The Wall Street Journal recently highlighted an often-overlooked low-risk investment that’s getting more attention with the current increase in inflation: the Series I savings bond, also known as inflation or I bonds. Sheila weighed in on this strategy, offering advice on how to maximize your I bond benefit:
“I bonds are meant to be savings tools,” says Sheila Padden, a certified financial planner and CEO of Padden Financial Planning LLC in Chicago. “They fill a gap in a portion of one’s fixed-income portfolio. They are great for emergency funds and are also good for retirees or near-retirees as a bond ladder to supplement guaranteed income.”
To maximize I bondholdings, Ms. Padden advises her clients to open multiple accounts on TreasuryDirect. As she explains, “A couple can open an individual account for each spouse, an account for an LLC or S Corp. if they own a business, and an account for a revocable living trust. That brings the total to $40,000” a year, she says. “Those holdings can be increased to $45,000 if a couple filing jointly buys another $5,000 of I bonds with their IRS income tax refund in 2022.”
The print edition of the WSJ also featured this article, but an extended version is available here (PDF).
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