I Bonds Mega Thread (I Bond Heads Rejoice!)

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SmileyFace
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Re: iBonds fixed rate 0.4%

Post by SmileyFace »

protagonist wrote: Fri Nov 18, 2022 11:12 am
SmileyFace wrote: Wed Nov 02, 2022 7:14 am Of course with millions invested - as many bogleheads have - the ER differences could approach something meaningful - but with the $10,000 per account limit for ibonds it's a different story.

"Meaning" is relative.
$1M is about as meaningful to a billionaire as $1000 is to a millionaire or $1 is to someone with $1000 of assets.
The bottom line is the ER differences you mentioned are pretty meaningless to everybody.
Sure. But if you have $3M invested - a 0.05% difference in ER for your mutual fund will be more meaningful than 0.4% difference on a $10K ibond. That was my point - folks with money are getting excited about the 0.4% fixed rate even though it only applies to what may be a relatively small amount of money compared to their other assets.
case_of_ennui
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by case_of_ennui »

Are folks with $ put aside for the purchase their 2023 I-Bonds making the purchase ASAP in January? Or waiting until May to see if there is another increase to the fixed rate?
protagonist
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Re: iBonds fixed rate 0.4%

Post by protagonist »

SmileyFace wrote: Fri Nov 18, 2022 11:40 am
protagonist wrote: Fri Nov 18, 2022 11:12 am
SmileyFace wrote: Wed Nov 02, 2022 7:14 am Of course with millions invested - as many bogleheads have - the ER differences could approach something meaningful - but with the $10,000 per account limit for ibonds it's a different story.

"Meaning" is relative.
$1M is about as meaningful to a billionaire as $1000 is to a millionaire or $1 is to someone with $1000 of assets.
The bottom line is the ER differences you mentioned are pretty meaningless to everybody.
Sure. But if you have $3M invested - a 0.05% difference in ER for your mutual fund will be more meaningful than 0.4% difference on a $10K ibond. That was my point - folks with money are getting excited about the 0.4% fixed rate even though it only applies to what may be a relatively small amount of money compared to their other assets.
Ah, I get your point. I agree. Sorry.
Tdubs
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Tdubs »

case_of_ennui wrote: Fri Nov 18, 2022 11:50 am Are folks with $ put aside for the purchase their 2023 I-Bonds making the purchase ASAP in January? Or waiting until May to see if there is another increase to the fixed rate?
How do you know there will be another increase? And, do you want to lose 4-5 months of interest while you wait to find out?
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by case_of_ennui »

Tdubs wrote: Fri Nov 18, 2022 12:30 pm
case_of_ennui wrote: Fri Nov 18, 2022 11:50 am Are folks with $ put aside for the purchase their 2023 I-Bonds making the purchase ASAP in January? Or waiting until May to see if there is another increase to the fixed rate?
How do you know there will be another increase? And, do you want to lose 4-5 months of interest while you wait to find out?
I don't know if there will be another rate increase. Last year some posters here were saying they didn't expect the fixed rate to ever be raised above 0% again, yet here we are. I plan to hold these long term. If there is a rate increase then it's possible I would want to lose out on 4-5 months of interest. It would depend on how the math works out. The 20 years with a potentially higher fixed component could be more valuable than losing those months. This is all why I'm asking.
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Darth Xanadu
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Darth Xanadu »

case_of_ennui wrote: Fri Nov 18, 2022 11:50 am Are folks with $ put aside for the purchase their 2023 I-Bonds making the purchase ASAP in January? Or waiting until May to see if there is another increase to the fixed rate?
I will be purchasing my 2023 bonds as soon as I have the cash available, and my goal is to purchase before May. I plan to hold these long-term. I don't know what will happen later in the year, and the current rates are sufficient for me.

