The I Bond Thread

[Another Reader]

Buying the max in January...

 

[steelyman]

I was excited about buying an ibond at the current rate in 2023 as a part of my fixed income allocation. Now I am having second thoughts as I realize in reality I am just continuing to save and maybe now that I am retired I should STOP SAVING. Old habits and all.

I might stop buying I bonds after Jan ‘23. Mine have a specific purpose and amount that will be met at that point. It takes a while to reach a goal given the annual limits.

 

[Sunset]

I was excited about buying an ibond at the current rate in 2023 as a part of my fixed income allocation. Now I am having second thoughts as I realize in reality I am just continuing to save and maybe now that I am retired I should STOP SAVING. Old habits and all.

I think it more as INVESTING in something pretty cashable, like CD's. After all while retired, I have to stay invested to keep up (hopefully) with inflation. I can't just put all my $$ under the mattress.

If there were no bonds, TIP, I-bonds, or CD's, I'd buy more stock with the money rather than have it depreciate against inflation every year.

 

[Chuckanut]

IMO, inflation may still be a threat for many years to come. There seems to be no desire at the Federal level for our representatives to significantly reduce the yearly deficit, much less get close to balancing the budget. The deficit hawks seem to be extinct or at the least critically endangered. Diversification dictates some percentage of my non equities in inflation protected securities. YMMV.

 

[Surewhitey]

I'll keep buying at these rates. $30k more in Jan 2023...

 

[Trailwalker]

I haven't decided yet. I have gifts to deliver in 2023, but they are at 0% fixed rate. Still believe in the value of Ibonds, but I may have enough at this point for my purpose.

 

[skyking1]

I'm going to skip it in 2022 and 2023. I would rather have the cash to build with than mess around with a HELOC or other loan. It is a part of time >>>>money, we are going for it to get built and retired.

 

[pb4uski]

DW and I have gifts to deliver to each other in 2023 that will fill out our personal allotments of $10k each.

DW will probably get $5k with our 2022 income tax refund in Feb/Mar 2023.

We have 3 trusts that can buy $10k each in 2023 and I'll decide that once the new rate is announced in May 2023.

In our case it is all money that would otherwise be in CDs.

 

[tulak]

I’m planning to buy $25k in 2023. $10k in a trust and $15k individual. I decided last year that long-term I wouldn’t mind having a good part of my FI allocation in I Bonds.

I’m happy when FI can yield 3-4%/year and having an inflation hedge is nice. I won’t accept loss of principal, so I avoid bond funds. I’m heavy into equities and that’s where I take my risk.

 

[Surewhitey]

DW and I have gifts to deliver to each other in 2023 that will fill out our personal allotments of $10k each.

DW will probably get $5k with our 2022 income tax refund in Feb/Mar 2023.

We have 3 trusts that can buy $10k each in 2023 and I'll decide that once the new rate is announced in May 2023.

In our case it is all money that would otherwise be in CDs.

Forgot about the $5k paper from income tax return... Up to $35k now...

 

[Montecfo]

I will deliver my gifts and probably buy another 25k.

 

[pb4uski]

Forgot about the $5k paper from income tax return... Up to $35k now...

Wow. I missed that one. When did it change to $35k?

ETA: Are you sure? The Treasury website says $5k.

... In any single calendar year, you can buy up to a total of $5,000 of paper I bonds using your refund. ...

https://www.treasurydirect.gov/rese...ingle calendar year,I bonds using your refund.

 

[RunningBum]

Wow. I missed that one. When did it change to $35k?

It didn't. Poster had previously said they were buying $30K (not sure how), and this $5K makes it $35K for them.

 

[pb4uski]

Ah, I see. I'm guessing that the $30k is two individuals and one trust at $10k each.

 

[Accidental Retiree]

DW and I have gifts to deliver to each other in 2023 that will fill out our personal allotments of $10k each.

DW will probably get $5k with our 2022 income tax refund in Feb/Mar 2023.

We have 3 trusts that can buy $10k each in 2023 and I'll decide that once the new rate is announced in May 2023.

In our case it is all money that would otherwise be in CDs.

We’re in the same situation (except 1 trust instead of 3) and will also consider doing the tax refund process again.

 

[audreyh1]

You know I still do have a lot of unencumbered cash. I may throw my hat in the ring again come Jan. We buy $20K at most per year.

 

[tominboise]

I have about 7 years until I draw SS. I think our after tax brokerage account will last about 6 of those years (depends on what the market does, of course!), so I bought in 2021 and again in 2022. I will buy more in January 2023. My plan is to use them to bridge that gap, if it indeed comes to pass.

 

[beowulf]

I’m assuming there is no restriction on using RMDs to purchase I bonds?

 

[Sunset]

I’m assuming there is no restriction on using RMDs to purchase I bonds?

After you take an RMD, the cash is in your bank account and nobody cares where it came from, so no.

 

[beowulf]

Thank you - I assumed as much, but just wanted to make sure. Many IRS rules are confusing and obscure - to me.

 

[jollystomper]

We have purchased gifts to cover 2023 and 2024 purchases. I will be lazy and wait until April, when the next 6 month rate is known, before I consider buying gifts for 2025.

In theory, since I have a good estimate of what my 2022 federal tax is and have it covered via 401K withdrawals, I could make a $5K quarterly tax payment before January 17th and then buy another $5K in IBonds with the tax refund.

 

[pb4uski]

We have purchased gifts to cover 2023 and 2024 purchases. I will be lazy and wait until April, when the next 6 month rate is known, before I consider buying gifts for 2025.

In theory, since I have a good estimate of what my 2022 federal tax is and have it covered via 401K withdrawals, I could make a $5K quarterly tax payment before January 17th and then buy another $5K in IBonds with the tax refund.

You can still make a 2022 estimated tax payment after Jan 17.

What I did last year is I did my return in early Feb and had a small refund, then made an additional estimated payment for 2021 to increase my refund to $5,000. Then I updated my return for the estimated payment so my refund was $5,000 and took my refund in the form of i-bonds.

When I received the i-bonds I registered them and mailed them back to Treasury converting them to electronic form.

 

[Montecfo]

We have purchased gifts to cover 2023 and 2024 purchases. I will be lazy and wait until April, when the next 6 month rate is known, before I consider buying gifts for 2025.

In theory, since I have a good estimate of what my 2022 federal tax is and have it covered via 401K withdrawals, I could make a $5K quarterly tax payment before January 17th and then buy another $5K in IBonds with the tax refund.

You could also simply make a payment anytime before you file the return.

 

[Teacher Terry]

I didn’t realize you could order a IBond with a future date to actually buy it until I read it here. I just put in my order for January.

 

[audreyh1]

I didn’t realize you could order a IBond with a future date to actually buy it until I read it here. I just put in my order for January.

That’s convenient!

I knew you could schedule future treasury purchases.