|
Jeff Fleming
Should Government I bonds Be Part of My Roth IRA?
Question:
What do you think of government I bonds for a retirement investment? Can I make them part of a Roth IRA investment?
Answer:
First, let's review some of the features of government I Bonds to make sure we understand how they work. These bonds are purchased at face value, and the interest earned is accumulated and paid when the bond is cashed. In other words, income taxes are postponed on the earnings. Speaking of the earnings, I bonds have both a fixed rate of return and a variable semi-annual inflation rate. While the fixed rate remains the same throughout the 30-year life of the bond, the inflation rate varies every six months based on changes in the consumer price index. This adjustable rate helps protect your investment against the loss of purchasing power caused by inflation.
Are I Bonds IRA-Compatible?
Peruse the Archive
Back to Money Experts
Back to ThirdAge Money
|
