Too many variables to give a single answer. You'd need to take into account tax of redeeming an existing one, as you note. And what about what it's earned so far? If you purchased a $10K Ibond, then it's going to be worth more than that today - where does that money go after your redeem it, once taxes are paid? Spend it? Or would you plow it back into a future Ibond purchase?I have a similar question, but iny case I'm in a high tax bracket. So it's it worth it to sell my 0% I bonds and buy new ones to get s better rate when I'll be paying taxes on the interest from the ones I'm selling?
Once you have that info, then you can look at the value of a newly purchased I-bond over time and compare that with your existing I-bond to determine when (or if) there is a crossover where the new Ibond with a 1.3% fixed rate has a value greater than staying with your existing Ibond.
In my case, I had one Ibond where the crossover was very close to the maturity date, but a couple of other Ibonds where the crossover is just a few years down the road. Generally, the later you purchased the Ibond you're considering redeeming, the sooner the crossover date will be.
Then you start to have other considerations - in my case I'm trying to watch my MAGI for ACA premium tax credits, so I need to pay attention to anything that might cause a taxable event and increase my MAGI and give me a surprise tax bill.
I'm actually surprised that nobody has created a spreadsheet for this and put it out on the internet somewhere.
Cheers.
Statistics: Posted by dcabler — Tue Feb 20, 2024 4:54 am — Replies 8 — Views 881