Edit to add: I've purchased every year since 2018. My fixed rates are 0.0%, 0.0%, 0.2%, 0.3% and 0.5%
chem6022
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by chem6022 »

case_of_ennui wrote: Fri Nov 18, 2022 11:50 am Are folks with $ put aside for the purchase their 2023 I-Bonds making the purchase ASAP in January? Or waiting until May to see if there is another increase to the fixed rate?
I'm waiting until at least May and possibly until November for 2023. If 5-10 year TIPS real yields hold then my own read of past rate moves suggest there is a good chance for the fixed rate to go above 1% by April. To be honest if the fixed rate doesn't rise enough I might not buy I-bonds in 2023 at all, as they are not looking very competitive at the moment.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by AlmstRtrd »

chem6022 wrote: Sat Nov 19, 2022 5:45 am
case_of_ennui wrote: Fri Nov 18, 2022 11:50 am Are folks with $ put aside for the purchase their 2023 I-Bonds making the purchase ASAP in January? Or waiting until May to see if there is another increase to the fixed rate?
I'm waiting until at least May and possibly until November for 2023. If 5-10 year TIPS real yields hold then my own read of past rate moves suggest there is a good chance for the fixed rate to go above 1% by April. To be honest if the fixed rate doesn't rise enough I might not buy I-bonds in 2023 at all, as they are not looking very competitive at the moment.
It's also within the realm of possibility that both the fixed rate and the inflation rate could be lower on 5/1/23. Maybe invest $5,000 in January and another $5,000 in May. If it's I-Bonds you want for sure, this way you'll at least get it half right.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by alluringreality »

chem6022 wrote: Sat Nov 19, 2022 5:45 am If 5-10 year TIPS real yields hold then my own read of past rate moves suggest there is a good chance for the fixed rate to go above 1% by April. To be honest if the fixed rate doesn't rise enough I might not buy I-bonds in 2023 at all, as they are not looking very competitive at the moment.
I tend to agree that the fixed rate does not look special in comparison to current market rates, so I'll probably wait to see the 6 month inflation rate in April. The main reason to buy January-April may remain the $0.86 payment on $25 for past inflation, rather than any longer-term consideration. I tend to expect that real rates would have to go much higher for the fixed rate to exceed 1% on the next increase, since the largest 0.7% increase was November 2008, when the recession had the 5 year TIPS over 3.6%. That looks like more than double Friday's 5 year rate, so I figure even expecting another 0.4% increase might be fairly ambitious at this time.
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batangueno
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by batangueno »

Sorry if the previous 87 pages were just too much to scan but I have a question please:

I've been buying I-bonds starting this year. I plan to report my interest income when I redeem in the future. In the meantime, will I be receiving a 1099 to report even if there are no redemption(s) like for this year? Thanks.

-Bat
jj
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by jj »

batangueno wrote: Sat Nov 19, 2022 5:29 pm Sorry if the previous 87 pages were just too much to scan but I have a question please:

I've been buying I-bonds starting this year. I plan to report my interest income when I redeem in the future. In the meantime, will I be receiving a 1099 to report even if there are no redemption(s) like for this year? Thanks.

-Bat
There is no 1099 unless you redeem an I bond.
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batangueno
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by batangueno »

Thanks, jj.

-Bat
SnowBog
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by SnowBog »

jj wrote: Sat Nov 19, 2022 5:37 pm
batangueno wrote: Sat Nov 19, 2022 5:29 pm Sorry if the previous 87 pages were just too much to scan but I have a question please:

I've been buying I-bonds starting this year. I plan to report my interest income when I redeem in the future. In the meantime, will I be receiving a 1099 to report even if there are no redemption(s) like for this year? Thanks.

-Bat
There is no 1099 unless you redeem an I bond.
For clarity, you won't ever receive a 1099, as in they do not mail you one (or send you a digital copy).

You'll need to login to your account(s) and find the 1099 yourself. But as noted, one is only generated if you redeemed bonds during the year.
batangueno
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by batangueno »

Thanks for clarifying, Snowbog. Now it is crystal clear to me specially the part where I have to go into the account and pull the 1099.

-Bat
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mel Lindauer »

Just to clarify for those who redeem paper I Bonds at their local bank, you will get a 1099 mailed to you at year's end.
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JimmyD
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by JimmyD »

case_of_ennui wrote: Fri Nov 18, 2022 11:50 am Are folks with $ put aside for the purchase their 2023 I-Bonds making the purchase ASAP in January? Or waiting until May to see if there is another increase to the fixed rate?
Doubt we'll be purchasing any next year. Inflation is making things tough on us from both a cost of living standpoint and as of 2023, we'll have an additional $5,000 of tax advantaged space to invest in, so we'll be pretty close to tapped out at that point. Anything extra will likely go into equities in our taxable brokerage account.

