I am assuming that there has to be more than one person involved to do a gift box? But I'm also seeming to remember that gift boxing does not give you an additional amount in invest in iBonds? That is it is shifting limits around one year to another?barrett wrote: ↑Fri Oct 25, 2024 3:28 amAgain, using TD the calculator, it looks like a $1,000 March of 2021 bond is now worth $1,185 for a gain of 18.5%. CPI-U officially went up 15% during that time so you've made money before taxes. I have some bonds purchased in both 2021 & 2022 to get those good inflation rates while they lasted. But I am holding the $30,000 that I purchased (used the gift box for both me and my wife) as one of our mid-range spending money sources. In my situation, it doesn't make sense from a tax perspective to sell them because I am right at the top of the 12% tax bracket from Roth conversions for 2024 and I don't want to pay 22% in taxes on those bonds. Selling 2021 bonds might be a bit of a complicated calculation depending on your tax situation... as in "How long would I need to collect the 1.3% fixed rate to make up for paying taxes at X% now?"
But your post got me wondering if maybe I should gift box $10,000 of the 1.3% fixed rate bonds to my wife for delivery in January of 2025. And maybe have her do the same for me. Hmm.
iBonds / TreasuryDirect
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Re: iBonds / TreasuryDirect
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
Re: iBonds / TreasuryDirect
"I am assuming that there has to be more than one person involved to do a gift box? But I'm also seeming to remember that gift boxing does not give you an additional amount in invest in iBonds? That is it is shifting limits around one year to another?"
Correct on both accounts, Vinny, with maybe a bit of added nuance to the second point. The gift box strategy can help a couple (for example) accelerate purchases when the terms are favorable. So when the I-Bond variable rate went up to 9.62% on May 1, 2022, a lot of people used the gift box strategy because, even though those I-Bonds had/have a 0% fixed rate, they were briefly a way better fixed-income deal than could be gotten elsewhere.
Also, and I am fairly certain that you know this, the bonds "sitting" in the gift box get the favorable terms when purchased, at least for six months. In the scenario above, one didn't have to wait for "delivery" to get that 9.62%.
Of course, because the purchase limit has gotten so low in today's dollars (meaning the per-person limit keeps going down in real dollars), the only way the gift box could make a material difference to a portfolio over time would be if a couple purchases several years worth when the fixed rate is high.
Correct on both accounts, Vinny, with maybe a bit of added nuance to the second point. The gift box strategy can help a couple (for example) accelerate purchases when the terms are favorable. So when the I-Bond variable rate went up to 9.62% on May 1, 2022, a lot of people used the gift box strategy because, even though those I-Bonds had/have a 0% fixed rate, they were briefly a way better fixed-income deal than could be gotten elsewhere.
Also, and I am fairly certain that you know this, the bonds "sitting" in the gift box get the favorable terms when purchased, at least for six months. In the scenario above, one didn't have to wait for "delivery" to get that 9.62%.
Of course, because the purchase limit has gotten so low in today's dollars (meaning the per-person limit keeps going down in real dollars), the only way the gift box could make a material difference to a portfolio over time would be if a couple purchases several years worth when the fixed rate is high.
Re: iBonds / TreasuryDirect
Thanks for the response. And, no, I did not know that. I don't spend a lot of time learning details of things that don't apply to me, which means that somewhere along the line I had prior known (but, obviously forgot) that the gift box concept does not apply to a single person in terms of increasing the annual limit for a single person.barrett wrote: ↑Sat Oct 26, 2024 7:10 am "I am assuming that there has to be more than one person involved to do a gift box? But I'm also seeming to remember that gift boxing does not give you an additional amount in invest in iBonds? That is it is shifting limits around one year to another?"
Correct on both accounts, Vinny, with maybe a bit of added nuance to the second point. The gift box strategy can help a couple (for example) accelerate purchases when the terms are favorable. So when the I-Bond variable rate went up to 9.62% on May 1, 2022, a lot of people used the gift box strategy because, even though those I-Bonds had/have a 0% fixed rate, they were briefly a way better fixed-income deal than could be gotten elsewhere.
Also, and I am fairly certain that you know this, the bonds "sitting" in the gift box get the favorable terms when purchased, at least for six months. In the scenario above, one didn't have to wait for "delivery" to get that 9.62%.
