05.14.25 Saving Strategy: Series I Savings Bonds / The U.S.-China Tariff Reprieve

Summary

The Clark Howard Podcast – Episode Summary Episode Date: May 14, 2025 Episode Title: Saving Strategy: Series I Savings Bonds / The U.S.-China Tariff Reprieve

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Introduction

In this episode of The Clark Howard Podcast, host Clark Howard delves into effective saving strategies, specifically focusing on Series I Savings Bonds, and provides an update on the latest developments concerning U.S.-China tariffs. Throughout the episode, Clark addresses listener questions, offering actionable financial advice to empower his audience to make informed decisions.

Series I Savings Bonds: Are They Still Worth Buying?

Timestamp: 01:03

Clark Howard begins by exploring the relevance and benefits of Series I Savings Bonds in the current economic climate. He explains that Series I Bonds are designed to outpace inflation, making them an attractive option for savers seeking to preserve their purchasing power.

Key Points:

• Structure of I Bonds: Clark describes the two components of I Bonds—an initial fixed rate and a variable inflation rate that adjusts every six months based on current inflation data.

  “You get paid for inflation. It’s an amount above the rate of inflation, and then every six months, the bonds recalculate what current inflation is and give you that amount in interest.” (01:45)

• Interest Rates Comparison: He highlights that while I Bonds might offer a lower immediate return compared to some Certificates of Deposit (CDs) or savings accounts, their inflation protection provides long-term value.

  “If you can put your money in a CD earning 4 point something percent or a savings account earning 4 point something percent, why would you buy a Series I savings bond at 3.98%? The reason is to lock in earning more than the rate of inflation.” (04:10)

• Flexibility and Terms: I Bonds can be held for up to 30 years, offering flexibility with minimal penalties for early redemption after five years.

  “They are so flexible and what they let you do is not get you rich, but they are a very viable, good vehicle for the savings portion of your life.” (05:00)

Listener Questions and Advice

Timestamp: 06:10 - 10:27

Following his discussion on I Bonds, Clark takes questions from listeners, addressing a variety of financial concerns.

1. Cashing in Series I Savings Bonds:

   • Caller: Arlene from California

   • Issue: Difficulty cashing in paper I Bonds due to credit unions' limitations.

   • Advice: Clark recommends converting paper bonds to electronic ones via TreasuryDirect.gov, avoiding the need to mail them.

     “There's a procedure where you can convert them from paper to paperless right on the website and then cash them out direct.” (06:36)

2. Accurate Smartwatches for Health Monitoring:

   • Caller: Susan from Kansas

   • Issue: Seeking reliable smartwatches for monitoring blood sugar and blood pressure.

   • Advice: Clark discusses recent FDA approvals, highlighting the Dexcom Stelo glucose biosensor system integrated with Aura rings for accurate glucose monitoring.

     “It's called the Dexcom Stelo glucose biosensor system. It's the first one the FDA has cleared for monitoring glucose continuously.” (08:32)

3. Vehicle Safety Concerns:

   • Caller: Amy from Georgia

   • Issue: Subaru Ascent catching fire unexpectedly.

   • Advice: Clark suggests reporting to the Center for Auto Safety and checking for recalls via the National Highway Traffic Safety Administration (NHTSA).

     “Go to autosafety.org file your story and that will help others much more than just a complaint to NHTSA.” (11:46)

The U.S.-China Tariff Reprieve: What It Means for Consumers

Timestamp: 16:01

Clark shifts focus to the geopolitical landscape, discussing the recent reprieve in tariffs imposed on goods from China and its implications for American consumers and retailers.

Key Points:

• Tariff Reduction: The U.S. and China have agreed to lower the base tariff on Chinese goods imported into the United States from 145% to 30% over a three-month window, alleviating fears of severe shortages.

