The Rob Berger Show RBS 221: What's the Best Option for Cash: Money Market Funds or T-Bill ETFs? (FQF)
Jul 19, 2025
Delve into the debate on whether to stash cash in money market funds or T-bill ETFs, weighing liquidity against yield. Discover the pros and cons of robo-advisors' tax-loss harvesting features. Learn about the Retirement Spending Smile and its phases, essential for future budgeting. Examine what return rate assumptions are best for retirement planning tools. Finally, unpack the nuances of combining various IRA account types for optimal retirement strategy.
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Cash Liquidity Strategy
- Keep enough cash in a money market fund for immediate liquidity needs.
- Use T-bill ETFs for longer-term holding of cash to potentially earn a slightly higher yield.
Tax Loss Harvesting Tips
- Avoid using robo-advisors solely for tax loss harvesting to reduce IRMA surcharges.
- Harvest tax losses manually if you want a $3,000 deduction to lower adjusted gross income.
Retirement Spending Smile
- Retirement spending tends to follow a 'smile' pattern: high early, lower in middle years, then rising from healthcare costs late.
- Modeling changing spending levels in retirement better reflects reality than assuming constant spending.