Personal Investments • Does it make sense to extend duration on TD gift boxes?

I would definitely put in extra $20k into the I-bonds and grab the 1.3% fixed rate. Surely the reasons that you listed are going to cost you more than $20k? [ early retirement health insurance, new automobile, college expenses, mortgage payoff ...]. Unless either of these reasons are occurring or going to occur prior to 2027, I'd say it's a no-brainer to extend the gift-box.

Do you regret that you are unable to lay your hands on the fund in 401(k) plan at your employer? Ditto here ... this is an extension of your tax-deferred space.

The mental hurdle I have is that I think of cash as the oxygen necessary to breathe, but additional I Bonds in this instance would be inaccessible in case of emergency, and yet at the same time not carry the risk/return potential of equities which are the real long duration asset. I am creating this third bucket that will be untouchable forcing me to accumulate additional free cash that may otherwise have gone into equities.

On the other hand it is creating a forced scarcity which is something I believe in and sometimes feel that I need in order to ground myself. It is something I'll need to get used to if & when we do leave our jobs. I know this is a question of asset allocation, and ultimately I am inserting the shortening duration of my peak earning years into how I think about how to best save and invest our earned income.

Statistics: Posted by PA_Boglehead — Mon Mar 11, 2024 7:53 pm — Replies 2 — Views 202

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