I Bonds are a screaming buy - Tipswatch

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
SnowBog
Posts: 4699
Joined: Fri Dec 21, 2018 10:21 pm

Re: I Bonds are a screaming buy - Tipswatch

Post by SnowBog »

protagonist wrote: Sun Oct 18, 2020 10:12 am
michaellarimore wrote: Sat Oct 17, 2020 1:10 pm I am understanding that my wife and I can each get $10k and overpay our taxes by $5k and get the refund as a paper I-bond and then convert it to a digital I-bond. For a total of $25k/year - Is this not correct ? The Trust sounds like a nice addition...
Yes, this is true.
I set up a revocable trust years ago. I buy $25K in I-bonds every year.

Others here have a favorable opinion of EE bonds as well. Personally, even if I were in my 20s I would not buy them. I don't like their lack of liquidity and lack of inflation protection. A lot can happen in 20 years- runaway inflation like in the 1970s, life changes requiring access to funds, etc. IMHO the additional risk is not worth the additional benefit (over other fixed income alternatives).

In my humble opinion fixed income investments should be as close to risk-free as possible. Money that one is willing to risk for growth should be invested in the stock market. In that manner, stocks and fixed income investments serve their separate purposes.
One EE Bond scenario I'm particularly fond of, and wish I knew about years ago, is Mel's "build your own annuity".

In my particular case, I'm hoping to be able to retire early, but want to delay social security and pensions until later. That leaves me reliant upon my portfolio and exposed to sequence of returns risk. By buying $10k each (self + spouse) of EE bonds each year, we create an income floor of $40k/year 20 years from date of purchase.

This reduces the need for drawing down the portfolio, and IMHO also lessens the SoR risks.

Obviously there is a risk of high inflation, but we also but $10k each of I Bonds, and the EE Bonds are only a small part of our portfolio, which we expect the rest of the portfolio (at least the equity side) will help hedge against inflation.

To me the biggest downside is the 20 year "commitment" for EE Bonds to pay off. In my case, I found it about them too late, so I'll only be able to use EE Bonds to cover about half the time I would have otherwise liked to have covered. But I acknowledge, they probably fit a narrow band of appeal (which includes me.)
protagonist
Posts: 9277
Joined: Sun Dec 26, 2010 11:47 am

Re: I Bonds are a screaming buy - Tipswatch

Post by protagonist »

SnowBog wrote: Sun Oct 18, 2020 10:47 am
In my particular case, I'm hoping to be able to retire early, but want to delay social security and pensions until later. That leaves me reliant upon my portfolio and exposed to sequence of returns risk. By buying $10k each (self + spouse) of EE bonds each year, we create an income floor of $40k/year 20 years from date of purchase.

This reduces the need for drawing down the portfolio, and IMHO also lessens the SoR risks.

Obviously there is a risk of high inflation, but we also but $10k each of I Bonds, and the EE Bonds are only a small part of our portfolio, which we expect the rest of the portfolio (at least the equity side) will help hedge against inflation.

To me the biggest downside is the 20 year "commitment" for EE Bonds to pay off. In my case, I found it about them too late, so I'll only be able to use EE Bonds to cover about half the time I would have otherwise liked to have covered. But I acknowledge, they probably fit a narrow band of appeal (which includes me.)

If instead of buying 10K each of I-bonds and EE-bonds/year, you both bought just 20K of I-bonds, you would have a minimum of $800K inflation-adjusted dollars after 20 years (and that is assuming a 0% rate on all the I-bonds- certainly you would wind up with more than that). That should be more than enough (plus hopefully social security) to assure a comfortable retirement, and I would assume that any excess would probably be invested in stocks, cds, bonds, whatever, depending on your risk tolerance. The difference is that your $800K plus, inflation-adjusted, would be essentially risk-free, and if you needed money before 2040 due to unforeseen circumstances you could withdraw from it and you would not take any significant hit. A lot can happen in 20 years. What will your $40K in EE bonds be worth then?
Grt2bOutdoors
Posts: 25625
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: I Bonds are a screaming buy - Tipswatch

Post by Grt2bOutdoors »

protagonist wrote: Sun Oct 18, 2020 12:06 pm
SnowBog wrote: Sun Oct 18, 2020 10:47 am
In my particular case, I'm hoping to be able to retire early, but want to delay social security and pensions until later. That leaves me reliant upon my portfolio and exposed to sequence of returns risk. By buying $10k each (self + spouse) of EE bonds each year, we create an income floor of $40k/year 20 years from date of purchase.

