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Question about Series EE and I bonds

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  • Question about Series EE and I bonds

    So I have learned a lot from this and other site and I am a younger physician just a little over 1 year out from training.  I have a pretty good grasp on my finances but one thing I struggle with is bonds.  I have read and researched municipal bonds, series EE, and series I bonds until my head was spinning.  I have read numerous topics on these in the bogleheads forum but I wanted to know what you guys think.  I am not interest in all the opinions you get with bogleheads who are in a different situation that the majority of physicians and this seemed like a good place to ask.

    I save about $200,000 a year with my 410k, 401k match, backdoor roths, taxable, 457, and 529 plans.  I am an employee so about half of that goes in the taxable category.  My current investment plan is for 10-15% bonds since I am young and fairly aggressive with only about 300,000 in retirement savings.  Anyway I do have some minor issues and things I am considering about my overall portfolio but as the message states my biggest concern now is just bonds so if we can stick with just the bonds for now that would be great.  Obviously I am in a higher tax bracket and at first I was doing a muni bond fund in my schwab account listed below:

    SPDR Barclays Muni bond  ticker TFI  net expense ratio .23%

    I do not have a pension and don't plan on having one but I do like the idea of a self built annuity with Series EE bonds.  My plan was to buy 20,000 of series EE yearly (10k for me and 10k for my wife).  I would do this for at least 20 years until my tentative retirement or partial retirement date at 55 years old.  I would then have a guaranteed income of 40k per year pretax with the automatic doubling of EE bonds at 20 years.  I know all about the fact that you can't take it out until then and all that about Series EE bonds and with my (or our situation) as a physician with a fairly stable job and good disability and life insurance I am okay with not having access to it.  What I do after I turn 55 I haven't figure out but I will work on that as my investment plan changes.

    My big question to you fine people on this forum is what should I do with my bond.  Should I just stick with the muni fund?  Should I do what my plan in my head is and dump the muni fund and do 20k in series EE bonds yearly which gives me my 10% bond allocation?  Or am I missing something with the Series I bonds and I should be looking more into these?

    I'm just struggling to compare all of these and I'm not too concerned about inflation, but maybe that is a flaw.  To me it seems like the EE bonds doubling will keep up with inflation just fine but that's why I'm here asking some people that may have some more thoughtful answers.  Thanks in advance.

  • #2
    If you pull the funds out before the 20 yrs is up for whatever reason, you will get a terrible rate of return.  I don't think interest rates will stay this low but who knows?  I think you'd be better off investing funds in balanced stock bond portfolio over the next 20+ yrs.

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