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You may already participate in a 401(k) or other similar thrift plan. It's
wise to make use of these plans, designed primarily for retirement. These
plans, however, usually have some heavy-duty restrictions or penalties if
you pull your money out early. Savings bonds can be used before retirement,
if necessary, helping to protect your retirement investments. Bonds can also
supplement your other retirement savings.
There are a couple ways you can use bonds to save for your retirement. One way is to start saving regularly today and defer paying taxes on the interest that your bonds earn. After retirement, you can cash bonds to supplement your retirement income and report the tax-deferred interest as income at that time (when you might be in a lower income tax bracket). Another way you can add to your regular retirement income is to exchange your E/EE bonds for Series HH bonds. The HH bonds will pay you interest semiannually for up to 20 years. You can continue to defer paying taxes on the EE/E bonds that you exchange although the interest you receive on the HH bonds is taxable in the year it's paid. See also: Return to Main Menu for Series EE/E Bonds
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| Series HH/H | Series I |