This reduces the need for drawing down the portfolio, and IMHO also lessens the SoR risks.

Obviously there is a risk of high inflation, but we also but $10k each of I Bonds, and the EE Bonds are only a small part of our portfolio, which we expect the rest of the portfolio (at least the equity side) will help hedge against inflation.

To me the biggest downside is the 20 year "commitment" for EE Bonds to pay off. In my case, I found it about them too late, so I'll only be able to use EE Bonds to cover about half the time I would have otherwise liked to have covered. But I acknowledge, they probably fit a narrow band of appeal (which includes me.)

If instead of buying 10K each of I-bonds and EE-bonds/year, you both bought just 20K of I-bonds, you would have a minimum of $800K inflation-adjusted dollars after 20 years (and that is assuming a 0% rate on all the I-bonds- certainly you would wind up with more than that). That should be more than enough (plus hopefully social security) to assure a comfortable retirement, and I would assume that any excess would probably be invested in stocks, cds, bonds, whatever, depending on your risk tolerance. The difference is that your $800K plus, inflation-adjusted, would be essentially risk-free, and if you needed money before 2040 due to unforeseen circumstances you could withdraw from it and you would not take any significant hit. A lot can happen in 20 years. What will your $40K in EE bonds be worth then?
The maximum annual purchase per person is $10K for I Bonds. So the minimum they will have is $200 to $400k on inflation adjusted proceeds. That said, why don’t you calculate what 15 year I bonds are worth today? I can pretty much estimate that they will not be worth a double in the next 5 years while the EE bonds will be. Unless you believe we will have rampant inflation in the next 5 years.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
protagonist
Posts: 9277
Joined: Sun Dec 26, 2010 11:47 am

Re: I Bonds are a screaming buy - Tipswatch

Post by protagonist »

Grt2bOutdoors wrote: Sun Oct 18, 2020 12:27 pm
protagonist wrote: Sun Oct 18, 2020 12:06 pm
SnowBog wrote: Sun Oct 18, 2020 10:47 am
In my particular case, I'm hoping to be able to retire early, but want to delay social security and pensions until later. That leaves me reliant upon my portfolio and exposed to sequence of returns risk. By buying $10k each (self + spouse) of EE bonds each year, we create an income floor of $40k/year 20 years from date of purchase.

This reduces the need for drawing down the portfolio, and IMHO also lessens the SoR risks.

Obviously there is a risk of high inflation, but we also but $10k each of I Bonds, and the EE Bonds are only a small part of our portfolio, which we expect the rest of the portfolio (at least the equity side) will help hedge against inflation.

To me the biggest downside is the 20 year "commitment" for EE Bonds to pay off. In my case, I found it about them too late, so I'll only be able to use EE Bonds to cover about half the time I would have otherwise liked to have covered. But I acknowledge, they probably fit a narrow band of appeal (which includes me.)