  “The tariffs on goods bound for the United States have been reduced from a base of 145% to a base of 30%.” (16:30)

• Impact on Retailers and Consumers: This reduction helps replenish inventory for retailers ahead of the Christmas season, ensuring that shelves remain stocked with essential goods.

• Long-Term Outlook: Clark anticipates a broader shift towards a 10% base tariff on goods from various countries, balancing protectionism with manageable rates for both consumers and businesses.

  “A 10% tariff wall is something that we can handle as individuals, as businesses, and as a country.” (19:10)

• Economic Implications: While consumers can expect some price increases due to the tariffs, the overall impact is moderated by manufacturers and retailers absorbing portions of the costs. Additionally, there may be a positive trend of increased domestic manufacturing in the U.S. in response to the sustained tariffs.

Final Listener Questions

Timestamp: 20:41 - 27:40

Clark addresses additional listener inquiries, providing practical advice on various financial and consumer topics.

1. Car Purchase Scam Alert:

   • Caller: Christy from Georgia

   • Issue: Potential scam involving a Toyota being sold via email.

   • Advice: Clark warns against such scams, emphasizing the red flags and advising discontinuing communication.

     “Chrissy, this is an old scam. Discontinue any communication with this seller.” (21:15)

2. Roth IRA and Emergency Fund Strategy:

   • Caller: Laura from Tennessee

   • Issue: Balancing contributions to Roth IRA and HSA while maintaining an emergency fund.

   • Advice: Clark approves of Laura’s method, highlighting its effectiveness and encouraging her to continue.

     “No risk at all. It's very smart. Many people do this.” (22:35)

3. Using HSA Funds Abroad:

   • Caller: Katie from Hawaii

   • Issue: Utilizing HSA funds for healthcare in another country.

   • Advice: Clark explains the feasibility of using HSA funds internationally, with considerations for legal medications and reputable providers.

     “As long as the meds you buy have to be legal in the United States and you have proper receipts, you can do that in Mexico.” (23:34)

4. Retirement and Care Facilities:

   • Caller: Laura continues

   • Issue: Concerns about the quality of care facilities abroad.

   • Advice: Clark advises visiting potential facilities in person to ensure quality and reliability.

     “There's nothing like experiencing a facility on the ground.” (26:35)

Conclusion

Clark Howard wraps up the episode by reiterating the importance of informed financial decisions. He emphasizes empowering listeners with knowledge to save more, spend less, and avoid financial pitfalls. The episode provides valuable insights into leveraging savings bonds for inflation protection and understanding the evolving landscape of international trade tariffs, ensuring that listeners are well-equipped to navigate their personal finances effectively.

“The more you can step back and make a reasoned decision based on facts and trusted information, the better it will be for you.” (27:40)

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For more information and to submit your questions, visit www.clark.com/askclark.

Transcript

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[Clark Howard]

