We’re going to be exploring a few different topics that have been popular talking points over the past few months, inflation, I bonds, and much more.
Over the past two or three weeks, many people have heard the news about I bonds and what opportunities are out there. According to a recent Wall Street Journal article, the annual interest payments of 9.6% are drawing in a lot of people.
In the last 6 months, almost $11 billion in I bonds have been issued compared to $1.2 billion during the same period in 2020 and 2021. This boom in popularity is tied to the inflation we are all experiencing.
Bonds are generally safe investments because they are backed by the government. An I bond is a specific type of bond designed to protect your money from inflation.
In essence, you are loaning the government money for a specified rate of return. That rate is determined by a 6-month period. The government sets these rates twice a year. The rate of return is a composite rate of both fixed and inflation-adjusted rates, that’s why they are currently so popular.
However, no product is perfect so we need to analyze the pros, cons, and strings attached to this investment tool. Some of the pros are high returns, no risk of principal loss, and flexible tax benefits. But, you can’t dump all of your money into I bonds. Each person can only purchase up to $10,000 of I bonds annually and they must be purchased through the treasury.
Join us today as we explore this hot topic, the buying process of I bonds, and the pros and cons of this investment vehicle.
Listen to the entire show and use the timestamps below to find specific segments.
[1:31] – What kind of questions are we getting?
[2:22] – Breaking down the I bond news
[4:21] – How should we approach understanding these?
[5:32] – How does the return work?
[7:08] – What are the pros of I bonds?
[8:55] – What are the cons of I bonds?
[12:23] – I bonds must be held for one year
[15:10] – Is this worth it for you?
Thanks for checking out the Your Retirement Elevated Podcast. We’ll talk to you again on the next show.