I am retired and 73 years old, where can you park

[progree]

27. Odd the EE savings bonds suck so much (these are the ones without the inflation adjust)

Last edited Fri May 21, 2021, 01:13 PM - Edit history (2)

I found this on EE savings bonds:

If I buy an EE bond now, what interest will it earn? The interest rate for a bond bought from May 2021 through October 2021 is an annual rate of 0.10%. Regardless of the rate, at 20 years the bond will be worth twice what you pay for it. If you keep the bond that long, we make a one-time adjustment then to fulfill this guarantee. Learn more on Interest Rates – Current and Past

MAXIMUM PURCHASE: $10,000 each calendar year for each Social Security Number.
MORE: https://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eeratesandterms_eebondsissued052005andafer.htm

So two very big bummers: 0.10% interest rate unless you hold it for 20 years. Then yes, it guarantees that one will get double back, which works out to a 3.526% annualized rate of return. Otherwise, peanuts.

1.03526^20 = 2.0 (a doubling over 20 years)

And then one is limited to purchasing $10,000/year, so somebody looking to invest a reasonable retirement nest egg will have to look elsewhere (according to Fidelity, a 65 year old couple can expect to pay an average of $300,000 out of pocket over their lifetimes, including on Medicare premiums).

I'm still trying to figure out the I bonds (the ones with the inflation adjust) and if one has to hold them for decades to get the 3.54% interest rate. I haven't been able to find a clear answer to that at the Treasury site, but doing a Google, it kind of seems my suspicion is right,.

I bonds at a glance: https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

Series I Savings Bonds Rates & Terms: Calculating Interest Rates: https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm

Edited to add 1:04 PM ET -

This one makes the I-bond look like the real deal.
https://www.depositaccounts.com/blog/inflation-treasury-series-i-savings-bonds/

They:

Can't be redeemed within 12 months of issue date

Lose 3 months interest if redeemed within 5 years

(but no other holding time requirements other than these that result in losing interest)

But: Maximum purchases per year and per social security number is $10,000 in TreasuryDirect and $5,000 in paper bonds purchased with IRS tax refunds (This excludes trust/business purchases)