It's great to have you here on the Clark Howard Show. You know our mission is to serve you with advice and information that empowers you so you make better financial decisions in your life. Today I'm going to talk about I bonds. Are they still worth buying? How do they work? What exactly is an I Bond is a way for you to earn more than inflation on your savings. And also, the tariff news never stops changing. We got a temporary reprieve on goods coming from China and I'm going to explain how this is going to work, what it's going to mean for this upcoming Christmas. And I'll also get to your questions. And remember, when you want to ask me a question, go to clark.comask so series I Savings bonds there's something there was a frenzy about. Guess it was four years ago when inflation got completely out of control in the back half of COVID and Series I savings bonds were so popular that it crashed the US Treasury Department website day after day with people clamoring to buy them at just under 10% interest. Before that, almost 10% interest window closed. Before that, people really were yawning about Series I savings bonds. I is for inflation and these are bonds you buy online at treasurydirect.gov or savings bonds.gov and they have two components that you get paid for. One is what I call for breathing. It's an amount you get a above the rate of inflation. And then every six months the I bonds recalculate what current inflation is and give you that amount in interest. So twice a year they reset. You can hold them up to 30 years. If you don't remember to Cash them in after 30 years. You're from that point forward making an interest free loan to the government. They keep having your money, but they don't pay you anything else. What makes Series I savings bonds a good deal is that you get more than the rate of inflation right now. The irony though, if you buy them is if you shop around for CDs or savings accounts, you can earn more than the Series I savings bond will earn over the next six months because they will earn only 3.98%. Why would you do that? If you can put your money in a CD earning 4 point something percent or a savings account earning 4 point something percent, why would you buy a Series I savings bond at 3.98%? The reason you would do it is to lock in knowing for as long as you wish to own it that you're earning over 1% more than the rate of inflation. Historically, savings accounts earn less than the rate of inflation. CDs earn less than the rate of inflation. So this gives you an opportunity with up to $10,000 a year in savings money to earn more than the rate of inflation. Reset every six months. And if you have regrets later, you can sell them after 12 months or longer. If you sell before five years, you suffer a 90 day interest penalty. And after five years you can sell at any time without any penalty at all. Or you can hold them all the way up to 30 years. They are so flexible and what they let you do. Is a savings bond going to get you rich? No, it's a savings account. It's not an investment. Wealth is created by investing in the future of the country and the world where you put your money at risk. And that's what investing is, where you can end up with less money than you started with so that you have an opportunity to earn a lot more. That's why I believe that investing is such an important part of what you do. Building wealth for the long term. But savings bonds for the savings portion of your life are a very viable, good vehicle. Again, savings bonds.gov or treasurydirect.gov to buy them again, up to 10 grand.

[Caller]

All right, we'll go to questions now. The first one's from Arlene in California. She says, I loved I bonds. Since you recommended them in the 90s. It's time to cash in a bunch of them. And they are mostly paper. Neither of my credit unions cash them now and I definitely don't want to mail them in as the Fed suggests. What is my best option for cashing lots of them. It seems so easy when I first bought them. Help.

[Clark Howard]

Okay, lots to talk about here. First of all, the golden era for buying series. I was when they were first came about, when you bought them, Arlene, decades ago, because they were earning the inflation rate plus somewhere around 3.3, 3.5%. I mean, incredible deal. And you have really done the absolute max you could to take savings and earn an investment type return over these decades. So if you go to treasurydirect.gov yeah, they talk about mailing them in, but there's a procedure where you can convert them from paper to paperless there right on the website and then cash them out direct, having the money deposit straight into the account you want them to go into. So they don't want you to mail them, you don't want to mail them, you don't want that risk. So they don't want the hassle. And so that's why they have this method where you can convert a paper bond into an electronic one. And that's what I do before you cash them in.

[Caller]

Then Susan in Kansas wrote this. I want a smartwatch to monitor my blood sugar and blood pressure, which is the most accurate choice of a smartwatch.

[Clark Howard]

Okay. So this is a fascinating question. You know, why?

[Caller]

Why?

[Clark Howard]

Because I don't know if you remember when we had this question like a year ago or we talked about a year ago, the FDA had issued an alert saying, don't trust any of these that claim this. There's no such thing. It's baloney. It's not going to be accurate. You have to have something that pierces the skin to have an accurate reading. Blah, blah, blah.

[Caller]

And sugar for sure. For glucose monitoring.

[Clark Howard]

Yeah. Guess what happened two weeks, three weeks ago.

[Caller]

What?

[Clark Howard]

The FDA approved a device that allows you to monitor and I think Aura is the only partner at this point. If you have one of these aura rings, if you watch our YouTube show, you see mine. So they have a deal with this new glucose monitor that the FDA has approved that just goes on you for like, I think a two week period. And it's able to get an accurate reading according to the FDA approving it.

[Caller]

Okay.

