Treasury bonds
Hi Terry. I’m a retired CPD officer. 68yrs. Have a mortgage. I have approximately 130,000 in deferred compensation which is around 2%. You have to pay about 20% in federal taxes whenever you withdraw. I’m interested in the treasury bonds you talk about on WGN. I do not understand the time you have to hold the bonds. If it’s five years it might not be right for me. Any help you can give me would be greatly appreciated.
Terry Says
Please read this column about Series I savings bonds — which you should plan to hold for 5 years: https://www.terrysavage.com/i-bonds-everything-you-must-know/
Please read this column to understand about Treasury Bills — which you would purchase in 26 week (6 month) increments: https://www.terrysavage.com/t-bills-beat-cds/
You need a bit of financial planning advice. Yes, they WITHHOLD 20% for taxes if you withdraw from your deferred account. But the amount you withdraw is added to your income for the year — and could push you into a higher tax bracket and require you to pay more than was withheld at tax time next April.
So you might want to withdraw only a PORTION of the money in there, and either buy I-bonds or Treasury bills, depending on your time horizon.