If instead of buying 10K each of I-bonds and EE-bonds/year, you both bought just 20K of I-bonds, you would have a minimum of $800K inflation-adjusted dollars after 20 years (and that is assuming a 0% rate on all the I-bonds- certainly you would wind up with more than that). That should be more than enough (plus hopefully social security) to assure a comfortable retirement, and I would assume that any excess would probably be invested in stocks, cds, bonds, whatever, depending on your risk tolerance. The difference is that your $800K plus, inflation-adjusted, would be essentially risk-free, and if you needed money before 2040 due to unforeseen circumstances you could withdraw from it and you would not take any significant hit. A lot can happen in 20 years. What will your $40K in EE bonds be worth then?
The maximum annual purchase per person is $10K for I Bonds. So the minimum they will have is $200 to $400k on inflation adjusted proceeds. That said, why don’t you calculate what 15 year I bonds are worth today? I can pretty much estimate that they will not be worth a double in the next 5 years while the EE bonds will be. Unless you believe we will have rampant inflation in the next 5 years.
I was referring only to their 2020 contribution which would mature in 2040 and be worth $40K in 2040 dollars. They would have invested $400K in EE bonds by 2040, but they would not receive the full $800K nominal until 2060, at a rate of $40K/year.

The point is not whether, ultimately, I-bonds or EE bonds would yield more over 20 years. And how much they would be worth compared with inflation over the past 15 years as you suggest is irrelevant. The period 2005-2020 (an era of low inflation and a bond bull market due to steeply declining interest rates, plus the unpredictable 2008 crash) has little if any predictive value regarding the period 2020-2040. Neither does the 15 year period 1968-1983. There is no way to predict whether I-bonds will be worth more or less than EE bonds 20 years from now. The point is that the purpose of fixed income investment is safety, and EE bonds do not offer that, nor do they offer liquidity without a very stiff penalty. If one is looking for maximum growth, one should invest in stocks and accept the risk.

As for your question whether we will have rampant inflation between now and 2040, I have no clue. But I do have some personal experience with rampant inflation and lack of predictability. I bought property in the early 1990s in Venezuela, at which time Venezuela was the wealthiest and most stable democracy in South America (with possible exception of Argentina). You ask, will we have runaway inflation between now and 2040? The following is the only way I can respond to that:

Most of our lifetimes have distorted our perspective due to recency bias during the most remarkable, prosperous, stable 75 year period (since the end of WW2) in the West than the world has possibly ever known. We see things through rose colored glasses. No major wars , and none on American or Western European soil at all. No major epidemics. No major financial crises. No droughts or famines. Stable democracy. Explosive and likely unprecedented economic growth. My grandfather came to this country when his family escaped the pogroms in Russia at the end of the 19th century. In his 75 years of life he went through pogroms, typhoid epidemic, WWI (in which he served), flu epidemic of 1918-19, the Great Depression, WW2 (when he lost half his family in the Holocaust), etc etc etc. His life was pretty typical in ups and downs. And he was lucky not to be born a bit earlier, so he escaped the Civil War and the subsequent economic crisis. When I look at his life, and those of almost every other generation prior to mine throughout history, I think of what he would be saying about 2020: "COVID? Schmovid!! You complain about wearing masks? waah waah waah! You kids have no idea how good you have had it!!"

I hope our luck holds out to 2040 and 2060 and beyond. I wouldn't take bets either way. To quote Firesign Theater: "I'm just a bozo on this bus".
JBTX
Posts: 11227
Joined: Wed Jul 26, 2017 12:46 pm

Re: I Bonds are a screaming buy - Tipswatch

Post by JBTX »

SnowBog wrote: Sun Oct 18, 2020 10:47 am
protagonist wrote: Sun Oct 18, 2020 10:12 am
michaellarimore wrote: Sat Oct 17, 2020 1:10 pm I am understanding that my wife and I can each get $10k and overpay our taxes by $5k and get the refund as a paper I-bond and then convert it to a digital I-bond. For a total of $25k/year - Is this not correct ? The Trust sounds like a nice addition...
Yes, this is true.
I set up a revocable trust years ago. I buy $25K in I-bonds every year.

Others here have a favorable opinion of EE bonds as well. Personally, even if I were in my 20s I would not buy them. I don't like their lack of liquidity and lack of inflation protection. A lot can happen in 20 years- runaway inflation like in the 1970s, life changes requiring access to funds, etc. IMHO the additional risk is not worth the additional benefit (over other fixed income alternatives).

