Can one buy such 30 year treasury to supplement retirement plans?

sg_investor

Senior Member
Joined
Sep 3, 2016
Messages
1,037
Reaction score
2
By looking at the chart they seem that in Dec. 2013 there were still rates nearly 4%. How do I interpret that number? It seems slightly better than endowment plans we get for 3+% yield now. Endowment plan locks up my cash for the time scale of 30 years too.

How do we buy that with IB account?


treasury_30.jpg


<a href="https://ibb.co/bLsGb5"><img src="https://preview.ibb.co/dOLf3k/treasury_30.jpg" alt="treasury_30" border="0"></a><br /><a target='_blank' href='https://imgbb.com/'>upload pictures to website</a><br />
 

BBCWatcher

Arch-Supremacy Member
Joined
Jun 15, 2010
Messages
20,119
Reaction score
3,014
By looking at the chart they seem that in Dec. 2013 there were still rates nearly 4%. How do I interpret that number?
Exactly as you've described it. Nearly 4 years ago you could buy a U.S. federal government 30 year bond that was yielding about 4% (nominal U.S. dollars, and not counting taxes).

I don't hold many bonds, but I've got a couple small, long-term U.S. government bonds purchased at original issue that are yielding above 5%. That's nice and all, but I didn't purchase them yesterday.

How do we buy that with IB account?
You don't. The U.S. 30 year bond, issued today, is yielding about 2.8% (still nominal U.S. dollars, not counting taxes). If you buy a 30 year bond issued in 2013, i.e. with about 26 years until maturity, then it'll yield something a bit less than 2.8%.

You can buy and sell U.S. T-Bills and Treasuries via Interactive Brokers, if you wish. But you won't find anybody rational who is willing to sell you a U.S. 30 year at a 4% effective yield (nominal, pre-tax). Not today.

How much did you pay for a plate of bee hoon in 1987? :D
 
Last edited:

unhinged_loon

Senior Member
Joined
Oct 25, 2009
Messages
811
Reaction score
2
By looking at the chart they seem that in Dec. 2013 there were still rates nearly 4%. How do I interpret that number? It seems slightly better than endowment plans we get for 3+% yield now. Endowment plan locks up my cash for the time scale of 30 years too.

How do we buy that with IB account?


treasury_30.jpg


<a href="https://ibb.co/bLsGb5"><img src="https://preview.ibb.co/dOLf3k/treasury_30.jpg" alt="treasury_30" border="0"></a><br /><a target='_blank' href='https://imgbb.com/'>upload pictures to website</a><br />

Pray for the US economy to boom and overheat so that the Feds will raise rates.
 

sg_investor

Senior Member
Joined
Sep 3, 2016
Messages
1,037
Reaction score
2
Pray for the US economy to boom and overheat so that the Feds will raise rates.

Hope too.

Exactly as you've described it. Nearly 4 years ago you could buy a U.S. federal government 30 year bond that was yielding about 4% (nominal U.S. dollars, and not counting taxes).

I don't hold many bonds, but I've got a couple small, long-term U.S. government bonds purchased at original issue that are yielding above 5%. That's nice and all, but I didn't purchase them yesterday.


You don't. The U.S. 30 year bond, issued today, is yielding about 2.8% (still nominal U.S. dollars, not counting taxes). If you buy a 30 year bond issued in 2013, i.e. with about 26 years until maturity, then it'll yield something a bit less than 2.8%.

You can buy and sell U.S. T-Bills and Treasuries via Interactive Brokers, if you wish. But you won't find anybody rational who is willing to sell you a U.S. 30 year at a 4% effective yield (nominal, pre-tax). Not today.

How much did you pay for a plate of bee hoon in 1987? :D

so i could have bought a Mar 2017 issue at 3.2%. what is the simple click of a mouse at IB coupled with opportunistically reinvestment of the coupon, as compared to the lengthy emdowment process which yield 3% only? are there anything endowment/annuity have over treasury i didnt know of?

i am relatively new to investment and i am a technician in a factory with limited knowledge i study on myself.
 

BBCWatcher

Arch-Supremacy Member
Joined
Jun 15, 2010
Messages
20,119
Reaction score
3,014
so i could have bought a Mar 2017 issue at 3.2%.
Maybe, but (as a reminder) that's a U.S. dollar denominated nominal yield, pre-tax.

Under present tax rules, non-U.S. persons are (generally) not subject to U.S. tax on U.S. Treasuries. They are, generally, U.S. income and U.S. estate tax exempt.

what is the simple click of a mouse at IB coupled with opportunistically reinvestment of the coupon, as compared to the lengthy emdowment process which yield 3% only?
IB explains how to buy and sell bonds here, but there is no automatic coupon reinvestment with directly held U.S. Treasuries. Bond mutual funds can do that, and sometimes ETFs can as well. (Although there may be other differences with those vehicles.)

are there anything endowment/annuity have over treasury i didnt know of?
Possible examples: different currencies, different liquidity characteristics (U.S. Treasuries are highly liquid), different tax treatment, different risk profiles, different costs.... Is Jupiter different from Mars? (Yes.)
 
Last edited:
Important Forum Advisory Note
This forum is moderated by volunteer moderators who will react only to members' feedback on posts. Moderators are not employees or representatives of HWZ. Forum members and moderators are responsible for their own posts.

Please refer to our Community Guidelines and Standards, Terms of Service and Member T&Cs for more information.
Top