
will be highly scrutinized.”
Separately, a tier 2 subordinated bond by Deutsche Bank
surged toward face value on Friday after the lender unexpectedly
announced its decision to redeem the note early.
The notes, which mature in 2028, had slumped to as low as
90 cents in the aftermath of Credit Suisse’s takeover. While
pricing had recovered in recent days, they were still indicated
at about 94, suggesting a large probability of Deutsche Bank
skipping its call option.
The pressure on European banks is coming after regulators
and company executives have sought to reassure traders about the
health of the industry. The government-brokered takeover of
Credit Suisse by UBS is “no indication” of the state of European
banks, Deutsche Bank management board member Fabrizio Campelli
said at a conference yesterday.
He also said that the German lender’s retail deposits are
“very diversified” and hence don’t have the kind of
concentration risk that seems to have persisted at Silicon
Valley Bank.
Deutsche Bank Junior Bond Surges as Firm Defies Call Skip
Fears
The Stoxx 600 Banks Index was 4.4% lower on Friday, making
it the worst-performing sector in Europe.
“The greater danger is the economic outlook and indeed how
both the economy and the financial system will cope with a
recession,” said James Athey, investment director at Abrdn.
“That’s when asset impairment is more likely. But of course the
former can easily precipitate the latter, so it’s a fragile
situation.”
--With assistance from Farah Elbahrawy.
To contact the reporter on this story:
Macarena Muñoz in Madrid at [email protected]
To contact the editors responsible for this story:
Rodrigo Orihuela at [email protected]
Charles Penty, Lynn Thomasson

- Ben Levisohn wrote the “Up & Down Wall Street” lead column this week and certainly sounds bearish. Takes a “not too nice” dig at J. Powell and the latest .25% rate hike.
- Lewis Braham has an interesting article on the importance of fund managers having “skin in the game.” Says several studies have demonstrated that funds with larger manager investment perform better than peers that lack substantial manager investment. Article looks at several specific funds in which the managers have a large stake. Quotes several managers. The SEC requires managers to disclose personal investment amounts in their own funds once a year. Using those figures, Lewis mentions several having anywhere from 50,000-100,000 to over a million dollars invested in their own funds.
- There’s an article discussing big retailers as an investment. Very positive on Costco, Walmart snd others. I’m still too rattled from having watched K-Mart go from a small “Five & Dime” operation to a highly valued retail juggernaut and than eventually to a heap of ashes - all in my lifetime - to want to play with any big retailers.
- There’s some positive commentary on gold in other section(s). Nothing too profound. A bit late to the party. Elsewhere I read that James Stack on Friday reduced the target allocation to financials in his model portfolio. Like the Barron’s gold column - also a bit late. (In fairness - Barron’s has been positive on gold / precious metals for some time - at least back as far as January.) Away from home so haven’t spent the time I should have reading Barron’s. Hope to get caught up in coming week. Are any of the contributors bullish? Please say yes. :)
(Edited / corrected post after some additional reading & re-reading))

Does anyone know where one would find charts of credit default swaps for the banks?
I don't believe for a minute that this banking crisis is contained at all. So why are Schwab CDS blowing out if everything is ok per Chuck, CEO etc...? Why? Irrational fear, no trust/confidence in Yellen, Biden etc?
I can't believe that Deutsche Bank is still operational in its current form. I actually just sold 100% of a fund last week that held their stocks via swaps and had DB as the counterparty (Not that I have any knowledge of what could happen etc, it is just that nope, even if I get a whiff of something might go haywire, in this climate I am Daddy to Basecamp I'm out.)
I couldn't care less if I miss the next 25% upside in the market but sure would be tough if I didn't head for the bunker when I sniffed the 'Nader was coming...
Got Gold? "This is contained" "Safe and Effective" "Ruble to Rubble"...blah blah blah?
What say you, irrational thinking on my part or does everyone have their head in the sand?
Baseball Fan

I’ve seen some great concentrated funds and many terrible ones, which is inevitable as both the opportunities and risks increase with concentration. But I do sometimes wonder at the marketing of these funds. Invariably I hear/see things like “these are our best ideas” and why would you put money into your 30th best stock instead of your first?
But I often wonder if the marketing of some of these funds isn’t terrific spin to make what is really a drawback appear to be a strength. The drawbacks could be in some cases limited research capacity, intellectual laziness, overconfidence and a lack of imagination. In other words, there are literally thousands of stocks to investigate and consider, but this fund manager thinks there are only 20 or 30 worth considering. They may actually not think that but be unwilling to admit they only have two or three analysts and simply don’t have the resources to cover other companies. They also may want to swing for the fences with just a handful of stocks hoping to have a big year to draw your assets and hey it’s not their money but yours at risk.
It is often boutique managers running these concentrated funds. I’ve seen a handful that have also been really good at risk control, and it’s impressive and important to pay attention to. But I think it’s worth noting that there are managers who do have the resources to cover thousands of stocks. Fidelity’s 100th best idea may prove better than the boutique manager’s twentieth or even first. At the least, their hundredth will expose their investors to less unique potentially devastating business risk than a concentrated fund’s.
Most of the funds where I have found concentration has worked best are those that focus on a unique factor--quality. They invest in dominant businesses with strong balance sheets and reliable cash flows. That insulates the portfolio from idiosyncratic business risk. They also don't overpay for these companies. Yacktman and Jensen come to mind. Yet a number of other strategies I've seen backfire in concentrated styles--deep value in distressed companies, aggressive growth in unproven story stocks and small or microcap stocks where the companies only have one line of business.

