Saving Bonds — cashing in
My wife has approximately $1,500.00 in saving bonds she purchased over 25 years ago. I’m sure they all have matured and then some. She will be retiring next year. My question is, should we redeem them and put those funds into savings account?
Terry Says
Well, don’t jump to any conclusions. Those older bonds likely have not yet matured — and they carry a higher fixed base-rate than you could get today. So you don’t want to redeem them before maturity. To find out their current price and maturity date, go to this link at TreasuryDirect.gov.
Then, remember that when you do cash them in, all that accrued value is considered taxable interest. It could even raise the amount you are paying for your Medicare Part B premium! You are supposed to redeem bonds in the year they reach full maturity. But many people miss this rule. Spreading out the redemption over several years will also spread out the taxable income. So do your home work now, by using the calculator at the link I gave you to figure out when they do start maturing.
