I Bonds...splitting the difference.

I am He

Recycles dryer sheets
Joined
May 10, 2019
Messages
107
I decided my new M.O. will be buy $2.5k at the end of April (in addition to the $5k with the tax refund) and $7.5k in May to split the difference should the fixed rate component change. I had put in an order after hemming and hawing all month about "now" or "wait?" I think this should simplify my thoughts going forward having a process in place.

If I wanted to pay taxes today, I'd probably do a TIPS but as I prefer deferring them, I Bonds are where I'm at.
 
I sold $10K of older 0% fixed-rate I bonds at the beginning of April and purchased $10K of 1.3% fixed-rate I bonds yesterday. I have about 10% of my portfolio in I bonds and feel comfortable with this allocation for now. This will increase my return by a whopping ~$130 a year. But, over 30 years. Boy howdy, I'll be blowing the dough! :dance:
 
Interesting. I loaded up on the current IBonds in January. I had sold some older lower fixed rate IBonds last December.

Based on the March CPI, the TIPSwatch blogger thinks the fixed rate might be the same or slightly lower in May. March inflation sets I Bond’s new variable rate at 2.96%

I’m hoping I am done with IBonds. I’ve got plenty and I’ve culled out the lowest fixed rate ones so hope to leave them alone.
 
I sold $10K of older 0% fixed-rate I bonds at the beginning of April and purchased $10K of 1.3% fixed-rate I bonds yesterday. I have about 10% of my portfolio in I bonds and feel comfortable with this allocation for now. This will increase my return by a whopping ~$130 a year. But, over 30 years. Boy howdy, I'll be blowing the dough! :dance:
I did exactly the same thing. Unfortunate and that I have three LLCs so including my wife I have five accounts that I can fund. I've got about half of mine in 1.3% and half and 9% healing 5.27 and 4.27% I believe right now respectively. I'm considering slowly trading the nines for 1.3's over the next couple of years assuming that 1.3 stays with us for a while.
 
We already loaded up our 2024 TIPS, including the $5K via tax return, all with 1.3% fixed rate. We do have some 0% fixed I-bonds, but when I go through the math (in real, not nominal terms) I only see one or two that are worth selling and purchasing at a higher yield. A lot of assumptions go into that, including what I'm willing and not willing to do, etc., but at this point the delta isn't worth messing with for us.

I have my own model to predict the May fixed rate and right now it's tending towards 1.3% (barely) with just a few days left in the month. If I were to buy more this year and I had the money ready to do so, I'd probably just go ahead and make the purchase now and get the guaranteed 1.3%. On the other hand, given the 0% fixed rates in the not too distant past, I wouldn't complain all that much at 1.2% if that's where we end up in May.

Will probably make one more round of purchases next year and call it a day (or not).

Cheers.
 
Hate to say this but been so lazy we just been buying after the first of the year. After many years we are getting close to about 3 years of living expenses at 50-60k/year.

At some point I need to start selling off the 0% ones and reinvest. Will see where we are at in a couple of more years.
 
Several people have figured out how the Treasury is setting the fixed rate, and while there is no guarantee, the last two sales had exactly the fixed rate that they guessed at. The variable rate is always known in advance.
So you shouldn't have to split the difference, both in late April and October, research what the estimate will be and decide whether to wait for the first

Tipswatch.com and the Diamond Nest Egg YouTube channel explain how the fixed rate can be calculated in advance.
 
Several people have figured out how the Treasury is setting the fixed rate, and while there is no guarantee, the last two sales had exactly the fixed rate that they guessed at. The variable rate is always known in advance.
So you shouldn't have to split the difference, both in late April and October, research what the estimate will be and decide whether to wait for the first

Tipswatch.com and the Diamond Nest Egg YouTube channel explain how the fixed rate can be calculated in advance.
I guess I was thinking that the variable rate was the one they were predicting and that the fixed side was more open due to the latest rates/sales of the auctions. I could certainly be wrong.
 
The variable one is calculated from the prior 6 months inflation and has been understood for years.
Only recently did a few people do enough research to show the fixed rate is tied to TIPS rate averages. I don't remember the exact calculations.
 
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