I'm ok just keeping half our emergency fund in I Bonds for now.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by bismarck23 »

Is there a consensus on whether I-Bonds are worth buying again in 2023? I will be able to buy up to $40,000 (self, spouse, business, trust) in Jan 2023 and will have the cash available. I've read several places that TIPS are looking better than I-Bonds right now. But, I will be fully contributing to all tax-protected space in 2023 so the $40k would not add to that space if I don't buy I-Bonds with it. I currently treat the I-Bonds as part of my bond allocation in my AA (75 stock/15 bond/10 RE).
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Richard1580 »

We loaded up on I-bonds last year and this year - including gift bonds for 2023-2025. However, with TIPS offering real yields of 1.6% to 2.6% I doubt we will add any more I-bonds in the foreseeable future. The October auction of 5-year TIPS with a coupon of 1.625% was an eye opener. That was our first step in creating a ladder of 5-year TIPS in a tIRA. Already looking forward to the December reopening auction.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by evelynmanley »

bismarck23 wrote: Mon Nov 21, 2022 6:05 pm Is there a consensus on whether I-Bonds are worth buying again in 2023? I will be able to buy up to $40,000 (self, spouse, business, trust) in Jan 2023 and will have the cash available. I've read several places that TIPS are looking better than I-Bonds right now. But, I will be fully contributing to all tax-protected space in 2023 so the $40k would not add to that space if I don't buy I-Bonds with it. I currently treat the I-Bonds as part of my bond allocation in my AA (75 stock/15 bond/10 RE).
Another great article from David Enna:

I Bonds vs. TIPS: Right now, it’s clearly ‘advantage TIPS’

Posted on November 20, 2022 by Tipswatch
Despite the I Bond’s appeal, investors shouldn’t ignore the sizable yield advantage for TIPS.
By David Enna, Tipswatch.com


https://tipswatch.com/2022/11/20/i-bond ... tage-tips/
calwatch
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by calwatch »

bismarck23 wrote: Mon Nov 21, 2022 6:05 pm Is there a consensus on whether I-Bonds are worth buying again in 2023? I will be able to buy up to $40,000 (self, spouse, business, trust) in Jan 2023 and will have the cash available. I've read several places that TIPS are looking better than I-Bonds right now. But, I will be fully contributing to all tax-protected space in 2023 so the $40k would not add to that space if I don't buy I-Bonds with it. I currently treat the I-Bonds as part of my bond allocation in my AA (75 stock/15 bond/10 RE).
They are a good deal and even better with a non zero fixed rate, but I am planning to wait until April as I have debt that has about the same interest rate as the I Bond is currently paying now. Then I can see what the next period inflation will be and make a determination then.
newpup
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I bonds and purchase limits

Post by newpup »

[Thread merged into here --admin LadyGeek]

Hi all-
Quick question about purchase limits on I bonds.
Parents A and B, kids x, y, and little z.

For joint ownership, can one purchase
Ax, Ay, and Az $10,000 as well as
Bx, By, and Bz $10,000?

I don't think this works, but not sure how limits apply with joint ownership. Is it just $10,000 total per social security number per year regardless of joint ownership? In that case, it seems that if you are trying to maximize purchase, joint ownership may not be the best vehicle.

Thanks in advance.
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Re: I bonds and purchase limits

Post by Tier1Capital »

You can purchase $10,000 for everyone in your situation. X, y, and little z are the owners for their bonds. The actual registration for their bonds will be...

Minor Child (SSN)
POD
Parent (SSN)
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by LadyGeek »

I merged newpup's thread into the ongoing discussion.

(Thanks to the member who reported the post and provided a link to this thread.)
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newpup
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Re: I bonds and purchase limits

Post by newpup »

Tier1Capital wrote: Thu Nov 24, 2022 2:11 pm You can purchase $10,000 for everyone in your situation. X, y, and little z are the owners for their bonds. The actual registration for their bonds will be...

