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08-30-2014, 01:38 PM
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#1
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gone traveling
Join Date: Oct 2011
Posts: 156
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IBonds
What do folks think of these? With higher inflation probably in the future good place to park cash? Has anyone transferred these to their brokerage account?
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08-30-2014, 01:51 PM
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#2
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Thinks s/he gets paid by the post
Join Date: May 2008
Location: Cooksburg,PA
Posts: 1,874
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Ibonds have been frequently mentioned on the forum. This thread may be helpful.
http://www.early-retirement.org/foru...buy-21872.html
__________________
Free to canoe
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08-30-2014, 01:53 PM
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#3
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gone traveling
Join Date: Oct 2011
Posts: 156
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Quote:
Originally Posted by Free To Canoe
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Last post was 2006 a different world. Looking for more current info.
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08-30-2014, 02:54 PM
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#4
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Dryer sheet wannabe
Join Date: Jan 2014
Posts: 11
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I like I Bonds and use them as part of my fixed income portfolio, my wife and I buy our limit of $10k each every year. I bonds are purchased and held through Treasury Direct, they cannot be transferred to an outside brokerage.
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08-30-2014, 03:57 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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I keep them as part of my cash reserves. Since CD rates suck these days I may be adding to my I bonds.
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"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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08-30-2014, 04:58 PM
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#6
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Thinks s/he gets paid by the post
Join Date: May 2008
Location: Cooksburg,PA
Posts: 1,874
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Quote:
Originally Posted by Moneygrubber
Last post was 2006 a different world. Looking for more current info.
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It is a world that is more friendly to Ibonds which you can tell from the historical perspective.
To answer your question, I like em.
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Free to canoe
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08-30-2014, 05:01 PM
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#7
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gone traveling
Join Date: Oct 2011
Posts: 156
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Can you take the divvys on these monthly or do you have to redeem the whole wad?
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08-30-2014, 05:14 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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I bonds are an all or nothing proposition when it comes to redemptions. So make sure you buy in bite size pieces (that might be 10k or considerably less). On the plus side, the interest is not taxable until you redeem the bond.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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08-30-2014, 05:15 PM
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#9
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gone traveling
Join Date: Oct 2011
Posts: 156
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Super, thx
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08-30-2014, 05:44 PM
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#11
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Recycles dryer sheets
Join Date: Jan 2014
Location: San Jose
Posts: 80
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FIREd is correct about partial redemptions of electronic i-bonds.
From the Treasury Direct Redeeming (Cashing in) I Bonds web page:
Quote:
How much can I redeem at one time?
Electronic bonds in your TreasuryDirect account
No limit. However, each redemption must be in a minimum amount of $25 redemption value, with additional one-cent increments above that amount, in any one transaction. Redemptions will be comprised of principal and proportionate interest.
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__________________
"Always do right. This will gratify some people, and astonish the rest." --Mark Twain
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08-30-2014, 10:03 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Posts: 1,934
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I'm considering buying I-Bonds also. Never owned any before.
Any idea whether tax deferred I-Bond income affects ACA subsidies?
__________________
And if I claim to be a wise man, it surely means that I don't know.
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08-30-2014, 11:37 PM
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#13
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Recycles dryer sheets
Join Date: Jun 2010
Location: Sac suburb
Posts: 437
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Quote:
Originally Posted by Onward
I'm considering buying I-Bonds also. Never owned any before.
Any idea whether tax deferred I-Bond income affects ACA subsidies?
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It's interest income, reported on your federal taxes, so that would affect your MAGI and your ACA subsidy. How much the subsidy is affected would depend on when you chose to report that income on your taxes.
This is from the Treasury Direct site:
Tax Considerations for I Bonds
When must I report the interest on my tax form?
You have a choice. You can - report the interest every year
- put off (defer) reporting the interest until you file a federal income tax return for the year in which the first of these events occurs:
-- you redeem (cash in) the bond and receive what the bond is worth, including the interest, or
-- you give up ownership of the bond and the bond is reissued, or
-- the bond stops earning interest because it has reached final maturity
[...]
Whether you are reporting interest at the end of the bond's life or every year, you report the interest from your bonds on your federal income tax return on the same line with other interest income.
(See the rest of that page for pros & cons of reporting interest income every year vs deferring reporting the income until the bond is cashed in.)
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08-31-2014, 05:43 AM
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#14
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gone traveling
Join Date: Oct 2011
Posts: 156
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Have you ever redeemed an ibond? Is it a simple process?
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08-31-2014, 05:47 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,153
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Yes also on the partial redemptions. I think Nords has done this.
How easy to redeem? If from the bank where you originally bought - easy. Otherwise a medallion signature may be required.
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Retired since summer 1999.
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08-31-2014, 07:14 AM
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#16
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Posts: 4,872
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When I ERed I got a bit more conservative in my fixed income and I was looking at I-Bonds as a place to stash money as a buffer against a market down turn. However, I have a stable value fund in my 457 that pays just over 2% so I went with that......but I would have bought some I-Bonds if I didn't have the stable value fund.
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“So we beat on, boats against the current, borne back ceaselessly into the past.”
Current AA: 75% Equity Funds / 15% Bonds / 5% Stable Value /2% Cash / 3% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
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08-31-2014, 07:45 AM
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#17
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Recycles dryer sheets
Join Date: Sep 2013
Location: Tinton Falls
Posts: 169
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I bought a couple of these every pay period for my kids education since they were available. Keep them in the name of the parents and you could have them federal income tax free for college cost categories. They are always state income tax free. The fixed interest component used to be pretty good early on (over 3%); these past few years it has been pathetic. Still, the inflation-based interest component is better than checking/savings/most multi-year CDs... It was disappointing that they put a max limit on purchase amount per year and you can no longer get paper bonds unless you get it via your tax refund.
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08-31-2014, 08:22 AM
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#18
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Thinks s/he gets paid by the post
Join Date: Oct 2009
Posts: 1,190
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The only problem with I-bonds today is a) the fixed portion is zero and b) you can only buy small amounts. Still, very happy I backed the truck up back in the day when you get $120,000 per person (electronic and paper 60,000 each) and could turbo charge the return by buying with a cash rebate credit card. Man those were the good ole days...
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08-31-2014, 08:53 AM
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#19
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Recycles dryer sheets
Join Date: Mar 2004
Posts: 257
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Quote:
Originally Posted by LARS
The only problem with I-bonds today is a) the fixed portion is zero...
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Actually the current fixed rate is 0.10%...
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too cheap to even use dryer sheets - never mind recycle them!
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08-31-2014, 09:35 AM
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#20
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Thinks s/he gets paid by the post
Join Date: Oct 2009
Posts: 1,190
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I stand corrected, but the point effectively still stands.
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