I like the 'In-Kind" strategy:
8-strategies-for-optimizing-rmds-from-iras

Note, @bee linked article above from Forbes is out of date and incorrectly states when RMD's must be started. SECURE 2.0 Act is now law. Owners of retirement accounts must start taking RMDs at age 73.

@Old_Joe. +.1. Your remarks about the possible hazard of a 5 year CD @5% in the face of declining rates are insightful. And loading up on such counting on the FDIC is an example of a moral hazard.

@Old_Joe… I bought VSCRX through my 401K… no load

These are the key attributes that attracted me to PKSAX. It is the only equity fund that I have found that has the combination of Great owl, consistent strong long term performance (3 year -- 15.9%, 5 year -- 13.9%, 10 year -- 14.9%), what I consider to be reasonable Max drawdowns in both March 2020 of 18.3% and 2022 of 17.7%, and managers who have been in place for a long time (since 2008). It has consistently beaten both its index and its category and does so with a non-traditional approach to sector selection. It has heavy concentrations in both industrials and financials which are quite different from its index. I was able to purchase it through the Thrift Savings plan which is the government's retirement program. I wonder if it might also be available in some other 401k programs. You are right its unfortunately not available at Schwab and Fidelity. Lewis is correct in that it is fairly concentrated, but it has managed that risk to date quite well. I would be very interested if anyone has identified any funds with similar attributes. I think they are rare...

I bought GS 2 days ago and SCHW today. Hard to pull the trigger but that’s when you need to do it

+1.

Indeed. Added to a regional bank CEF (BTO) and then to PRU, and C.

The fund, formerly known as the Phoenix Small-Mid Cap Fund, is closed.
https://www.sec.gov/Archives/edgar/data/34273/000114420418029523/tv494384_497.htm

Our Social Security benefit is 55k per year. Home is paid off and no debt.
We live pretty frugally - pretty much homebodies (boring you could say).
I have just started to calculate how much we will spend including Medi-Care, taxes etc.
We have no equities - all in CD’s and Money Market. I don’t have the stomach for the stock market.
I did come across a 5%, 5 year CD with this credit union. It seems to be well established and the early withdrawal penalty is better than most. It’s supposed insured by the government. I would appreciate your opinion on it. Most other institutions are in the 4.5 range.
https://allincu.com/
All In Credit Union - 5.00% APY
Term (months): 60
Minimum deposit: $1,000
Early-withdrawal penalty: 3 months of interest
Membership: Anyone can join All In by signing up for a free membership in the Fort Rucker/Wiregrass Chapter of the Association of United States Army, keeping at least $5 in a savings account, and paying a one-time fee of $1.
I’ll look into CD and Treasury ladders as I don’t understand the advantages over regular CD’s but it would seem those exempt from federal taxes would/could make a big difference.
Thanks for all the feedback!

@sfnative - I give the fund credit for recovering the loss in 2018 ergo my 2 yr comment

MikeW mentioned this fund in another thread. I was going to ask for your opinions on this one, but when I tried entering a "test order" at Schwab it shows open to existing buyers only. Anyway, below is some info from Schwab- it looks to be a pretty good fund.

With respect to directly- (bank-) sold CDs, Ken Tumin at depositaccounts.com has a cautionary note:

Some banks and credit unions have language in their CD disclosures that allows them to refuse an early withdrawal request. Although CD early withdrawal refusal by a bank or credit union is rare, it is possible. Review the CD disclosure for this type of wording.

https://www.depositaccounts.com/blog/2019-study-cd-early-withdrawal-penalties-changed.html
He reports finding typical early withdrawal penalties averaging around 1 year's interest on a 5 year CD. Tolerable I suppose if you hold the CD for at least half way. The piece was written in 2019; I doubt penalties have gone down since then.
Broker-sold CDs can be harder to get out of. This is usually done by selling them on the secondary market. The CDs are thinly traded and one risks losing a lot by selling early.
Either way, with bank failures more than a theoretical concern now, you should probably check into the financials of the bank you're thinking of using. While a CD and its accrued interest is insured, should the bank fail, your rate going forward might be reduced. This isn't a concern for short term CDs. However, you're looking to lock in a rate for many years, and that could be stymied by a bank failing.
https://publicintegrity.org/inequality-poverty-opportunity/when-banks-fail-so-do-those-promised-cd-rates/
Buying a CD (for some of your money) is not a bad idea, you just need to exercise care.
---
I think you (OP) meant that if interest rates rise and you need cash, selling a bond could result in a significant loss. Just look at what happened at Silicon Valley Bank.