Thanks! This is so detailed and thorough.Short term TIPS are not going to help so much (right now) with a 10 year ladder that you presumably are not going to tap for a few years, too much reinvestment risk and short rates tend to be the most volatile. The 7 year bridge I'm funding to be tapped starting in 4-5 years is mostly SCHP (6.5 year duration) with a little LTPZ (18.5 year duration) to bring the average duration to around 8 years. As time passes a while adjust the duration shorter every three months. At the outset of retirement this will be mostly STIP with a little SCHP mixed in to bring the average duration to ~3.5 years. If my 457 let me hold individual TIPS, I would just do that instead. Also do a tax-equivalent yield calculation on series I savings bonds using you presumed retirement marginal tax rate, they could be a useful option here for partially funding this, particularly for taxable investing.I like the bridge to SS idea, but having trouble implementing this.
Recent changes:
1. switched from vanguard 2030 to 2025. Better AA and introduction to TIPs within the fund.
2. Directing taxable savings to CA long term muni bond fund.
I’m aiming for 10 years expenses in my taxable account as a bridge til SS.
I have 5 years expenses in foreign funds. One year of expenses in the CA long term munis.
I’m planning to continue building out the CA long term munis and hope to get close to my bridge goal in a few years.
Should I think about more TIPs? If so, why & in which account?
Eg. VTIP fund in taxable?
If possible I would hold the TIPS (bonds or funds/etfs) in tax-advantaged accounts especially since your marginal bracket makes munis worthwhile over treasuries. If your Roth space is large enough, I would even use a portion of it for these TIPS. You could even adopt a hybrid approach and hold the last 5 years of expenses as TIPS in tax-advantaged and fund the first 5 as you are doing. In general the further off the expense, the more I would want the fixed-income dedicated to funding it to be inflation protected.
I need to do more homework and learning. These are the areas I have little knowledge and think I’m missing out. I appreciate this thread!
Statistics: Posted by Wannaretireearly — Fri Dec 20, 2024 1:02 pm — Replies 3789 — Views 921514