Hello wise folks.
We're getting a medium size refund (just over $1k). I'm debating getting cash or getting part of it in i-bonds.
Background: We have some tips mutual funds, short term bond mutal funds and total bond mutual funds... so I'm wondering if I bonds have some advantage over our current bond allocation.
But this would be pretty much insignificant in our asset allocation.
Other thoughts, please bear with me.
- We have pre-college age kids. I read that you can get a tax break if you redeem the bonds the same year you have qualified educational expenses. One kid is 5.5 years out from starting college, the other is 7.5 years out.
- We have a semi-scary family history with bonds...My MIL has been buying bonds in small denominations, through the years. She would lose the paper copies, she doesn't/didn't trust treasury direct, and she didn't keep good records of what she had. Now she has dementia and my husband is her guardian. She doesn't trust him, or anyone. She hides her bonds, then rediscovers them, then loses/hides them again. She showed the stack of bonds to my SIL who copied the numbers. They've subsequently disappeared again. DH contacted the treasury and got an overlapping list (based on SS#'s)... but we're still unraveling what bonds she has. It's been quite a project. So individual bonds carry a bit of emotional baggage for my husband....
- Thinking of getting small bonds ($100?) in the kids names - so they can see compounding, etc... and they could use the money for mad money when they go to college. Not sure if that would qualify for the tax advantage since we'll be paying for their college. Do they need to be in our name to get the tax break?
Current interest rate is 1.38% plus inflation. Not too great.
But - I read here on E-R that folks like the i-bonds and get them at tax time. I'm trying to decide whether it's worth it.
Give me your wisdom and opinions. Thanks.
We're getting a medium size refund (just over $1k). I'm debating getting cash or getting part of it in i-bonds.
Background: We have some tips mutual funds, short term bond mutal funds and total bond mutual funds... so I'm wondering if I bonds have some advantage over our current bond allocation.
But this would be pretty much insignificant in our asset allocation.
Other thoughts, please bear with me.
- We have pre-college age kids. I read that you can get a tax break if you redeem the bonds the same year you have qualified educational expenses. One kid is 5.5 years out from starting college, the other is 7.5 years out.
- We have a semi-scary family history with bonds...My MIL has been buying bonds in small denominations, through the years. She would lose the paper copies, she doesn't/didn't trust treasury direct, and she didn't keep good records of what she had. Now she has dementia and my husband is her guardian. She doesn't trust him, or anyone. She hides her bonds, then rediscovers them, then loses/hides them again. She showed the stack of bonds to my SIL who copied the numbers. They've subsequently disappeared again. DH contacted the treasury and got an overlapping list (based on SS#'s)... but we're still unraveling what bonds she has. It's been quite a project. So individual bonds carry a bit of emotional baggage for my husband....
- Thinking of getting small bonds ($100?) in the kids names - so they can see compounding, etc... and they could use the money for mad money when they go to college. Not sure if that would qualify for the tax advantage since we'll be paying for their college. Do they need to be in our name to get the tax break?
Current interest rate is 1.38% plus inflation. Not too great.
But - I read here on E-R that folks like the i-bonds and get them at tax time. I'm trying to decide whether it's worth it.
Give me your wisdom and opinions. Thanks.
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