No. of Recommendations: 2
I-series savings bonds are not “bonds” as such. They’re tax-deferred, deliver a bit above official inflation. A good spot for an emergency fund. And can be used tax-free for education expenses. We will be cashing some in later for the kid’s school when her 529 expires.
I still own some old I-bonds from the halcyon days of 3%+ real returns. They will all mature in 2030-2032 if I recall. I would use them for [grand]children's education, but my AGI in those years is very likely to be too high. Even just $20k of I-bonds purchased in 2001 will probably be worth something like $60k+ in 2032, so just by virtue of maturing, it'll add a substantial amount to MAGI which makes it almost impossible to qualify for tax-free treatment. I will investigate taking the bulk of the gain a year or two earlier (you can choose to pay tax on I-bond interest as it accrues), but I suspect that too may not be worth doing because it'll only leave a very small amount remaining to be tax-free for education. Or maybe there will be a way to shrink income in those years, but every time I attempt to do that, something pops up to prevent it.
