How to Replace Lost Savings Bonds
QUESTION: Is it possible to obtain replacements for lost U.S. Savings Bonds? And when is the best time of year to cash in savings bonds?--H.J.K. and T.W.T.
ANSWER: If you keep good records, you could have a replacement in two or three weeks. Otherwise, the verification and replacement process could take months.
Savings bondholders who know the serial numbers on their lost bonds need only go to their local bank, ask for the appropriate form and send it to the Bureau of the Public Debt. The bureau says it usually requires two to three weeks to verify the serial numbers and issue a replacement bond.
If you don’t have a record of the serial numbers, your chore--and the bureau’s--is considerably more laborious. To replace the lost bonds under these circumstances, you should know the approximate month and year that the bond was issued, whose name appears first on each lost bond and the exact way that name appears, the Social Security number of the name appearing first on the bonds, the street address and city shown on the registration, the denominations of the missing bonds and the number of lost bonds.
All of that information should be sent in a letter to the Bureau of the Public Debt, Parkersburg, W.Va., 26106-1328.
If you can answer all of those questions, the bureau’s search and replacement process will take four to six weeks on average. If you can’t--you aren’t alone. The bureau, whose entire fourth floor is devoted to the verification and replacement of missing savings bonds, says that, because so many people receive savings bonds as gifts, the record-keeping process is haphazard at best.
A grandfather may remember that he bought the savings bond for his grandchild. He may even remember the face value of the bond and the year in which he bought it. But he is rare, the bureau says, if he remembers whose Social Security number and street address he gave the order taker.
Similarly, bondholders who received bonds as gifts when they were children often are mystified when told that the bonds aren’t registered in their names. They often don’t know who bought the bonds for them.
If you, too, lack such pertinent information, you can expect the verification process to be long and frustrating and possibly non-productive in the end. But if that doesn’t discourage you, write the bureau a letter anyway--even if you don’t have all of the answers to the questions listed above.
As to your second question, there are two ideal days every year to cash in your savings bond. Twice a year, the redemption value of the bond increases. This increase in value, which is paid only when the bond is redeemed, represents the accumulated interest. The day the redemption value increases--check the information that came with your bond for the dates--is the best time to cash in the bond.
Q: I am interested in getting a loan from the Small Business Administration. Do you know what the qualifications and maximum loan amount are? And where do I go to inquire about borrowing money?--C.E.C.
A: Businesses that meet certain size and financial standards may borrow up to $500,000 from the federal agency, which the Reagan Administration wants abolished. The SBA will lend money to qualifying businesses with up to 500 employees. But most of its loans go to businesses with fewer than 100 employees.
Before you request a loan, make sure you have developed a business plan and have thought through how you intend to repay the borrowed money. SBA loan agents also will delve into your background, your character, your finances and the collateral you intend to put up as backing in the event that you should default on the loan.
In other words, the agency will ask all the usual lender questions and more--since your family banker undoubtedly knows you better than the SBA does.
To prepare for the interrogation, you might consider going to one of the SBA’s free workshops. For details, call your local SBA office.
When you’re ready to ask for the loan, your best bet is to check with your banker to see whether he participates in the SBA loan program. While the SBA does make some direct loans, the vast majority are made by banks with the SBA guaranteeing up to 90% of it.
For small businesses, that’s the beauty of the SBA program. Banks on their own often won’t lend money to start-up businesses or small struggling ones because they’re considered too much of a credit risk. Many have no business track record and lack the collateral available to a big company. But if the SBA is willing to guarantee the bulk of the borrowings, the bank is less hesitant.
So why does the Administration want to eliminate the agency, created three decades ago to encourage new ventures and help small businesses compete with large ones for credit? What some regard as providing a needed lift to entrepreneurs, the Administration views as a handout to weak companies that will eventually fail anyway.
Q: I am 70 1/2 this year, which means I must begin withdrawing money from my IRA by Dec. 31. My wife, however, is only 54 and doesn’t work. Since I am still working, can I contribute money to a spousal IRA?--G.C.
A: Assuming your work and marital status don’t change between now and the end of the year and you file a joint return, you are permitted to contribute as much as $2,000 to a spousal IRA.
As you say, the cutoff point for contributing to your own IRA is the year in which you reach age 70 1/2. But taxpayers who continue to work beyond that age are allowed to make a contribution--to a spousal IRA--if they meet certain tests. At the end of the year for which they make the contribution and take the tax deduction, these taxpayers must still be married and working, their spouse must be younger than 70 1/2 and not working and they must file a joint return.
So if your circumstances don’t change, it is conceivable that you could continue to contribute as much as $2,000 a year for the next 16 years.
Debra Whitefield cannot answer mail individually but will respond in this column to financial questions of general interest. Do not telephone. Write to Money Talk, Business Section, The Times, Times Mirror Square, Los Angeles 90053.
