This blog has moved. Click here to go to the new blog.

Savings-Bonds-Alert: Dealing with final maturity without HH bonds

Tuesday, August 31, 2004

Dealing with final maturity without HH bonds

I must make a decision about what to do with my Savings Bonds. I have been converting them into HH Bonds as they mature since we are retired. The interest has been handy each month but I find that it hasn't been a great idea since the end of 2002 because of the low 1.5% rate. I am at a loss what to do with some bonds that will reach final maturity from August until December this year and must make a decision. Tom's response Now that the Treasury's has stopped issuing new HH bonds, you have no alternative but to redeem your E and EE bonds when they mature and stop earning interest. You can, of course, reinvest the money in new Savings Bonds. If you reinvest online at TreasuryDirect, you can make partial withdrawals after one year, which gives you a way to get the interest you earn in cash as with HH bonds. We have lots of information about TreasuryDirect on our web site. Since you're already retired, your tax rate probably isn't going to ever get any lower than it is now, so paying the tax on the E and EE bonds as they mature is the best tax deal you're ever going to get. Just make sure you save back some of the money you get when you redeem the bonds to pay the taxes on them. Don't reinvest the total amount. If you're not sure how much to hold back, consult with whoever does your taxes for you.


Post a Comment