Series EE Bonds

[Roadrunner53]

Years ago my Hub and I bought savings bonds (Series EE) thru payroll deduction. Each bond we paid $50 and when mature the value is $100. These bonds go back to the 1990's. Once cashed, we have to add this to our income. Right now, we can't add anymore to our income due to being on Obamacare and receiving a subsidy. Our income is close to the edge of falling off the cliff. However, next year we will both be on Medicare and we can up our income. My question is have any of you cashed in bonds while in retirement? Is there any strategy to cashing them? Just cash in the mature ones or cash in the whole caboodle and take a tax hit. With the new tax rates starting this year, it might be wise to try to stay in the 12% income rate for married people $19,050-$77,400. Any words of wisdom? I think we have about $15,000 worth of bonds when mature.

[VoteCthulu]

Assuming you haven't been paying taxes on the interest before now, you'll owe taxes when they mature whether you redeem them or not. If you can spend them on an educational expense before then, you may be able to avoid paying any taxes.

Otherwise you'll have to do the math and figure out when the best time to sell them is for your situation.  Hopefully an additional $7500 of income spread over 5+ years won't make too much of a difference.

[Roadrunner53]

Spoke to the CPA and she told me to pull out money from the bonds, the ones that are fully matured, then take less out of IRA's next year. Same for the following years till they are all cashed in. She told me that CT doesn't tax interest earned, but Federal does. So that is the plan for next year. Never gave it any thought when I bought them that it would be a hassle to figure out best ways of avoiding taxes!