1. By purchasing individual bonds (whether TIPS or nominal), you can determine exactly how much you will get (in today’s dollars if TIPs; in nominal dollars if nominals) in each of the years you are planning for (2030 -2037). In contrast, and consistent with FactualFran’s comment, you can’t predict now how many shares of your bond funds you are going to have to sell each of these years to generate your desired amount of cash.
2. Right now, you can buy TIPS on the secondary market that mature each year from 2030 to 2034, but there are no TIPS available maturing 2035-2037. (Easy to buy on secondary market through vanguard or Fidelity, for example.
3. You could buy TIPS maturing in each of 2035 - 2037 at auctions in Jan 2025, 2026, and 2027. Again, easy to do through Vanguard or Fidelity. Alternatively, you could read some incredibly sophisticated advice elsewhere in this forum on buying extra TIPS maturing before and/or after those gap years.
4. Others here will tell you that, optimally, you should hold TIPS in a traditional tax deferred account. Your OP doesn’t say in what accounts you hold which assets. Indy any event:
a. You could still maintain your overall desired asset allocation by selling stock funds and buying TIPS in a traditional tax deferred account, while selling bond funds and buying stock funds in your taxable account, as necessary. Doing so will also help keep your RMDs under control due to slower growth rate of bonds. Stuffing tIRA with the bond portion of your portfolio is another lever that serves one of the same functions as Roth conversions.
b. HOWEVER: You want to be able to spend (or have the option of spending, depending on the stock market) the bond principal as the bonds mature those years, so a critical question is whether you would be able to withdraw from your tIRA in 2030-2037 without penalty - hence the question about your age.
2. Right now, you can buy TIPS on the secondary market that mature each year from 2030 to 2034, but there are no TIPS available maturing 2035-2037. (Easy to buy on secondary market through vanguard or Fidelity, for example.
3. You could buy TIPS maturing in each of 2035 - 2037 at auctions in Jan 2025, 2026, and 2027. Again, easy to do through Vanguard or Fidelity. Alternatively, you could read some incredibly sophisticated advice elsewhere in this forum on buying extra TIPS maturing before and/or after those gap years.
4. Others here will tell you that, optimally, you should hold TIPS in a traditional tax deferred account. Your OP doesn’t say in what accounts you hold which assets. Indy any event:
a. You could still maintain your overall desired asset allocation by selling stock funds and buying TIPS in a traditional tax deferred account, while selling bond funds and buying stock funds in your taxable account, as necessary. Doing so will also help keep your RMDs under control due to slower growth rate of bonds. Stuffing tIRA with the bond portion of your portfolio is another lever that serves one of the same functions as Roth conversions.
b. HOWEVER: You want to be able to spend (or have the option of spending, depending on the stock market) the bond principal as the bonds mature those years, so a critical question is whether you would be able to withdraw from your tIRA in 2030-2037 without penalty - hence the question about your age.
Statistics: Posted by Pdxcess — Sat Nov 09, 2024 4:00 am — Replies 6 — Views 723