- Welcome to Curt's Chalk Talk, late stage college funding series. I'm Curt Sheldon with CL Sheldon & Company, and today I'd like to talk to you about those EE, US savings bonds that you've been buying over the years.
And you were planning on using those to fund your child's education. Which is a good idea, because if you do the interest on them is tax free. But there's a hitch, that ability to get tax-free use of the interest phases out based on your income. If you're married, it starts at $121,600 and is fully phased out at $151,600. And if you're single, it starts at 81 one and faces out at 96 one. And that's a problem because if you're an O-6, getting ready to retire, you're already in the phase out. And by the time you get a job in retirement, you're almost, certainly, be over the top.
So what do you do about it? Well, get rid of those savings bonds before you retire. If your child's in college, use them now, don't wait. And if your kids are too young for school, consider moving them to a 529 plan, which is considered a qualified education expense before you retire and before your income is too high to take advantage of the tax free interest.
Finances aren't simple as you enter retirement. And if you'd like a checklist to help you transition from the military to the civilian world, check out our checklist at www.clsheldon.com/college. That's www.clsheldon.com/college. And by the way, it's free.
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