Minor Child (SSN)
POD
Parent (SSN)
Sorry to be daft- is it still capped at $10,000 per SS # regardless of joint registration? I.e. could x, y, and z be registered once with parent A and similarly with parent B? My concern is that if capped as such, we could only do $3333 per x, y, and z with each parent, which only gets the kids to $6666 each.
Thanks.
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Richard1580
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Richard1580 »

$10,000 per SS# per calendar year. It does not matter who gifts the bond, each SS# can only take delivery of $10K per calendar year.
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Tier1Capital
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Re: I bonds and purchase limits

Post by Tier1Capital »

newpup wrote: Thu Nov 24, 2022 2:32 pm
Tier1Capital wrote: Thu Nov 24, 2022 2:11 pm You can purchase $10,000 for everyone in your situation. X, y, and little z are the owners for their bonds. The actual registration for their bonds will be...

Minor Child (SSN)
POD
Parent (SSN)
Sorry to be daft- is it still capped at $10,000 per SS # regardless of joint registration? I.e. could x, y, and z be registered once with parent A and similarly with parent B? My concern is that if capped as such, we could only do $3333 per x, y, and z with each parent, which only gets the kids to $6666 each.
Thanks.
It's the primary owner/SSN that matters. In your situation you can purchase $10,000 for everyone, so $50,000 per year assuming your children are minors.
Iorek
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Re: I bonds and purchase limits

Post by Iorek »

Tier1Capital wrote: Thu Nov 24, 2022 3:12 pm
newpup wrote: Thu Nov 24, 2022 2:32 pm
Tier1Capital wrote: Thu Nov 24, 2022 2:11 pm You can purchase $10,000 for everyone in your situation. X, y, and little z are the owners for their bonds. The actual registration for their bonds will be...

Minor Child (SSN)
POD
Parent (SSN)
Sorry to be daft- is it still capped at $10,000 per SS # regardless of joint registration? I.e. could x, y, and z be registered once with parent A and similarly with parent B? My concern is that if capped as such, we could only do $3333 per x, y, and z with each parent, which only gets the kids to $6666 each.
Thanks.
It's the primary owner/SSN that matters. In your situation you can purchase $10,000 for everyone, so $50,000 per year assuming your children are minors.
But just to be extra clear, you won’t be a “joint owner” with your kids on their bonds. They will be the owners of them and you will be a custodian and maybe a beneficiary (so, for example, when they turn 18 you will lose the ability to redeem their bonds).
Tom_T
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Tom_T »

Apologies if this question has already come up, but this thread is SO long now that it's hard to find specific issues.

If a $10K I Bond is delivered to me in January 2023, I've met my 2023 limit. Understood. But... if I were to then sell it, could I then buy $10K later in the year? Is the $10K limit gross or net, in other words?
evelynmanley
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Re: I bonds and purchase limits

Post by evelynmanley »

newpup wrote: Thu Nov 24, 2022 1:41 pm [Thread merged into here --admin LadyGeek]

Hi all-
Quick question about purchase limits on I bonds.
Parents A and B, kids x, y, and little z.

For joint ownership, can one purchase
Ax, Ay, and Az $10,000 as well as
Bx, By, and Bz $10,000?

I don't think this works, but not sure how limits apply with joint ownership. Is it just $10,000 total per social security number per year regardless of joint ownership? In that case, it seems that if you are trying to maximize purchase, joint ownership may not be the best vehicle.

Thanks in advance.

Good resources from Harry Sit:

https://thefinancebuff.com/buy-i-bonds-as-gift.html

https://thefinancebuff.com/buy-i-bonds-kids-name.html
alluringreality
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by alluringreality »

Tom_T wrote: Fri Nov 25, 2022 7:20 am Is the $10K limit gross or net, in other words?
My understanding is that it amounts to a gross purchase limit, rather than net. Basically such a setup tends to work against actions like trading for higher fixed rates. If the limit was net, the gifting option might tend towards unlimited yearly purchases and withdrawals.
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