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What are Series I Savings Bonds?

By Kevin Janiec, CFP®, MBA

You have likely heard plenty about the current inflation environment.

However, you might not have heard much about Series I Savings Bonds (I bonds). 

Here’s a timely FYI on what I Bonds are and how they work:

  1. I bonds are inflation-protected, interest-bearing savings instruments that are purchased directly through the US Treasury.
  2. The yield is calculated and compounded semi-annually in May and November based on a fixed rate and inflation metric (CPI).  Current rates on these vehicles are available at TreasuryDirect.gov.
  3. There is a $10,000 purchase limit per person (children included) in each household on an annual basis. These investments can be purchased through an individual account at Treasurydirect.gov.
  4. They have a 1-year mandatory holding period. To redeem these bonds in less than 5 years, you pay a penalty of the previous 3 months’ interest. After 5 years, you can redeem the bonds penalty-free.
  5. You cannot purchase these investments within an IRA, 401(k), or joint account. 

Additional Frequently Asked Questions are available at TreasuryDirect.gov.

If you’re a client, we can discuss Series I Bonds further as we meet in the near future.  Otherwise, if you have any questions, don’t hesitate to give us a call.


Investment Advice offered through FC Advisory LLC, a registered investment adviser doing business as “New Wealth Project” and as “Financial Coach”.  This content is provided for informational purposes only.  Views and opinions expressed are those of the authors and do not necessarily reflect those of FC Advisory, LLC.  Information provided is not and should not be interpreted as investment, tax, legal, or other professional advice or recommendation by FC Advisory, LLC or the members of our firm.  Always consult the appropriate professional regarding your specific situation before implementing any options presented or inferred.  FC Advisory LLC, All rights reserved.

This content may contain hyperlinks to external websites which are owned and operated by non-affiliated third parties. If you use these hyperlinks you will leave our website; we bear no responsibility for the accuracy, legality, or content of these external sites or for that of subsequent links. No warranties or representations are being made about linked websites, the third parties they are owned and operated by, the information contained on them, the accuracy, completeness, or timeliness of their content, or the suitability or quality of any of their products or services.

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Q1 2022

Quote:

“There’s magic in breaking down big, hard, scary goals into attainable pieces.  ‘What’s the next smallest thing I can do?’  That’s the question you’re trying to answer.” 

– Carl Richards, author of The Behavior Gap 

Book

As leaders in your families and communities, if you’re a rigorous thinker and you’re not satisfied with the status quo, you’re likely on a constant pursuit of excellence.  This new book by Ryan Hawk compiles great stories, scientific evidence, and practical application of ways that we can all pursue our own version of excellence in life.  I highly recommend reading, listening, or gifting it to someone who comes to mind. 


Story

When my father-in-law recently began substitute teaching, my family was a bit nervous for him… Until he received a letter one day from a 7th grade Math Class.  Read the full story here.

Article

The War in Ukraine has inspired increased charitable giving from around the globe.

Whether you’re feeling inclined to donate to these humanitarian efforts, or support a separate cause, it never hurts to assess the tax implications of your donation.  There are ways to optimize the financial benefits of giving to certain organizations.  This article and the following tool might be useful to ensure you’re giving to a qualified organization that allows you to utilize certain tax-efficient strategies. 

Reach out if you have any questions.

Tax-Deductible Ways Of Giving For Ukraine (forbes.com) / Results for Tax Exempt Organization Search (irs.gov)


Video


This content contains hyperlinks to external websites which are owned and operated by non-affiliated third parties. If you use these hyperlinks you will leave our website; we bear no responsibility for the accuracy, legality, or content of these external sites or for that of subsequent links. No warranties or representations are being made about linked websites, the third parties they are owned and operated by, the information contained on them, the accuracy, completeness, or timeliness of their content, or the suitability or quality of any of their products or services.

This content is provided for informational purposes only. Views and opinions expressed are those of the authors and do not necessarily reflect those of FC Advisory, LLC. Information provided is not and should not be interpreted as investment, tax, legal, or other professional advice or recommendation by FC Advisory, LLC or the members of our firm. Always consult the appropriate professional regarding your specific situation before implementing any options presented or inferred.

Investment Advice offered through FC Advisory LLC, a registered investment adviser doing business as “New Wealth Project” and as “Financial Coach”.   FC Advisory LLC, All rights reserved.

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3 risks to your retirement savings

By Kevin Janiec CFP®, MBA

You’re in your 60s.  You have more than $1M in your retirement savings.  You’re feeling ready to call it quits. Fantastic! 

But before you put in your “two weeks” notice, consider three factors that might make your nest egg less valuable than you think:

Inflation: Inflation has all of our attention right now. But whether inflation persists as rampant as it is this year or as light as it was in the preceding decade, this invisible force is inevitably going to increase the cost of living throughout your retirement.  Your retirement nest egg is not likely prepared to afford your future needs if it doesn’t keep growing. It’s essential to keep a significant portion of your money invested to outpace the continuous increase in prices.

Taxes: A meaningful percentage of your retirement savings could ultimately be shared with the IRS. It’s important to be aware of the tax implications of your accounts and prepare your income plan accordingly. If your retirement savings are primarily located in a 401(k) or Traditional IRA, you’ve done a nice job taking advantage of tax-benefits over the years as you grew these accounts.  However, this is when Uncle Sam becomes a significant business partner of yours.  Maybe you have a large portion of your savings in taxable non-retirement accounts. Even here, you’ll also likely be subject to capital gains taxes when using this money.  Having tax-efficient income sources will be key to stretching the longevity of your savings. 

Sequence of returns: In the early years of retirement, the market returns of the portfolio that you are drawing from are critically important.  Even if the market does well in later years, big losses early in the withdrawal period can significantly increase your chances of running through your savings.  The investing strategy that got you to this point as an “Accumulator” could be detrimental with poor timing as you become a “de-cumulator.”  Bucket your savings accordingly and draw from your money thoughtfully. 

Unfortunately, retirees have no control over any of these three factors. 

Fortunately, all of these factors can be effectively prepared for. 

First, gain awareness of these risks. ☒

Then, seek guidance to customize the timing, source, and sequence of your “retirement paycheck” strategy.

It will make a considerable difference on the retirement lifestyle that you can afford. Most importantly, a thoughtful withdrawal strategy will increase the sustainability of your wealth. 

We’ll dive into each of these factors in future blog posts. Reach out if you would like to discuss how each of these risks impacts you specifically. 

Hear our team talk about the challenges of oversimplifying retirement income. Check out this brief “Coaches Corner” segment of the Untucked Podcast.


Investment Advice offered through FC Advisory LLC, a registered investment adviser doing business as “New Wealth Project” and as “Financial Coach”.  This content is provided for informational purposes only.  Views and opinions expressed are those of the authors and do not necessarily reflect those of FC Advisory, LLC.  Information provided is not and should not be interpreted as investment, tax, legal, or other professional advice or recommendation by FC Advisory, LLC or the members of our firm.  Always consult the appropriate professional regarding your specific situation before implementing any options presented or inferred.  FC Advisory LLC, All rights reserved.

This content may contain hyperlinks to external websites which are owned and operated by non-affiliated third parties. If you use these hyperlinks you will leave our website; we bear no responsibility for the accuracy, legality, or content of these external sites or for that of subsequent links. No warranties or representations are being made about linked websites, the third parties they are owned and operated by, the information contained on them, the accuracy, completeness, or timeliness of their content, or the suitability or quality of any of their products or services.