Ask HTM - Prepaid College Plans, Maturing Savings Bonds, & Settling the Roth vs Trad 401k Debate #694

Bond Strategies

Navigating the complexities of maturing savings bonds can be challenging, especially with platforms like TreasuryDirect being less than user-friendly. Matt Altmix highlights that while EE bonds must be held for at least a year, redeeming them after five years avoids penalties, making it a strategic time to cash in 1. Dan from Minnetonka shares his experience of receiving bonds as gifts, now maturing, and questions whether to cash them or let them mature further 2.

Even though Dan, I'm sure he was probably... She got me cool stuff back in the day. Had like, a Davy Crockett coonskin cap. That was awesome.

--- Matt Altmix

Matt suggests that holding onto these bonds beyond maturity may not be beneficial, especially when newer bonds offer lower returns 1.

   

Invest vs. Save

When deciding between investing and saving, it's crucial to align your strategy with your financial goals. Matt Altmix advises that while CDs are suitable for short-term goals, investing in the stock market can yield higher returns for long-term objectives 3. He emphasizes the importance of not being overly conservative by sticking solely to savings and CDs, as this might lead to underexposure to market growth 3.

CDs are kind of like that suit. It's not that they make no sense. And I think, you know, rates, especially for medium term savings, they've not been better on CDs in a really long time.

--- Matt Altmix

Matt also suggests considering CD laddering and tax-advantaged accounts to optimize returns while maintaining liquidity for emergency funds 4.