In my humble opinion fixed income investments should be as close to risk-free as possible. Money that one is willing to risk for growth should be invested in the stock market. In that manner, stocks and fixed income investments serve their separate purposes.
One EE Bond scenario I'm particularly fond of, and wish I knew about years ago, is Mel's "build your own annuity".

In my particular case, I'm hoping to be able to retire early, but want to delay social security and pensions until later. That leaves me reliant upon my portfolio and exposed to sequence of returns risk. By buying $10k each (self + spouse) of EE bonds each year, we create an income floor of $40k/year 20 years from date of purchase.

This reduces the need for drawing down the portfolio, and IMHO also lessens the SoR risks.

Obviously there is a risk of high inflation, but we also but $10k each of I Bonds, and the EE Bonds are only a small part of our portfolio, which we expect the rest of the portfolio (at least the equity side) will help hedge against inflation.

To me the biggest downside is the 20 year "commitment" for EE Bonds to pay off. In my case, I found it about them too late, so I'll only be able to use EE Bonds to cover about half the time I would have otherwise liked to have covered. But I acknowledge, they probably fit a narrow band of appeal (which includes me.)
Same here. Only recently did I become aware of the 20 year doubling rule. As I am late 50s I am nearing the point at which waiting 20 years becomes less attractive.
Topic Author
Day9
Posts: 1000
Joined: Mon Jun 11, 2012 6:22 pm

Re: I Bonds are a screaming buy - Tipswatch

Post by Day9 »

Wow quite a heated debate on I Bonds vs EE Bonds. Of course my first though is why not both? I agree with the spirit of the poster above that bonds are for safety, but he has much more strict requirements for safety than I do when he considers EE Bonds to not be sufficiently safe.

Of course there is a limit to $10k per year in I Bonds, and the point of this thread started months ago was that TIPS have negative real yields and I Bonds don't, making I Bonds a "screaming buy", which is still true today. So the question I would ask someone like the poster above is what to do after you maxed out your I Bonds for the year? Buy negative real yielding TIPS, relatively high yielding EE Bonds, or something else?

But actually I don't think we should stray from the original intent of this thread, which is I Bonds. Has anyone bought or is planning to buy the 0% real yielding I Bonds before the year ends?
I'm just a fan of the person I got my user name from
User avatar
anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

Re: I Bonds are a screaming buy - Tipswatch

Post by anon_investor »

Day9 wrote: Sun Oct 18, 2020 3:04 pm Wow quite a heated debate on I Bonds vs EE Bonds. Of course my first though is why not both? I agree with the spirit of the poster above that bonds are for safety, but he has much more strict requirements for safety than I do when he considers EE Bonds to not be sufficiently safe.

Of course there is a limit to $10k per year in I Bonds, and the point of this thread started months ago was that TIPS have negative real yields and I Bonds don't, making I Bonds a "screaming buy", which is still true today. So the question I would ask someone like the poster above is what to do after you maxed out your I Bonds for the year? Buy negative real yielding TIPS, relatively high yielding EE Bonds, or something else?

But actually I don't think we should stray from the original intent of this thread, which is I Bonds. Has anyone bought or is planning to buy the 0% real yielding I Bonds before the year ends?
I already maxed out in April to get the 0.2% fixed I Bonds. But based on the anticipated 1.68% variable rate starting Nov 1, I think I will buy 0% fixed I Bonds next year when my 1.85% CDs expire in February.
Angst
Posts: 2968
Joined: Sat Jun 09, 2007 11:31 am

Re: I Bonds are a screaming buy - Tipswatch

Post by Angst »

