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.... Any hints on the best plan of action?...

If you will not already be making the maximum deductable retirement contributions, then in the year you have taxable savings bond interest, you can make matching additional retirement account contributions to offset the additional income.

For example if you will have $1,200 in saving bond interest in a year, then increase your 401K contribution by $100 per month. This could defer the taxes for decades when you might be in a lower tax bracket in retirment.

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