EE Bonds

Financial Planning - Financial planning in general. (Moderated) 

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Subject Author Date EE Bonds Default User 11-06-2007  Re: EE Bonds Elle 11-08-2007  Re: EE Bonds Elle 11-08-2007  Re: EE Bonds Default User 11-08-2007  Re: EE Bonds Default User 11-08-2007
Posted by Default User on November 6, 2007, 8:50 pm When I first started working at my job, I got signed up for payroll deduction into EE bonds. I stopped that after some years. The earliest ones will start maturing in 2011. Right now, these bonds would represent a small portion of my overall bond exposure, about 2.5% of what I have projected for bonds. Should I keep these or cash in now? Brian -- If televison's a babysitter, the Internet is a drunk librarian who won't shut up. -- Dorothy Gambrell (http://catandgirl.com) Posted by Elle on November 8, 2007, 5:29 pm What is the issue date on the bonds coming due? Some of your bonds may be paying a minimum of 7.5% right now. See http://treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eeratesandterms_eebondsissuedbefore051995.htm No high grade (= low risk) bond fund right now is paying 7.5%... hence any EE bond you have paying this rate should be held to maturity. The home page of the site above has links to other helpful info on this. > When I first started working at my job, I got signed up > for payroll > deduction into EE bonds. I stopped that after some years. > The earliest > ones will start maturing in 2011. > > Right now, these bonds would represent a small portion of > my overall > bond exposure, about 2.5% of what I have projected for > bonds. > > Should I keep these or cash in now? Posted by Elle on November 8, 2007, 5:45 pm > No high grade (= low risk) bond fund right now is paying > 7.5%... hence any EE bond you have paying this rate should > be held to maturity. Oops, the minimum likely expired. It's a tad complicated. See the site above and sites like http://www.savings-bond-advisor.com/series-ee-savings-bond-interest-rates/ . They suggest your EE bonds are paying closer to 4% now. Whether to cash in or not is maybe a case of "five will get you ten." Consider that no state tax is due on the interest of EE bonds. (Federal tax will still be owed, though.) I'd say the EE bonds are close enough to mimicking the bonds used in allocation planning. One of the most famous allocation studies (Trinity U.) used investment grade, long term corporate bonds, which should pay better interest than any Treasury. I'd stick with bonds having no more than about a five year maturity, since these historically "optimize" return and are short enough to offer some flexibility. Going out beyond five years does not result in much higher interest rates. Posted by Default User on November 8, 2007, 5:55 pm Elle wrote: > > No high grade (= low risk) bond fund right now is paying 7.5%... > > hence any EE bond you have paying this rate should be held to > > maturity. > > Oops, the minimum likely expired. It's a tad complicated. See the > site above and sites like > http://www.savings-bond-advisor.com/series-ee-savings-bond-interest-ra > tes/ . They suggest your EE bonds are paying closer to 4% now. I downloaded this spreadsheet thing that tells you what the current value and all is. > I'd say the EE bonds are close enough to mimicking the bonds used in > allocation planning. I'll probably just hang on to them then, at least until they begin to mature. Brian Posted by Default User on November 8, 2007, 5:52 pm Elle wrote: > What is the issue date on the bonds coming due? The earliest bonds were purchased in 1981. They are either $50 or $100 EE bonds. Brian Similar Threads Posted Why bonds? March 16, 2007, 8:40 am Bonds February 28, 2008, 9:25 am Bonds vs CDs November 3, 2008, 8:52 pm Understanding Bonds September 25, 2006, 4:59 am Re: Zero Coupon Bonds September 26, 2006, 4:46 pm I bonds, the sequel February 7, 2007, 8:19 pm I bonds, the ugly March 12, 2007, 12:27 pm us bonds and inflation May 21, 2007, 10:28 am Treasury Bonds & AMT October 29, 2007, 9:13 pm savings bonds - EE vs I - July 18, 2008, 1:44 pm