protagonist wrote: Sun Oct 18, 2020 2:13 pm The point is not whether, ultimately, I-bonds or EE bonds would yield more over 20 years. And how much they would be worth compared with inflation over the past 15 years as you suggest is irrelevant. The period 2005-2020 (an era of low inflation and a bond bull market due to steeply declining interest rates, plus the unpredictable 2008 crash) has little if any predictive value regarding the period 2020-2040. Neither does the 15 year period 1968-1983. There is no way to predict whether I-bonds will be worth more or less than EE bonds 20 years from now. The point is that the purpose of fixed income investment is safety, and EE bonds do not offer that, nor do they offer liquidity without a very stiff penalty. If one is looking for maximum growth, one should invest in stocks and accept the risk.
I have a different take on "safety", and I find EE bonds to be a remarkably "safe" investment these days. Building a fixed (non-rolling) ladder of zero coupon Treasury bonds to guarantee a portion of one's anticipated future annual expenses in retirement, for example, is not risky behavior, it's downright conservative. (And if you build that ladder with I bonds or TIPS, it's exceptionally conservative.) But let's stick with nominals, since that's what EE bonds are anyhow. Considering where the nominal yield curve is today (let alone, where it's been the last decade), EE Bonds will blow 20-yr zero coupon Treasury STRIPS out of the water, it's no contest.

An EE bond ladder is like building one's own guaranteed insurance contract, with the highest rated insurance company you can get, which you can back out of, but at a painfully escalating price over time. The need that one hold their EE Bonds for 20 years is a commitment that some people appear unable to grapple with. But of course, you can build your ladder with ordinary, 20-yr zero coupon Treasury bonds earning maybe 1.3% - very conservative, very safe - and get to watch them rise and fall in value over time and capitulate anytime w/o the kind of "penalty" paid for selling EE bonds... but many people have no trouble making a serious, 20-yr financial commitment to their future, and I'd rather prefer the guaranteed 3.53% of EE bonds over today's 1.3% zeroes. That's a big difference in returns. :shock:
User avatar
Mel Lindauer
Moderator
Posts: 35782
Joined: Mon Feb 19, 2007 7:49 pm
Location: Daytona Beach Shores, Florida
Contact:

Re: I Bonds are a screaming buy - Tipswatch

Post by Mel Lindauer »

Angst wrote: Sun Oct 18, 2020 3:45 pm
protagonist wrote: Sun Oct 18, 2020 2:13 pm The point is not whether, ultimately, I-bonds or EE bonds would yield more over 20 years. And how much they would be worth compared with inflation over the past 15 years as you suggest is irrelevant. The period 2005-2020 (an era of low inflation and a bond bull market due to steeply declining interest rates, plus the unpredictable 2008 crash) has little if any predictive value regarding the period 2020-2040. Neither does the 15 year period 1968-1983. There is no way to predict whether I-bonds will be worth more or less than EE bonds 20 years from now. The point is that the purpose of fixed income investment is safety, and EE bonds do not offer that, nor do they offer liquidity without a very stiff penalty. If one is looking for maximum growth, one should invest in stocks and accept the risk.
I have a different take on "safety", and I find EE bonds to be a remarkably "safe" investment these days. Building a fixed (non-rolling) ladder of zero coupon Treasury bonds to guarantee a portion of one's anticipated future annual expenses in retirement, for example, is not risky behavior, it's downright conservative. (And if you build that ladder with I bonds or TIPS, it's exceptionally conservative.) But let's stick with nominals, since that's what EE bonds are anyhow. Considering where the nominal yield curve is today (let alone, where it's been the last decade), EE Bonds will blow 20-yr zero coupon Treasury STRIPS out of the water, it's no contest.

An EE bond ladder is like building one's own guaranteed insurance contract, with the highest rated insurance company you can get, which you can back out of, but at a painfully escalating price over time. The need that one hold their EE Bonds for 20 years is a commitment that some people appear unable to grapple with. But of course, you can build your ladder with ordinary, 20-yr zero coupon Treasury bonds earning maybe 1.3% - very conservative, very safe - and get to watch them rise and fall in value over time and capitulate anytime w/o the kind of "penalty" paid for selling EE bonds... but many people have no trouble making a serious, 20-yr financial commitment to their future, and I'd rather prefer the guaranteed 3.53% of EE bonds over today's 1.3% zeroes. That's a big difference in returns. :shock:
Well said.
Best Regards - Mel | | Semper Fi
SnowBog
Posts: 4699
Joined: Fri Dec 21, 2018 10:21 pm

Re: I Bonds are a screaming buy - Tipswatch

Post by SnowBog »

protagonist wrote: Sun Oct 18, 2020 12:06 pm
SnowBog wrote: Sun Oct 18, 2020 10:47 am
In my particular case, I'm hoping to be able to retire early, but want to delay social security and pensions until later. That leaves me reliant upon my portfolio and exposed to sequence of returns risk. By buying $10k each (self + spouse) of EE bonds each year, we create an income floor of $40k/year 20 years from date of purchase.

