How And Why To Build A TIPS Ladder In Retirement

[@redhounds]

I often see people say that they would never build a tips ladder like this because the money is all gone at the end of the ladder. As you showed in the example, with the current rates if a person wanted to convert 1 million of their portfolio to a guaranteed income stream of $40,000 per year "real," they would still have about $160,000 left that they could invest as aggressively as they wanted. At the end of a 30 year ladder, that $160k will have grown to almost $700k real at 5% real and over $1.2 million real at 7% real. With a 30 year investment timeline, these numbers are certainly more reasonable to hope for than they would be with a shorter horizon. The current rates make a TIPS ladder much more appealing than it was just a few years ago with the high likelihood of still having $700k (REAL!) or more available at one's current age + 30 in case they are blessed with longevity and the TIPS ladder still retains value for their heirs if they die early (unlike most immediate annuities). For people who want to build a guaranteed income floor with a chunk of their portfolio, it's easy to argue that right now is historically a pretty good time to implement their plan. Thanks for the great content!

[@Sthithapr]

Thank you Rob. You are the only one I know who is enabling people to do their own financial management. This gives peace of mind.

[@RetiredAndHappy-]

"Friends don't let friends buy TIPS in a taxable account!" 😂😂😂 Great video and I like the idea of a guaranteed stream of income. I'd love to see a video where you compare the pros/cons of a TIPS ladder vs. an annuity that has a COLA.

[@Someone-tn8ur]

Thank you for this video. I've been a 100% S&P 500 guy for the past 26 years and am now approaching early retirement and want another vehicle for a steadier income stream. This video has given me something to think about and figure out what my transition to retirement will look like.

[@adlerpaul]

Thanks Rob for teaching me new information. Does it makes sense to build a 20 year TIPS ladder (secondary market) by dollar cost averaging since interests rates are varying?

[@spokesstrings6254]

Thanks for the video Rob. I'm planning on delaying social security until 70 and am interested in building a fixed income bridge until that time. The idea of using a TIPS bond ladder to do that is interesting. I also liked the idea of making it simple by using the iShares iBond ETFs. But after reading the prospectus for one of the ETFs, I'm a bit leery. The ETF would be just like any bond fund and may need to buy or sell securities as needed. Also, in the final months of the ETF the securities will be liquidated to cash or cash equivalents, which may earn little or nothing at all. You could try to sell the ETF on the market before this happens, but if there are few buyers the price may be low. In general I like the idea, but I would just feel more comfortable buying the TIPS myself and holding them to maturity. It would be interesting to watch the performance of these iShares ETFs and see how they do.

[@anthonyv8]

I’m just now poised to build a 9-year TIPS ladder as a Social Security bridge in my IRA account. I was wondering if you can outline any pros and cons between buying the TIPS directly through a broker (in my case, Schwab) vs the BlackRock i-bonds funds, aside from the relative ease of buying the ETF (pro) and the 0.1% BlackRock management fee (con.) Thank you for an excellent summary!

[@jaythefox]

As an Australian using our equivalent of TIPS (eTIBs), I think tax might not be as bad as people make out. 1. You're only taxed on the inflation adjustment, not on the un-adjusted cash component 2. By claiming a tax loss on assets that declined in value (e.g. stocks) you can reduce your taxable income 3. If you live a modest lifestyle, closer to the tax-free threshold, you can minimise tax to around 7-8% 4. If you live a modest lifestyle, you're probably less exposed to inflation It's true that TIPS are not tax efficient, but that doesn't mean they can't function as a decent hedge against stock losses.

[@Mourik131]

Thanks never heart about tips before. I recently changed my portfolio to a 90/10 portfolio. Really happy with it. VUSA and VUTY. I have. Low cost both 0,07% cost.

[@jessicamcneil5624]

Great presentation. I’m 77 and have bought Ibonds thru TD, but no Tips. I think at my age, 10 yr TIPS is about as far out as I need.

[@LauraEKellyCreative]

This detailed TIPS ladder how-to video and the clarifying comments below are SO helpful. Thank you.

[@michaelevans5328]

Thanks for this excellent video. I’m planning to build a TIPS ladder once I rollover my 401k in a few years, assuming TIPS yields remain favorable. It addresses market risk, inflation risk, and sequence risk and leaves enough money leftover in a risk portfolio to address longevity risk, long-term care risk and legacy goals. Sustained high inflation is unlikely but scary.

[@hodoren]

Thanks for the great video. Can you clarify, in the 30 year tips ladder where we want a 40k income, is the income 30 years from now going to be the inflation adjusted value if $40,000?

[@yestohappiness2721]

Great video - I learned new things. Two questions: 1) if we buy tips in treasury direct and not in an IRA, then we will get taxed on all the interest we get every year, isn't it? 2) if again we buy in TD, what happens if the owner of a 30yrs TIP dies - b/ in Vanguard/Schwab/Fid I can put a beneficiary in but in Treasury Direct I have no clue if one can do that... so how to deal with that issue, do you know? (I have 10 yrs tips maturing in 3 yrs, and 5 yrs tips maturing in 4 yrs in TD).