Of course, because the purchase limit has gotten so low in today's dollars (meaning the per-person limit keeps going down in real dollars), the only way the gift box could make a material difference to a portfolio over time would be if a couple purchases several years worth when the fixed rate is high.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
Re: iBonds / TreasuryDirect
Same for me. For this reason I ignore IRMAA surcharge angst, HSA accounts, mega backdoor Roth discussions and other topics that don't apply to our situation (that is to say, self-employed with decent but not high income, relatively well off but not rich).yankees60 wrote: ↑Sat Oct 26, 2024 7:50 am I don't spend a lot of time learning details of things that don't apply to me, which means that somewhere along the line I had prior known (but, obviously forgot) that the gift box concept does not apply to a single person in terms of increasing the annual limit for a single person.
But I more than make up for that by, for example, obsessing about whether or not my tIRA account balance may push us into a higher tax bracket when RMDs start for me 1/1/31. So I am doing Roth conversions and also keeping more of our bonds (TIPS & Nominal Treasuries) in tIRA accounts and more Stocks in brokerage & Roth accounts. The latter probably only make sense if it can be done while not messing up overall asset allocation.
But I digress.
Re: iBonds / TreasuryDirect
What I think I've seen predicted is that the calculated inflation rate will be lower and the fixed rate will likely be slightly lower
Which sounds reasonable
I bought as much as I could afford already this year
I think the inflation rate lower is a done deal
Who knows what will happen with the fixed rate
Re: iBonds / TreasuryDirect
To maybe help answer Vinny's question, here is David Enna's article from October 10:Dieter wrote: ↑Sat Oct 26, 2024 12:18 pmWhat I think I've seen predicted is that the calculated inflation rate will be lower and the fixed rate will likely be slightly lower
Which sounds reasonable
I bought as much as I could afford already this year
I think the inflation rate lower is a done deal
Who knows what will happen with the fixed rate
https://tipswatch.com/2024/10/10/septem ... e-at-1-90/
He suggests buying in October as he is guessing at a new fixed rate of 1.2%. The new variable rate will be 1.9% based on the April - September CPI-U inflation numbers. Bonds bought by 10/31 will get still get six months of a 4.28% composite rate.
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Re: iBonds / TreasuryDirect
Watch them lower the fixed then rates cook off after Trump wins. Like last time
Re: iBonds / TreasuryDirect
https://tipswatch.com/
It’s going to be a big week for I Bonds
That notice seems to imply you could make an I Bond purchase on Thursday and still get the current 4.28% composite rate. However, when you place an order on TreasuryDirect, it completes on the next business day. So if you purchase I Bonds on October 31, you will “complete your purchase” on November 1, and you will get the new November rate. Do not wait until Thursday if you are making an I Bond purchase and want the current 4.28% composite rate.
It’s going to be a big week for I Bonds
That notice seems to imply you could make an I Bond purchase on Thursday and still get the current 4.28% composite rate. However, when you place an order on TreasuryDirect, it completes on the next business day. So if you purchase I Bonds on October 31, you will “complete your purchase” on November 1, and you will get the new November rate. Do not wait until Thursday if you are making an I Bond purchase and want the current 4.28% composite rate.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: iBonds / TreasuryDirect
Fixed 1.2% Get rekt savers. https://tipswatch.com/2024/10/31/treasu ... s-to-3-11/
Tried to sell a slug of EDV yesterday and maybe Im lucky it didnt go through. Looking like a Trump win is priced in, unlike last time.
Anybody doing leveraged. https://old.reddit.com/r/LETFs/
Tried to sell a slug of EDV yesterday and maybe Im lucky it didnt go through. Looking like a Trump win is priced in, unlike last time.
Anybody doing leveraged. https://old.reddit.com/r/LETFs/
Re: iBonds / TreasuryDirect
Bought my $10,000 for 2024 just at the deadline to get October. Midnight last night.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: iBonds / TreasuryDirect
Nope. My guts can barely handle the non leveraged 30 year.boglerdude wrote: ↑Fri Nov 01, 2024 4:29 am Anybody doing leveraged. https://old.reddit.com/r/LETFs/
Re: iBonds / TreasuryDirect
It was a 50 / 50 decision. This time it worked out.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
Re: iBonds / TreasuryDirect
Long, long, long time ago I used to buy futures contracts .. first in Belgian francs and then in Euros. It was to protect the company. The president and I agreed that half the time we were happy we'd purchased them and half the time we wish we had not. One of the time's that we did was for $1,000,000 contract that was not used by the client. It ended up giving us a $300,000 profit. That contract ended up represented our entire profit for the year. Without that contract we would have just broke even for the entire year.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."