BUYING I BONDS, OTHER READER QUESTIONS
Q: I have already purchased a Series I bond in 2022 for $10,000. Can I also purchase one for my grandchild?
A: Yes, you can purchase a gift for your grandchild. If your grandchild is younger than 18, then the account will have to be established at TreasuryDirect.gov by an adult or guardian. The procedure for gifts is explained on the TreasuryDirect website. Gifts can be purchased for any party as long as the procedure is followed.
Q: My husband applied for his Social Security benefits at age 70. I am 60 and will eventually receive a pension from my government work, which is not covered by Social Security. Will that impact any spousal benefit I am entitled to, or survivor benefit?
A: Yes. Once you start receiving your government pension, the spousal benefit or survivor benefit would be impacted. This reduction is known as the Government Pension Offset (GPO). Your benefit for spousal benefit and survivor benefit will be reduced by two-thirds of the pension you receive. So, it is possible, based on the amount of your pension, that you may not be entitled to a spousal benefit or survivor benefit.
A fact sheet on the Government Pension Offset is available at www.ssa. gov/pubs/EN-05-10007.pdf. A GPO calculator is at www.ssa.gov/planners/retire/ gpo-calc.html.
However, if you don’t plan on retiring for several years, you would be eligible for a reduced spousal benefit at 62, which would not be reduced by GPO if you haven’t retired yet. But as soon as you initiate your pension, GPO offset will be applicable.
Be advised that if you do apply for spousal benefits at 62, your spousal and survivor benefits will be reduced permanently.
So, you have to decide whether the short-term income from 62 to the date you retire is more important than the reduced benefit (associated with early penalty for initiating benefits at 62) you will receive from spousal benefits and survivor benefits (if your spouse predeceases you).
Q: I read a recent column you wrote about I bonds. You indicated that on May 1, a new interest rate was established based on the CPI. If my husband and I invested $10,000 each in I bonds now, would I be eligible for the interest rate established on May 1?
A: Yes, the interest rate established on May 1 is valid for six months. If you purchase I bonds after Nov. 1, a new rate established then would apply.
Q: I retired with a pension from my government service under the Civil Service Retirement System. If I die before my spouse, what will her benefits be? A: Her benefits will depend on your selection when you retired. You had three options.
One option, called “full CSRS,” provides 55% of your annuity to your surviving spouse. This selection reduces your pension by 10%. You also had a second option to provide a lower amount to your surviving spouse. With this option, your surviving spouse would receive 55% of whatever portion (less than 100%) of your pension amount you select for your spouse’s survivor benefit. The third option is that your spouse does not receive any of your pension. In this case, your wife would not be eligible for health insurance coverage from CSRS. Written spouse approval is required for any option other than the full CSRS option.
Q: Can I purchase an I bond in my Roth account? If not, can I have the income from the I bond added to other investment accounts I have?
A: Unfortunately, you can’t purchase I bonds for a Roth account. Regarding income from I bonds, interest is only available when you redeem the bond. However, the income from I bonds will not be taxable until redemption.