[Clark Howard]

It's called the Dexcom Stelo glucose biosensor system. It's the first one the FDA has cleared for monitoring glucose continuously. It has this tie in with Aura that it sends data back and forth and you have every day on your aura a report on how your glucose levels were through that day. And it uses AI to figure out, oh, well, your blood sugar levels were better. Here's what you did that day. So it's a behavior thing as well.

[Caller]

But blood pressure, I think blood pressure, a cuff, right?

[Clark Howard]

Blood pressure. Everybody is working on that. You know, Apple's been working on that. I'm sure Samsung has a lot of medical startups working on direct to consumer kind of blood pressure monitors. You know, when you buy a blood pressure cuff, it's really hard for a typical consumer to get an accurate reading with a home blood pressure monitor. That one is going to take a while, but we're going to get there. Yeah, we're going to get there. And I believe the health rings are going to be the first ones that are really successful at it because you got the connection all the time.

[Caller]

All right, Amy in Georgia says my 2023 car, you see I gave you the name of the car, flashed all of the warning lights and shut down on the highway. I tried to start it again and couldn't get it to start or shift into neutral to get out of the lane. I was in the far right lane already. My husband told me to call 911 to let them know I was stuck. The dispatcher effectively saved my life. She told me to get out of the car and instructed me on how to do it safely, knowing I was on the highway and told me to get as far from the car as possible. Within seconds, the engine sparked and the car was engulfed in flames. Separately, the manufacturer has been less than helpful. They took over a week following the incident to return my phone call reporting the event. This reeks of mishandling on the heels of a recent recall of the prior model of the car. I can't help but wonder if the recall should be extended and it was for this problem. I'm stunned that the manufacturer won't pause everything to investigate a less than 2 year old car spontaneously catching on fire in rush hour traffic on the highway. I'd love some advice on how to pursue and handle and also report to your followers. The car had regularly experienced routine maintenance at the dealer. Last visit was in January. I reported the incident to NHTSA and have also not received any follow up.

[Clark Howard]

Right. In this case I'm going to go ahead and name the vehicle because it's a published recall on the prior model and there's so much noise in our lives that if you drive this vehicle you probably didn't even know that it had a recall for fire risk. And it's the Subaru Ascent doesn't mean that if you own an ascent of the years that were recalled that your car is suddenly going to spontaneously combust. But there is an issue that caused this recall. Now, when you file a complaint with the National Highway Traffic Safety Administration, they're not going to do anything for you. All they're going to do is add you to their database. What I do want you to do though is go to the website of the center for auto [e-mail] it's a private organization. It's kind of a watchdog that watches out to make sure that the feds through NHTSA are doing what they should do to keep vehicles safe on the road and get unsafe vehicles off the road recalled. And they are active with their database. Go to autosafety.org file your story and that will help others much more than just a complaint to nhtsa, the automakers generally are not that responsive. When you have a tragic event in your vehicle and thank goodness you and nobody else were hurt seriously, so scary. And if you have an ascent, look up the recalls on this danger. See if yours is a vehicle model year that was your VIN was actually one that was recalled for a fire safety risk.

[Caller]

Wow, what a great dispatcher that.

[Clark Howard]

Yeah. How about that? Yeah. My, my middle brother Neil was driving on an interstate one day and his vehicle conked out and he got, he got over the side, was on the shoulder, gets out of the car and what did it do? It went crispy critter on him. So vehicle fires are a real but fortunately rare event. Coming up ahead, I want to help you understand what's going on with the tariffs on goods from China. What's it going to mean to your wallet?

