...like a previous poster said in this thread, when we are within a couple years of college, I will start backing out of stocks and putting money in to cash, CD's or U.S. "I" bonds,....Dave,There are time requirements for I bonds, and you have limits on how much you can put in at once. They are a better investment as you go along, rather than a dump to safety. When we invested in our I bonds it was our emergency fund that we figured if no emergencies occurred, we would use it for the kids' college costs. They have changed the purchase restrictions so that it is tougher to put much in at once. There are also strict rules about how the bonds have to be titled to be tax preferred for education. If anyone buys a bond for your kid, it has to be in the name of an adult at least 24 years old at issue to be tax advantaged.When can I cash (redeem) an I Bond if I need the money?You can cash your Series I bonds anytime after 12 months. You receive the original purchase price plus interest earnings. I Bonds are meant to be longer-term investments; if you redeem an I Bond within the first 5 years, you'll lose your last 3 months interest. For example, if you redeem an I Bond after 18 months, you'll receive the first 15 months of interest.https://www.treasurydirect.gov/indiv/research/indepth/ibonds...How much can I buy?Note: In any one year, for any one Social Security Number, you can buy $10,000 per year in electronic I Bonds.(For paper I bonds bought with your IRS tax refund, you can buy up to $5,000 per year, per Social Security Number).http://treasurydirect.gov/indiv/research/indepth/ibonds/res_...The Education Savings Bond Programpermits qualified taxpayers to exclude from their grossincome all or a portion of the interest earned on the redemption of eligible Series EE and Series I bonds issued after 1989. You must be at least 24 years old before the bond's issue date. To qualify for this exclusion, the taxpayer, the taxpayer's spouse, or the taxpayer'sdependent at certain post-secondary educational institutions must incur tuition and other educational expenses. Persons with incomes above certain thresholds may not be eligible to participate. The tax exclusion is described in 26 U.S.C. 135(see GPO.gov)http://www.treasurydirect.gov/forms/savpdp0051.pdfIt can be a great tool for a portion of your account, but you have to know the restrictions and the rules or you might not be able to use them as you hope.IP
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