Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 01-29-2013, 09:59 AM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,446
Yes, food and energy prices are contained in the CPI-U use to calculate IBond rates.

We had deflation in 2008/2009, and I think I remember my rate being 0% for a 6 month period. Considering that my retirement portfolio had just taken a 27% tumble, it didn't seem such a bad thing at the time .
__________________

__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-29-2013, 12:01 PM   #22
Recycles dryer sheets
BreathFree's Avatar
 
Join Date: Nov 2012
Location: Navarre
Posts: 101
Quote:
Originally Posted by Mulligan View Post
Let's make a big assumption that this cycle ends at 0%. Then in Mid April after March CPI is announced you have a 2 week window to snag the current rate of 1.76% (I think it's that give or take a hair) for 6 months before having to assume the 0% rate.
Is this two week window you refer to simply the delay in the change of the I-bond current rate after the CPI is announced. Is there always a two week delay?

The treasury website currently shows 1.76%. If I purchased an I-bond today will I get 1.76%. Where does the 0% rate come from? Are you saying that it may drop to 0% for the second half of the year? I am new to I-bonds but am looking to purchase soon.
__________________

__________________
BreathFree is offline   Reply With Quote
Old 01-29-2013, 12:21 PM   #23
Thinks s/he gets paid by the post
 
Join Date: Jul 2012
Location: Mississippi
Posts: 1,878
Quote:
Originally Posted by BreathFree View Post

The treasury website currently shows 1.76%. If I purchased an I-bond today will I get 1.76%. Where does the 0% rate come from? Are you saying that it may drop to 0% for the second half of the year? I am new to I-bonds but am looking to purchase soon.
Yes, the inflation component for I-Bonds is reset every 6 months, depending on what the CPI-U is. It's possible for it to be zero for that 6 month period. Current interest rate component 0% for the life of the bond.

This site is good for savings bond info, in addition to the gov site

Series I US Savings Bonds: US Savings Bonds
__________________
rbmrtn is online now   Reply With Quote
Old 01-29-2013, 12:30 PM   #24
Recycles dryer sheets
BreathFree's Avatar
 
Join Date: Nov 2012
Location: Navarre
Posts: 101
OK. Got it. Thanks for the explanation
__________________
BreathFree is offline   Reply With Quote
Old 01-29-2013, 02:06 PM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,369
Quote:
Originally Posted by BreathFree
OK. Got it. Thanks for the explanation
The 2 week window, is created by the fact that march's CPI is announced during the middle of April. You can then compare march CPI to the start of the 6 month cycle to determine the CPI rate. Boglehead and Fallwallet forums math nerds will immediately post the next cycle rate, so you will know if you want to buy before to get current rate or wait a couple weeks and get the new rate. I don't think the government officially announces until May 1, when they officially decide the fixed rate. All in all, not probably a big deal. Even if you buy now and next 6 months are zero, you still in effect would get about .9% for a year which isn't any worse than a 1 year CD. I will wait just for the fun of it (if it is zero, or less) to deposit my 10k after to see if they attach a tiny fixed rate component to the bond.
__________________
Mulligan is offline   Reply With Quote
Old 01-29-2013, 02:13 PM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,369
I don't think anyone responded to OP's question on whether to convert or not. It's a personal decision. I wanted mine all together so I converted. Not a big deal. You will have to go under a different tab to find your converted holdings as they are not lumped in with the bonds purchased online. In fact they didn't even give me the courtesy of an email telling me the process was complete, I just "found them" in a couple of weeks after mailing them. I don't really have a secure place for them either, so I mailed them in.
If you aren't planning on buying many and have a secure spot for them, it may not be worth it to convert. You can immediately cash these bonds at a bank, I believe, if you have them in paper form.
__________________
Mulligan is offline   Reply With Quote
Old 01-30-2013, 06:32 AM   #27
Recycles dryer sheets
 
Join Date: Sep 2012
Posts: 66
I converted my paper bonds to electronic bonds years ago, and really like the fact that I don't have to worry about paper bonds any more. I also like the fact that you can cash them in with a couple of clicks, and the funds will be in your bank account within a couple of days.

The Treasury Driect site could be a little better, like listing all your assets on one page, instead of having to go to your converted bonds account page, but I'm sure they will make enhancements.

My recommendation is "Just do it"
__________________

__________________
marc515 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 08:26 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.