Thanks Jeremy. 2 questions if you don't mind.1- I have I bonds that mature in 2029 2030 and 2031 with a fixed rate of 3.30 , 3,60, and 3.30 . Did they change the way they come up with the fixed rate? 2- If you were 54 and had I bonds that mature in 2035 with a fixed rate of 1.00 % would you sell 5 of 20 of them now and pay 22% in taxes and use the proceeds to buy 10k in I bonds before Nov 1? Keeping in mind you would cash the new 10k I bonds in 2026 to bridge getting to 67 or 68 for higher Social Security benefits. I am not asking for financial advice. I am asking a hypothetical scenario of what you would do on a mathematical question considering taxes being on sale now.
@chriscarlisle2172 Such great questions! You're putting in the time to get this right! Did they change the way they come up with the fixed rate? I don't think so, but who knows - they never publish the fixed rate formula. That said real yields were around 3% back in late 90s: fred.stlouisfed.org/series/REAINTRATREARAT10Y Should you sell 1% fixed rate bonds, that you intend to hold for 2 years to get 1.3% fixed rate bonds, and pay the taxes now? If you rebuy new I Bonds now you'll have a new 5 year "lose 3mo interest" penalty period so it seems that with that short time frame its probably not worth it. If you're trying to get ahead of the likely higher tax rate then the first recommendation is usually a Roth Conversion.
Thanks, Jeremy, for your prodigious content creation and desire to do the right thing for your clients.
I love to serve! Thanks for the high praise!
@@MrRetirement My pleasure.
😀
Thanks Jeremy. 2 questions if you don't mind.1- I have I bonds that mature in 2029 2030 and 2031 with a fixed rate of 3.30 , 3,60, and 3.30 . Did they change the way they come up with the fixed rate? 2- If you were 54 and had I bonds that mature in 2035 with a fixed rate of 1.00 % would you sell 5 of 20 of them now and pay 22% in taxes and use the proceeds to buy 10k in I bonds before Nov 1? Keeping in mind you would cash the new 10k I bonds in 2026 to bridge getting to 67 or 68 for higher Social Security benefits. I am not asking for financial advice. I am asking a hypothetical scenario of what you would do on a mathematical question considering taxes being on sale now.
@chriscarlisle2172 Such great questions! You're putting in the time to get this right!
Did they change the way they come up with the fixed rate? I don't think so, but who knows - they never publish the fixed rate formula. That said real yields were around 3% back in late 90s: fred.stlouisfed.org/series/REAINTRATREARAT10Y
Should you sell 1% fixed rate bonds, that you intend to hold for 2 years to get 1.3% fixed rate bonds, and pay the taxes now? If you rebuy new I Bonds now you'll have a new 5 year "lose 3mo interest" penalty period so it seems that with that short time frame its probably not worth it.
If you're trying to get ahead of the likely higher tax rate then the first recommendation is usually a Roth Conversion.