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[Clark Howard]

Situation has caused a lot of tumult and the number of ships that were bringing goods from China fell to flat out almost nothing. Once the new 145% base tariff went into effect, which was basically a boycott of any goods from China coming into the United States. It was starting to lead to really dire warnings of shortages of all different kinds of goods. Because whether we like it or not, a huge amount of the goods sold in the United States come from China. So you know, there's a lot of stuff going on in the news. Did we blink first? The Chinese blank first? Who cares? The reality is that in order to negotiate a longer term deal, the tariffs, the US and the Chinese agreed to reduce the tariffs on goods bound for the United States from a base of 145% to a base of 30%. What it means is that over this three month window, the ships are coming back to the United States and a large, large amount of goods from China are coming our way. This was especially important to retailers that Christmas is very important for their sales for the year. And they were looking at having empty shelves in the toy department, the clothing department, you name department for Christmas shopping. So retailers are going to scramble as our Chinese manufacturers, shippers. The ports are going to be busy like you can't imagine getting goods in during this 90 day period. For you and me, what does it mean? Goods are going to cost more from China. It's not going to be 30% more because it was already existing tariffs on a lot of things, but goods will cost more, not a crazy amount more because a certain amount will be absorbed by manufacturers in China and retailers in the United States. But we will see some higher prices. As for where it looks like this is all going to settle down is potentially what the president signaled. A 10% base tariff on countries around the world. The new deal with the United Kingdom, which is the clearest of the ones so far for a long term trade deal is just that, a 10% tariff on goods manufactured in Great Britain, in England, coming to the United States. And so a 10% tariff wall is something I'm not, I don't like tariffs, I've said that all along. But a 10% tariff wall is something that we can handle as individuals, as businesses and as a country. And so that seems to be where things are generally moving. It means with a lot of countries where they had virtually zero tariffs on our goods coming to them and they faced minimal tariffs sending goods to us, often about two and a half percent that that two and a half percent that was so common is now going to be more like 10%. It will lead to a one time inflationary impact in the United States. After that, as long as we stay in that general area with various countries, that will be it. And what's the positive of this? Because I've talked a lot about the negative. The positive is that at 10% and if people know that's what it is, there will be some companies that have been manufacturing overseas that will choose to expand facilities in the United States or open facilities in the United States to manufacture goods for the US Market. The US Market is an extremely large market for goods. We're a huge population. We are mega consumers in the United States. And so there may be some additional manufacturing in the United States from a predictable long term 10% tariff. That would be the upside.

[Caller]

All right. Christy in Georgia wrote in with this. I found a car which is only $1,000. It's a Toyota with 88,000 miles on it. I'm getting emails from the owner stating she will send the car through ebay with the title and all documents needed, etc. I've asked her to call me but she only emails. I've seen pictures of this nice car. She says I can keep it for five days with no money paid, but if I want it I will pay. And she has a bill of sale for me. She signs the emails as a sergeant with the National Guard and says she's leaving the country soon. What do you think? Originally found the car on Facebook Marketplace.

[Clark Howard]

Chrissy, this is an old scam. Discontinue any communication with this seller. It's a big fat lie. There's no way that this is going to end up in any form or fashion other than you being ripped off who knows how because it has so many different wrinkles. But this is something there have been warnings about for years, about people pretending to be with the military, going on deployment, having to sell off possessions in a hurry. This is completely bogus.

[Caller]

Laura in Tennessee says, I've heard a lot about how valuable it is to contribute as much as you can to your Roth IRA and HSA for future retirement. But you also want to make sure you have an emergency fund before focusing on investing. Since there's a deadline to contribute to these accounts each year, we've been moving cash into these accounts and leaving the money in cash equivalent to count towards our emergency fund only what we can get out with receipts and Roth principal. Once we meet our emergency fund goal, I will start investing that money to fully take advantage of those accounts. This approach seems to allow us to get money into these tax advantaged buckets as early as possible while still making sure we have accessible cash for an emergency. But I've never heard anyone mention this strategy. Is there some risk with this approach that I'm missing, Laura?

[Clark Howard]

No risk at all. It's very smart. Many people do this. You're not accomplishing something though if you repeatedly end up rating the Roth. Your mentality clearly from what you posted, is so methodical and you are so focused on getting the maximum in each year into the Roth and the hsa. Keep doing exactly what you're doing. Okay.

