July 12, 2017
Saving up savings bonds? Not sure whether to cash them in or not? Take a moment before making that decision because your financial circumstances could either help or hurt you.
Initially created to fund U.S. military efforts in WWII, savings bonds have been a safe and secure investment for decades. And while they’re not necessarily a wise investment these days (paying as little as one percent interest), many people still have a stash of old bonds.
Without getting into specific series, many bonds mature at 30 years from date of purchase. So the first step is to take a look at what you have by going to Treasury Direct and clicking on the savings bond calculator. There, you can enter your bond number, face value, and date of purchase to determine what it’s worth and if it’s still paying interest.
To that point, we recommend opening an account at Treasury Direct, an online tool offered by the U.S. Department of the Treasury Bureau of the Fiscal Service. You send all of your bonds via certified mail, and they hold them online where you can easily check value, cash in, add a beneficiary, or assign co-ownership.
When you cash in those bonds, the interest earned is considered income affecting three major areas of concern.
To cash or not to cash? Before you reach a conclusion, there are a number of factors to consider: the types of bonds, your specific financial circumstances, and the exact tax ramifications. We’re here to help make the decision process a little easier. Contact us at 4Wealth with any questions or concerns you may have.
About Peter: I am president and Founder of 4Wealth® Financial Group, a CPA and Accredited Investment Fiduciary (AIF), and have over 25 years of experience. I take pride in developing custom solutions for every client, whether it involves tax planning, creating large or small pension programs, or simply offering sage advice that is always in my client’s best interest. I can be found on LinkedIn, Twitter, Facebook, and at (708) 695-5300. | A freelance writer assisted in the preparation of this article.
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