This reduces the need for drawing down the portfolio, and IMHO also lessens the SoR risks.

Obviously there is a risk of high inflation, but we also but $10k each of I Bonds, and the EE Bonds are only a small part of our portfolio, which we expect the rest of the portfolio (at least the equity side) will help hedge against inflation.

To me the biggest downside is the 20 year "commitment" for EE Bonds to pay off. In my case, I found it about them too late, so I'll only be able to use EE Bonds to cover about half the time I would have otherwise liked to have covered. But I acknowledge, they probably fit a narrow band of appeal (which includes me.)

If instead of buying 10K each of I-bonds and EE-bonds/year, you both bought just 20K of I-bonds, you would have a minimum of $800K inflation-adjusted dollars after 20 years (and that is assuming a 0% rate on all the I-bonds- certainly you would wind up with more than that). That should be more than enough (plus hopefully social security) to assure a comfortable retirement, and I would assume that any excess would probably be invested in stocks, cds, bonds, whatever, depending on your risk tolerance. The difference is that your $800K plus, inflation-adjusted, would be essentially risk-free, and if you needed money before 2040 due to unforeseen circumstances you could withdraw from it and you would not take any significant hit. A lot can happen in 20 years. What will your $40K in EE bonds be worth then?
In my case, I'm too late to build up 20 years (or more specifically, I don't see the appeal for years after our social security and pensions kick in, which covers the majority of our expenses). I'd happily do so if I could role back the clock. But I'll settle for the years I have left.

And I personally don't see this as an EE vs. I Bond debate. I hold both, for slightly different reasons. I Bonds provide inflation protection, more flexibility, better expected earnings (prior to 20 years) and expanded tax deferred space. EE Bonds also offer expanded tax deferred space, guaranteed returns which also happen to be better expected earnings (after doubling at 20 years), but less flexibility.

But I also hold munis, total bond, and total stock and international. Diversity is a good thing.
WolfgangPauli
Posts: 617
Joined: Sun Aug 23, 2015 8:28 am

Re: I Bonds are a screaming buy - Tipswatch

Post by WolfgangPauli »

leftcoaster wrote: Tue Mar 10, 2020 9:25 am Reminder that you can actually buy 20k - 10k personal and 10k in a revocable living trust. For a married couple that means 30k. And you can have all reissued to the trust.

Add to that the 5k from an IRS refund and you can do 65k / year.
Wait.. I did not know this. I thought it was based on a SSN. So, using your SSN for both personal and trust would preclude this. Can you reference where this says this somewhere?

Also, another quick note. How hard is it to move the bonds I have into the Trust account? I opened the trust account but I am nervous about moving bonds into it? The instructions on the site seem really weird. Any reference would be much appreciated.
Twitter: @JAXbogleheads | EM: JAXbogleheads@gmail.com
SnowBog
Posts: 4699
Joined: Fri Dec 21, 2018 10:21 pm

Re: I Bonds are a screaming buy - Tipswatch

Post by SnowBog »

WolfgangPauli wrote: Sun Oct 18, 2020 9:52 pm
leftcoaster wrote: Tue Mar 10, 2020 9:25 am Reminder that you can actually buy 20k - 10k personal and 10k in a revocable living trust. For a married couple that means 30k. And you can have all reissued to the trust.

Add to that the 5k from an IRS refund and you can do 65k / year.
Wait.. I did not know this. I thought it was based on a SSN. So, using your SSN for both personal and trust would preclude this. Can you reference where this says this somewhere?

