All Series EE bonds still earning interest

many Series E's aren't

Issue date may tell you whether to cash in

January 21, 2001|By Neil Downing | Neil Downing,PROVIDENCE JOURNAL

I'm the holder of some Series E and Series EE savings bonds, and I'd like to confirm some information with you ... concerning the interest-earning periods on E and EE bonds. I have received some conflicting information.

This issue pops up all the time. And I'll bet part of the reason is that bonds can be confusing: There are different rules for different types of bonds.

Fortunately, the answer to your question is fairly straightforward. Here it is, updated for the new year. And it includes some points from Daniel J. Pederson, author of "Savings Bonds: When to Hold, When to Fold, and Everything In-Between" (Sage Creek Press; 276 pages; $19.95):

Series EE bonds earn interest for 30 years from date of issue.

Because these bonds were first issued in 1980, all Series EE bonds are still earning interest.

Series E bonds issued in November 1965 or before earn interest for 40 years from date of issue.

Because some of these bonds were issued as far back as World War II, some have stopped earning interest. All Series E bonds issued in January 1961 or before don't earn interest any longer and should be cashed in, Pederson said.

Series E bonds issued in December 1965 and later earn interest for 30 years from date of issue.

This means that all Series E bonds issued from December 1965 through January 1971 don't earn interest any more and should be cashed in.

How do you find out when your bond was issued? Just look at the upper right corner on the face of the bond. That's where your bond's issue date is printed.

I'm 70 1/2 , and I need to take a distribution from my annuity. I changed companies. But before I changed companies, they gave me my distribution. Do I, in the new company, have to take another distribution at 70 1/2 in the same year?

"She just has to take one distribution per year," said Patricia Campion, CFP.

You generally must take a withdrawal, or "distribution," from your annuity at about the time you turn 70 1/2 . If you transfer your annuity from one insurance company to another at that time, it's standard practice for the original company to hold back that portion of the transfer that you should be withdrawing. That way, you'll meet the withdrawal rules, said Campion, who is a senior trust consultant with TIAA-CREF, the giant pension-fund manager that also oversees mutual funds and annuities.

Based on your question, it appears that this is what happened to you: From the original company, you received the money that you were supposed to withdraw. And that covers you, Campion said; you need not make an additional withdrawal from the new company in the same year.

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