[Caller]

Katie in Hawaii wrote this recently. You talked about the many tax advantages of using an hsa. I'm thinking about the future and perhaps moving to another country to retire. Is it possible to use the money from the HSA for health care in another country? Mexico, for example? Will they accept receipts in another language? Are there any gotchas to be aware of? I imagine living in Hawaii you'd want to look for somewhere else.

[Clark Howard]

Yeah, Hawaii is the most expensive state in the US to live in and it's also perfect.

[Caller]

I know.

[Clark Howard]

Oh man. Anyway, yes, you have a little bit more administrative hassle, but first of all you got to think how many Americans in retirement are now living in Mexico in Central America, It I don't know if it's beyond a million, but it's a lot of American retirees now living in Mexico and Central America because the living costs are so much lower. Also, the cost of health care as an example is much, much lower in Mexico and Central America. So yes, you can use your hsa, you can buy meds. The requirement is pretty Simple. The meds you buy have to be legal in the United States. As long as they are and you have proper receipts, you can do that in Mexico. I would be remiss if I didn't mention there's a big problem with counterfeit prescriptions, counterfeit meds, and they look like the real thing. Often they are not. So when you move to a retirement community or an area with a lot of Americans and Canadians living in Mexico, your friends will let you know where the reliable, reputable pharmacists are. And you go to those. As far as medical bills, same thing. As long as whatever treatment it is is legal and recognized in the United States, you're able to use your HSA money there. And what's my obsession with the hsa? It is the one account that's even better than a Roth. Yeah, I said it, didn't I? Because with an HSA the money goes in pre tax, it grows tax free and it's spent tax free. It's incredible. And it's something that so few people who have an HSA use it the way it gives you the greatest advantage, which is if you can afford it over the years that you're funding an hsa, you don't use it to pay your medical bills. You let it grow and compound tax free. So it's there for later years when your overall medical expenses tend to be higher and you and your friends are talking about which doctor appointment you're going to that day, that's when you want to have that HSA money for.

[Caller]

I also feel like we just heard, I don't know, it was very recently someone said their parent or in law was had Alzheimer's and was in a facility in Mexico City. So wouldn't you say this is happening more and more? You've talked about Panama and other places, like definitely go visit way before you retire there. Check out the facilities. Like, you know, I worry that people are just looking online at places, right? I mean, what.

[Clark Howard]

Yeah, you want to, you want to have eyes on the ground, you want to visit places you're considering. And a lot of places can look good in online videos, they can look good on their websites, they can look good in physical packets, they give you or send you. There's nothing like experiencing a facility on the ground. But the biggest medical tourism with senior living is actually moving within the United States. Because there are certain areas, like where you grew up in New York, where you went to college in Massachusetts, that care in any kind of senior facility is the most expensive, I think, anywhere in the United States. And it's common that people in the Northeast and New England, if they're going to a continuing care retirement community or any form of assisted living or whatever, they go to a complete other part of the country where the cost of care is a lot lower. And you know where else it's become very expensive?

[Caller]

Where?

[Clark Howard]

The state of Florida. Oh, makes sense, right?

[Caller]

Yeah.

[Clark Howard]

So many early retirees moved to Florida. They get older, they need care. And the system's bursting at the seams in Florida. And so Floridians who need care are finding that they need to go somewhere else in the country to find affordable care. And I want to thank you so much for joining us today on the podcast. I hope that you've heard something today that is useful to you in your life, for a family member, for a friend. And know this is all about everything we do here is all about your empowerment with knowledge that gives you the ability to stretch every dollar to make better informed decisions with various things that you do with your wallet. It's so common that we react to things based on stress, fear, emotion. When it comes to things that require financial decisions. The more you can step back and as best you can, make a reasoned decision based on facts and gathering more information you can trust, the better it will be for you. With our whole goal being you learning ways to save more, spend less, and avoid getting ripped off. Have a great rest of your day.