Thanks for all the comments. I'll address them all here.
As far as losing money, they are only paying 4 % and I'm pretty sure I can get at least that much in CDs. One of the reasons I wanted to start cashing them in rather than waiting is so I can start laddering CDs. I figured I could take about 10 bonds each year for 6 years and buy a 5 year CD with each of them. Or 12 for 5 years or
. That way after 5 years about 20% of the CDs would be available for use or reinvestment. Perhaps I could keep one year in short term funds. Like EngineeringMyFinances, these bonds are my "in case of bad times" mad money. I really don't want to have over $100,000 to pay taxes on all at once.
As far as modeling various scenarios, there are too many unknowns. The CD rates could nosedive, making it a better deal to hold them until the end, the rates could jump up making it a better deal to dump them all now, maybe. Also with the dems likely to be in office soon, taxes are sure to go up and since a lot of my income is capital gains, I'll be in a higher bracket later down the road, since I have a hunch they will take aim at the cap gains and dividend cuts of recent years.
We have no kids and with both of us in our 60s, both with degrees, so education probably isn't an option for spending even though we did do an immersion Spanish class in Costa Rica.
EngineeringMyFinances brings up a good point. I hadn't thought of using that money to offset or delay SS. I can't do that now I've started collecting, but it would work for DW. Thanks for the tip.
Basically we don't need the money for income or spending. Our basic needs, housing, utilities, etc. except for food are covered by my SS and her pension. The additional income produced by our investments pays for entertainment, travel, toys etc. The biggest unmanageable expense is health insurance but that's about to get whacked significantly with DWs pension comes insurance coverage. We've been on Cobra followed by an extension of Cobra under DWs employer (state of GA).
I guess it doesn't matter what I do, I just hate the thought of giving uncle sam any more money than I have to. If I thought it was being spent wisely, it wouldn't be such a big deal.