News & INSIGHTS

Patrick’s Planning Post

Series I Savings Bonds

Recently, there has been a lot of buzz around I-Bonds, formally known as “Series I Savings Bonds.” And for good reason – their interest rates are linked to inflation (currently
at a 40-year high) and they are guaranteed by the U.S. Government. A few weeks ago, the U.S. Treasury announced that the new annualized rate on Series I Bonds from May
through October would be 9.62%. Not too shabby. Let’s take a look at the ins and outs, pros and cons of Series I Bonds.
The Good, The Bad, The Ugly:

• The interest rate is reset every six months based on a formula tied to inflation
• That means the annualized 9.62% rate above is guaranteed for six months and six months only before it will reset again (you are guaranteed half of 9.62% since it’s an annualized rate)
• An individual can only electronically purchase $10,000 worth of I Bonds in a calendar year, and the transaction must be done through Treasurydirect.gov
• An individual can purchase an additional $5,000 worth of I bonds in paper form in the same calendar year, and the transaction must be done by filing Form 8888 with your tax return
• The bonds cannot be purchased in qualified retirement accounts
• The bonds cannot lose value, meaning your bonds cannot be redeemed for less than what you paid for them
• However, you will have to forfeit interest if you redeem the bonds within five years of purchase
• The minimum holding period for these bonds is one year
• If you redeem the bonds before five years, you will lose the previous three months’ worth of interest
• Interest income is exempt from state and local income taxes

For more on Series I Savings Bonds, check out this article from the WSJ and reach out to
us with additional questions.

Liebmans’ Library

Currently, market opinions are divergent. As a result, for this month, we chose two very different articles. The first article, from the Wall Street Journal, reflects a fairly negative outlook on the markets and the economy. The second article highlights that Warren Buffett – arguably the greatest living investor – is using this weakness to add to equities, in particular energy stocks. While the outlook of the first author and Warren Buffett may be different, they reflect our view that even if the short-term economic and market picture is subpar, we need to focus on maintaining discipline and looking for long-term opportunities.

Aaron’s Action Items

15 Ways Consumers Can Deal With – And Even Benefit From – Rising Inflation

Inflation. Not the first time you have heard this word come up in the last few months, right? Because this topic has become so prevalent, we think it is important to think about how inflation might impact your daily lives and even ways to take advantage of it. For this month’s action item, I would suggest looking at the attached article for specific actions you can take in this environment. For me, it’s considering buying out my car lease.