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Forever Stamps as an End to Postage Hassles

Physician's Money Digest, July 2007, Volume 14, Issue 7

In Spring 2007, the US Postal Service introduced its new Forever Stamp, a stamp that is usable for mailing up to 1 ounce of first-class mail, no matter how much the price of a first-class stamp may rise in the future. Knowing that the rate of first-class stamps has consistently risen over time, most recently in May, the temptation may be to run out and start hoarding these stamps right away.

However, Newsweek suggests that it's all about timing. Because the Forever Stamp will be released at the new rate increase of 42 cents, buying Forever Stamps makes most sense when purchased right before the next postal-rate increase to ensure a return on your investment. Newsweek states that in order to make the same return on Forever Stamps as you would on after-tax earnings on a money-market mutual fund for someone in the 30% tax bracket, stamp prices would need to increase another 3 cents in just 2 years and keep increasing a few pennies every couple of years after that. So, it appears, speculating in Forever Stamps might not be the windfall you're hoping for, but if stamp rates rise again, you won't lose money.