Also, another quick note. How hard is it to move the bonds I have into the Trust account? I opened the trust account but I am nervous about moving bonds into it? The instructions on the site seem really weird. Any reference would be much appreciated.
There's a bunch of threads on this, if I remember searching for I Bonds SSN (or EE Bonds SSN) turns up the main ones, which have links to the actual language.

But paraphrasing as best as I can recall, the SSN requirement is unique to each person or entity. Since a trust (such as your living trust) is a different entity than you, both can use the same SSN.

I've only recently setup my TD account for my living trust, had no issues. But admittedly I haven't purchased any yet in the trust.

As for moving bonds into your trust, I'm less sure, but I think you'd basically have the bonds "reissued" in a new name (your trust name). I'm not sure if that's a single step, or if the reissue is treated like a "gift" at that point and then needs to be transferred to the recipient as well. I'm sure others with more experience can clarify.
leftcoaster
Posts: 741
Joined: Mon Jul 23, 2007 4:04 pm

Re: I Bonds are a screaming buy - Tipswatch

Post by leftcoaster »

WolfgangPauli wrote: Sun Oct 18, 2020 9:52 pm
leftcoaster wrote: Tue Mar 10, 2020 9:25 am Reminder that you can actually buy 20k - 10k personal and 10k in a revocable living trust. For a married couple that means 30k. And you can have all reissued to the trust.

Add to that the 5k from an IRS refund and you can do 65k / year.
Wait.. I did not know this. I thought it was based on a SSN. So, using your SSN for both personal and trust would preclude this. Can you reference where this says this somewhere?

Also, another quick note. How hard is it to move the bonds I have into the Trust account? I opened the trust account but I am nervous about moving bonds into it? The instructions on the site seem really weird. Any reference would be much appreciated.
I’ve been doing the 30k for years. Last year I happened to call treasury direct with a question and it came up. The fellow said , that isn’t supposed to be possible but that it wouldn’t surprise him. You do get an email alert when the transfer goes through about Being over the limit, but that’s the end of it.

To transfer from one TD account to another, use this form https://treasurydirect.gov/pdf/rs/PDF5511.pdf

To reissue paper bonds to a trust account - https://treasurydirect.gov/forms/sav1851.pdf
WolfgangPauli
Posts: 617
Joined: Sun Aug 23, 2015 8:28 am

Re: I Bonds are a screaming buy - Tipswatch

Post by WolfgangPauli »

leftcoaster wrote: Sat Oct 24, 2020 5:23 am
WolfgangPauli wrote: Sun Oct 18, 2020 9:52 pm
leftcoaster wrote: Tue Mar 10, 2020 9:25 am Reminder that you can actually buy 20k - 10k personal and 10k in a revocable living trust. For a married couple that means 30k. And you can have all reissued to the trust.

Add to that the 5k from an IRS refund and you can do 65k / year.
Wait.. I did not know this. I thought it was based on a SSN. So, using your SSN for both personal and trust would preclude this. Can you reference where this says this somewhere?

Also, another quick note. How hard is it to move the bonds I have into the Trust account? I opened the trust account but I am nervous about moving bonds into it? The instructions on the site seem really weird. Any reference would be much appreciated.
I’ve been doing the 30k for years. Last year I happened to call treasury direct with a question and it came up. The fellow said , that isn’t supposed to be possible but that it wouldn’t surprise him. You do get an email alert when the transfer goes through about Being over the limit, but that’s the end of it.

To transfer from one TD account to another, use this form https://treasurydirect.gov/pdf/rs/PDF5511.pdf

To reissue paper bonds to a trust account - https://treasurydirect.gov/forms/sav1851.pdf
I would be very careful myself on this. Just because they system "allows it" does not mean it is "allowed" and you are responsible for it. Perhaps @mel or someone can weigh in here as I would love to know but I would not assume because they system allows it that you can do it.
Twitter: @JAXbogleheads | EM: JAXbogleheads@gmail.com
Post Reply