I bonds
I now have about $4000 in I bonds that have reached the 20 year mark. If I cash them, will I pay tax on them. About half is interest. I’m retired and pension, SS and ira net a bit over $60,000. Would it be better to just cash a couple each year? Or bite the bullet and do it all at once?
Terry Says
Well, first of all those bonds don’t mature for <> years! And older I bonds have a very high base rate, plus the current inflation adjustment. So DON’T SELL THEM!!! Wait another 10 years!
I’m just about to post a column on the topic of matured savings bonds. I actually “finessed” the answer to that question. Treasury said you “should” cash them in the year they mature. But when I asked them if they are out chasing after people with matured savings bonds, I was met with silence.
Somewhere between those two extremes, once your bonds do mature, it might pay to see how much interest you have earned and whether that amount will move you into a higher bracket for Medicare Part B, or make your SS benefits taxable.
Read the article to learn the current value (since those old bonds didn’t just get to a certain face value).
But let me reiterate. NO Series I bonds have matured yet. Don’t sell them!!! They keep earning the new, higher inflation adjustment.
