The composite rate of I Bond is not that attractive now compared to the yield of the other bonds. IMO the main advantage of using the giftbox to pile up I Bond is due to its tax deferred up to 30y.
If that's your preferred tax strategy, you should also mind your current tax rate for holding $1.2M VTSAX (sec yield: 1.21%) in taxable.
I don't know your tax situation but if in my case, I have to pay 20% (Fed tax rate for qualified dividents) + 3.8% (NIIT) + 13.3% (CA tax dividends as ordinary income) = 37.1% total tax rate on that $1.2M*1.21% = $14,520 *37.1% = $5,387. That's why I'm also holding CA Muni fund in taxable.
If that's your preferred tax strategy, you should also mind your current tax rate for holding $1.2M VTSAX (sec yield: 1.21%) in taxable.
I don't know your tax situation but if in my case, I have to pay 20% (Fed tax rate for qualified dividents) + 3.8% (NIIT) + 13.3% (CA tax dividends as ordinary income) = 37.1% total tax rate on that $1.2M*1.21% = $14,520 *37.1% = $5,387. That's why I'm also holding CA Muni fund in taxable.
Statistics: Posted by majiaknight — Sun Oct 27, 2024 1:50 am — Replies 34 — Views 6730