Savings Bond Questions.

[DawnCt1]

Back in 1995 my mother removed my father's name from all of her savings bonds (he had died in 1976) and put me as the joint owner. My mother passed away in 1996 and as part of her estate, I paid the "shadow tax". by amending her 1995 tax return. I put all of the serial numbers and series in Bond EZ calculator and I have a list of the ones that are still earning (between 4.5 and 6%) and of course, the ones that have reached their maximum maturity. When I cash them in, I will just have to pay the interest earned between 1995 and 2006. I have delayed cashing them in because I was working full time until this year so I didn't want to add to my tax liability. This year is a good year to cash the non interest earning bonds in because I am no longer employed. Any suggestions of where to put them? I could park the proceeds in a CD for now. I don't want to put the proceeds into an index fund as a lump sum, so I suppose I could dollar cost average but are there any other good bonds at this point that I could consider. CD rates are 4.5% in our area. Any suggestions will be helpful. Its not a huge amount of money. $10K and its not all tax free.

 

[crazyme5kids]

I'm interested in thoughts on this too.

 

[Dan Murphy]

Two primary concerns for this, or any investment for that matter, are; the purpose of the investment (what is it for), and the time frame, both for accumulation and earnings time, as well as length of distribution time.

(not to be taken as investment advice)

 

[DawnCt1]

I'm interested in thoughts on this too.

I know I can sign up for Treasury Direct and there is something called I bonds that is paying more than 6% at least until May. The good thing about bonds and Treasuries is that they are exempt from state and local taxes. There are also EE bonds, which some of mine are, and TIPS which are inflation protected. I just don't want a 30 year committment and it seems like the short term rates are higher. I postponed this and now I have to deal with it. I still have some that haven't matured, in fact a lot that haven't but will every year for a few years going forward.

 

[DawnCt1]

Two primary concerns for this, or any investment for that matter, are; the purpose of the investment (what is it for), and the time frame, both for accumulation and earnings time, as well as length of distribution time.

(not to be taken as investment advice)

I would have to say retirement but it is not money that I would want to put at risk. I know its silly because one shouldn't' ever feel "sentimental" about money, but my mother worked very hard all of her life and I wouldn't want to risk any of it. I would also want tax efficiency.

 

[mtblujeans]

I would throw it into a 401K but we are throwing stuff in there like crazy (so maybe it is a phase that will pass pretty soon)!

Question: Where do you find a Bond EZ calculator? DMIL just passed away and she left the DGC savings bonds. They are now being transferred over to the parents+child for minor children so have not received them yet.

 

[mrsltg]

I would have to say retirement but it is not money that I would want to put at risk. I know its silly because one shouldn't' ever feel "sentimental" about money, but my mother worked very hard all of her life and I wouldn't want to risk any of it. I would also want tax efficiency.

If you are sentimental about the money (which, I completely understand, BTW) I would put it into a high-rate CD. The money is safe, you'll earn decent interest, and you can reconsider when the term is up.

My grandfather is on hospice and his days are limited. He is leaving behind a decent amount of money. Should any of it come my way it will NOT be used for anything such as a bill or a whim. This is money my grandparents worked for all of their lives. I, too, am sentimental about it. Nothing wrong with that!

Erin

 

[DawnCt1]

If you are sentimental about the money (which, I completely understand, BTW) I would put it into a high-rate CD. The money is safe, you'll earn decent interest, and you can reconsider when the term is up.

My grandfather is on hospice and his days are limited. He is leaving behind a decent amount of money. Should any of it come my way it will NOT be used for anything such as a bill or a whim. This is money my grandparents worked for all of their lives. I, too, am sentimental about it. Nothing wrong with that!

Erin

I am glad you understand. I am thinking however, reinvesting in bonds would shield me against Ct. State income tax.

 

[DawnCt1]

I would throw it into a 401K but we are throwing stuff in there like crazy (so maybe it is a phase that will pass pretty soon)!

Question: Where do you find a Bond EZ calculator? DMIL just passed away and she left the DGC savings bonds. They are now being transferred over to the parents+child for minor children so have not received them yet.

google savings bonds, treasury public debt, etc. It works really well. Just putting the bonds in can be tedious. I am not working so the 401K isn't an option right now.

 

[mtblujeans]

google savings bonds, treasury public debt, etc. It works really well. Just putting the bonds in can be tedious. I am not working so the 401K isn't an option right now.

Thank you! Please post what you decide 'cause I would like to hear what works for you!

 

[DawnCt1]

Thank you! Please post what you decide 'cause I would like to hear what works for you!

I have to do some quick research. I was thinking of the I bonds, which have a good rate right now. I was also thinking of the TIPS (treasury, inflation protected securities?) I wish this discussion could continue because I have to make some decisions. Doing nothing is no longer an option.

 

[crazyme5kids]

I think you can defer the federal tax on I bonds until you cash them in. I also think they mature in seventeen years, but you can cash them out anytime you want. There are certain penaties (might be wrong though) depending on how soon you cash them out.