I'm a big fan of TIPS. Not because of any recent event that folks are speculating about. I'm a fan because, as noted above, inflation always has the potential to negatively impact retirement spending.
Do you have a yearly amount you want to withdraw from your fixed income asset allocation?
If so, build a TIPS ladder of individual TIPS at a brokerage like Fidelity, Vanguard, or Schwab.
Or... purchase a iShares iBonds TIPS etf fund that matures on a specific date. https://www.ishares.com/us/strategies/b ... nd-ladders
Or... build a TIPS portfolio that uses two TIPS funds of different maturities that matches your investment horizon. This is the one that requires a bit more work to manage since your investment horizon decreases steadily over time (the math is shown below).
H = Desired investment horizon (years remaining to withdraw from portfolio/2)
L = Duration of the longer term fund (years)
S = Duration of the shorter term fund (years)
The percentage of money in TIPS to allocate to the shorter duration fund is (H-L)/(L-S)*100
Do you have a yearly amount you want to withdraw from your fixed income asset allocation?
If so, build a TIPS ladder of individual TIPS at a brokerage like Fidelity, Vanguard, or Schwab.
Or... purchase a iShares iBonds TIPS etf fund that matures on a specific date. https://www.ishares.com/us/strategies/b ... nd-ladders
Or... build a TIPS portfolio that uses two TIPS funds of different maturities that matches your investment horizon. This is the one that requires a bit more work to manage since your investment horizon decreases steadily over time (the math is shown below).
H = Desired investment horizon (years remaining to withdraw from portfolio/2)
L = Duration of the longer term fund (years)
S = Duration of the shorter term fund (years)
The percentage of money in TIPS to allocate to the shorter duration fund is (H-L)/(L-S)*100
Statistics: Posted by dogagility — Tue Nov 12, 2024 5:24 am — Replies 5 — Views 491