Swapping I-Bonds for T-Bills and TIPS
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- Опубліковано 28 вер 2024
- Be sure to see: • How to Buy Treasuries ...
For more on how I'm buying Treasuries in my three-bucket strategy!
On September 1, 2023, I began to redeem I-Bonds. Easier said than done!
I also have been rolling over short T-Bills for longer Treasuries and TIPS. Follow along.
In addition to my own spreadsheet based on TreasuryDirect's secret formula, I check out two easier ways to find out what you could expect when you redeem your I-Bond.
Check out following links:
eyebonds.info/...
eworkpaper.com...
drive.google.c...
Sounds like a good plan. I also only hold both individual tips and inflation protection bond funds in my IRA. I bought some 30 year tips at auction with a 2.25% rate and they have increased in value nicely.
Can you find the monthly rate/earnings on the treasury direct website OR only the spreadsheet that you made?
If you track the current redemption values, the difference will be monthly interest earned. But spreadsheet’s calculations are surest way to figure out why they come up with their values. See the video on secret formula in my playlist.
Don't have any tips but I have t bills in spades. Have sofi high yield paying 4.5 as my central account money market accounts in schwab iras I think around 5 ish and t bills a lil over 5%. Have ibonds but not sure if I I will keep them there. Trying latter method with 4k and if I like it I may make it more lik 10 t 20k ish.
See my playlist on ways to gift I-bonds. Thanks for watching!
TLT is over priced , the us 10yr. yield of 4.8 puts TLT at a fair value of $75.00 . The TLT ETF X divend on Oct 2nd yielded 3.36 for 12 mo..At a price of $75.00 the yield will be 4.80 , that would be in line with a fair yield for the bonds in the ETF. please comment about the yield and how much people are paying for the convenience of buying US Treasures in TLT
I am buying Treasuries directly when I can. And I am staying less than 10 years duration for Bucket 1 and 2. I’m not trying to outperform the market with these assets but instead protect them.
Treasury Direct says that it takes 2 BUSINESS DAYS, NOT Calendar Days, after the request to redeem I Bonds. Weekend and Federal Holiday days are not business days.
The first business day after your redemption request on Friday, Sept 1, was Tuesday, Sept 5, and the redemption was completed on the second business day after your redemption request, which was Wednesday, Sept 6, just as stated by Treasury Direct.
True. I did note my bank had it that evening.
A few benefits of I bonds vs tips
1. Interest on I bonds is tax deferred whereas with tips you pay tax annually on both the interest payment and the computed increase in value even though you won’t recognize that until maturity or when you sell
2. I bonds combined rate can never go below zero whereas tips rate will be negative if we have deflation.
3. Interest rate risk. If you need to sell your tips before maturity you may lose money if interest rates have risen thus making the interest rate on your bond less attractive vs newly issued bonds.
4. I bonds can be tax free if used for higher education (with certain caveats).
I hold I Bonds in taxable TreasuryDirect account. I hold TIPS in my tax-deferred accounts, to eliminate complexity of yearly taxes. Everything is ordinary income when it comes out. I also have intermediate and short-term TIPS. Nothing over 10 years. Stocks are better inflation protection for periods greater than 10 years.
Love your videos bc you show actual numbers! Be careful about Fridays and 3 day weekends - there's always lots of maintenance on govt websites on holiday weekends. Before you redeem, TD shows what you will get when you redeem, they already subtract out your 90 days of lost interest. I redeemed my I bond that I bought in December 2021 on 9/7, and saw it in deposited my Truist checking acct as pending om 9/8. I'm moving the funds into a callable 6% agency bond via Fidelity that matures in 2028, exempt from state and local taxes - remember I live in the tax hell called Maryland. The benefit risk balances out for me. If the bond gets called before maturity, I still earn 6% between settlement and maturity and bc of my age and retirement plans, I'm not comfortable going out any further. I do, however, wish I understood better how to compare the difference between earning son Agency bonds that are continuously callable and those that are callable at quarterly or semi annual call dates. All are par calls and I believe that is really important. Interested to know what you think. Thanks
Thank you for watching! I’m only using treasuries and cds right now. I try to stick with non callable in a ladder.
Thank you for watching! I’m only using treasuries and cds right now. I try to stick with non callable in a ladder.
Thanks, Jim, excellent video!
Thanks, David! Curious, where are you on the inverted yield curve and when to lock in the intermediate Treasuries? I don't think I'm in the market for a 30-year bond anymore, but 2-10yrs seem to be, while lower than short-term bills, at great long-term rates.
@@IwasRetired Most of our bonds are in an intermediate bond index with a smaller amount in a short-term bond index for the portion of our spending for the next few years.
I was having a hard time logging in as well.
At least the transaction went through! I'm hoping December redemptions go a little smoother!
Good investing job! 👍 🙏 I learned a lot!
Thanks for watching!