Mature Paper Saving Bonds
Dear Terry,
I’m just turned 65 and have been on SSDI since 2015. I have over $132000.00 in EE Series Paper Savings Bonds of which $56000.00 have matured. Do I need to cash these in all at once or can I cash in say $5000.00 per year? I do have a TreasuryDirect account and I know that if I send all the bonds into them that they will all be cashed out, so when I do I will only send the ones that I want to cash out. Thanks for any and all advise you can give me. I plan on putting the proceeds of these bonds in a money market account that I have that at this point is paying 4.66 APY.
Terry Says
Oh, I wish you had asked last year — before you started Medicare. Did you start Medicare yet? If not because you are still working, now is the time to cash them in — at least a year before starting. That huge lump of taxable income will increase your Medicare Part B premiums for a year or two until your income is reevaluated.
That argues for cashing them in all at once. At least the income bump will only impact one year, and two years later you can request that your Part B premium be re=evaluated. And yes, you should by law, cash them in the year of maturity — though many people choose to spread the gains out over the years to stay below the Medicare income IRMAA adjustment limits.
If you want to know exactly where that additional gain would push you into a higher Part B premium, click here.
