Treasury bonds part of your nest egg? If not, why not?

Most long term investors know they should take the long view. Which means not panicking when the inevitable bear market arrives. Or there is another serious war in Europe. Or pandemic, combined with recession. Oh, and skyrocketing inflation. Still…

Stuff happens. And when it does, the steady-as-she-goes investment advice often makes less sense than it did in better times. For many people, dating back to World War I, Treasury securities have been a steady part of their personal financial planning.

For workers under the FERS retirement program, the TSP could supply anywhere from one-third to half of the income they have in retirement. Unlike their annuity, and Social Security, the TSP is not protected from inflation. But many experts say that in addition to fully funding their TSP, feds should consider other super-safe options to pad out the nest egg. Millions of people still have paper certificates. But bonds are now also electronic. And the bonds are an even better deal.

One such option is a treasury bond suggested by financial planner Arthur Stein in March. At that time it was paying 7.1%.

More recently, the Washington Post’s Michelle Singletary told feds how to get a Treasury security paying 9.62%.

Then there are also more traditional savings bonds as a nest-egg booster. Retiree Abraham Grungold, a very successful TSP investor, is now a full-time financial coach. Among other things, he’s been helping feds and retirees who had — and lost — actual paper bonds with how to get their money back. It’s a big problem, especially with older investors whose only option at the time was the paper trail. Fine, until they lost track of them. Then what? Here’s what he recommends:

For many, savings bonds have been a part of our lives. We have purchased and or received them for the birth of a child, wedding gifts, saving for college, and saving for retirement. Historically, you purchased them at your local bank and received a paper bond from the Treasury Department. For the past few years, the method to purchase savings bonds can only be transacted through the Treasury Direct website.

In the past, federal employees participated in the U.S. Savings Bond Drive and purchased bonds through their payroll allotments. I purchased bonds during my 36-year federal career and even recently in retirement. I started with 50 and 100-dollar bonds. Then I moved up in denominations, because it was easier to accumulate larger size bonds instead of a lot of smaller ones. I owned dozens of them. I kept a detailed list of them. Over the years, I cashed in many of them if I needed to make a major purchase or once they matured after thirty years. At maturity, the bond will stop accruing interest. Once you cash them in, you must pay federal tax on the interest earned. The IRS will send you a 1099.

Recent reports have shown that there are unclaimed savings bonds valued at approximately $25 billion. These matured bonds have never been cashed and no claim has ever been made by a beneficiary. And what happens if you lose the paper bonds? I had a client who contacted me about their lost bonds. They lost 72 paper bonds. The total value was approximately $694,000. It took me eight months dealing with the Treasury to have all of them recovered back into the hands of my client.

So why did it take so long and what do you need to be aware of?

Starting the process

You first need to start with a FS Form 1048 Claim for Lost, Stolen, or Destroyed United States Savings Bonds. The Treasury assigns you a case number, and then the many hurdles and challenges begin. Some of the following issues require specific forms and need to signed and notarized.


The Treasury needs to identify who is the owner of the bond. It may have only one owner, co-owners or the bond may have been gifted to someone. This is a critical issue.


If the bonds are lost, a search is performed on the owner’s Social Security Number. On paper bonds, if the SSN was incorrectly typed on the bond, that means that the bond is unverified. The only way to verify a bond without the correct SSN is with the bond’s full serial number. A closer review of the bond would then need the owner’s name. My client had 12 bonds valued at approximately $100,000, and the Treasury stated that they were previously cashed. We had the full serial numbers, so the Treasury did a separate search and found all 12 bonds which were then verified as not yet cashed. If you do not have the full serial number, then the bond may be lost forever.

Reissued and Matured Bonds

Bonds which are verified can be reissued to the owner in a Treasury Direct account. The Treasury will not reissue a paper bond. If a bond reached the full maturity of 30 years, then it cannot be reissued; it has to be cashed out and the proceeds are given to the owner. My client had 48 fully matured bonds and 24 reissued bonds. In the event these 72 paper bonds resurface, they cannot be cashed.


Although the steps sound fairly straight forward, the Treasury is short staffed and overwhelmed with these requests. Contacting the representative assigned to the case is a frustrating challenge. Due to security issues, you are not provided with their last name, you cannot leave a voice mail, you cannot send an email, and no texting. Wait times to speak to another representative are 90 to 120 minutes. Regular mail takes weeks to process due to the COVID-19 protocols. I found the best way was to send a fax with the case number and it reached the case representative quickly. The follow-up to the fax was either a phone call or an email from the Treasury representative.

My presentation of the 72 bonds and my calculations were accepted by the Treasury representative without any challenge. The successful outcome was that my client received every dollar owed to them, but that was largely due to the record-keeping they maintained over 30 years. My suggestion to anyone attempting this on their own is to be patient, tenacious and keep a chronological log of the steps you have taken along the way. You want to keep a copy of the records mailed and or faxed.

Nearly Useless Factoid

By Daisy Thornton

Research has found that people become friends more quickly with people who smell similar to them.

Source: Scientific American

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