[@sandrakaylindsay952]

Excellent presentation. I like your idea of a TIPS ladder for funds guaranteed to provide $20,000 over Social Security, then investing the rest. This would be similar to having a $20,000/year pension plus an IRA.

[@russellwild2771]

Good stuff, Rob. But I'm left scratching my head just a little bit....If I take the $841,309 that would be required to build a $40,000/year constant-dollar TIPS ladder and I instead buy an immediate annuity (at age 65) with a 3% COLA and 10 years certain, I could get a payout of $50,748 the first year (6.03%), then bumped up 3 percent every year for the rest of my life. If I die between year 10 and year 30, my kids get a bigger inheritance with the TIPS ladder, but other than that, it SEEMS (provided inflation doesn't run higher than 3 percent) that the immediate annuity is the better option...yielding me 27 percent more.. Am I missing anything?

[@michaeltilson-h2z]

For the bond portion of my IRA I have mostly used Vanguard bond funds, but now wonder about moving that money into individual TIPS and regular Treasuries. What is your take on the value of bond funds/ETFs vs individual bonds? I don't mind the extra work of buying individual bonds.

[@hughmcwilliams7153]

Thanks Rob, this was very helpful; I'm a few years away from retirement and set-up a TIPS ladder in my IRA.

[@adnerbnomrah9076]

May be a dumb question,but would having funds in a TIPS bond fund (I.e., FIPDX) be similar to building a TIPS ladder as bonds would be bought and sold possibly in a similar manner as you describe?

[@callialo]

My understanding is that the only way to completely protect your principal/initial investment amount is by buying and holding a bond to maturity, like you do when building and adhering to an individual bond ladder. With a TIPS ladder it obviously also ideally protects against inflation risk. Holding a bond fund is not quite as guaranteed because they obviously aren't aligned with your particular time table- they are just buying and selling bonds in accordance with whatever metrics they have in place at the moment, and the fund could be down when you need to withdraw money. The funds he specifically shows in the video appear to avoid that as they are buying and holding the bonds to maturity it sounds like, and have a very specific maturity date range that, as long as that matches when you need to withdraw the money, should work similarly to you buying and holding a bond to maturity and then tapping into the money/reedeming the bond. Again though, just a standard bond fund/ETF probably doesn't do this and the fund you mentioned definitely doesn't- as Fidelity's description of the fund states under the risk section: "Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible."

[@philruehlen]

Rob some of the best content I have seen in awhile! I have read all the John Rekenthaler articles on Morningstar and now I understand a lot more! Thanks as always!

[@rob_berger]

His articles are excellent. Thanks!

[@davearey4922]

One could buy a TIPS ladder for $20,000 a year for 20 or 30 years and a deferred income annuity - in an IRA a QLAC - when the TIPS ladder is done. TIPS are an under utilized security in retirement income planning.

[@rob_berger]

Nice idea.

[@georgelien]

Rob 😂 Can you do a video on this ?

[@bobanderson8873]

This s the first time since KZbin first came out that I have left a comment. From one attorney to another, thank you for your videos. You have a gift for explaining complex matters in a straightforward manner and I always learn a lot from watching you. I also appreciate all the links you provide. Keep up the good work!

[@dl777]

When trying to buy the TIPS bonds on fidelity it gives a list ask prices with different yields (related to min qty) and the price for the lower quantities (20,30,40, etc) is lower than the Show Details amounts listed on the tipsladder tool. 3.23% ask yield for min qty 100 versus 3.175% for min qty 1 which is what I would need since I only need qty 40. Would this make iShares closer in price to buying individual bonds since they may get the best yields since they would be purchasing large quantities? IBIA for Oct 2024 real yield is 4.4% and Jan 2025 individuals would be 3.175%. That is the closest date lineup I see. Thanks!

[@johndinning2068]

Great video. I understand that the phantom tax is only charged at the federal level and not at the state level, so if you hold TIPs in a taxable account you get the state tax benefit. However, if you hold in an IRA the withdrawals would be taxed as income and therefore be taxed at both the federal and state level. Have you looked at what holding in taxable vs tax-deferred would look like taking this into account?

[@ideapowerfulweapon]

Neat thing about TIPS is you know the deal at the time of purchase on TIPS. Also TIPS is your own created Social Security 2.0.

[@plainfielddentist]

Perfect! Great explanation

[@dl777]

When I use the tipsladder tool to create a five ladder to bridge until age 70 the data looks wrong as I would have to purchase a higher amount of bonds for the later years than the earlier years. I would think it should be ~2+% per year less since this is supposed to be providing 2+% of income after factoring in inflation. For an inflation adjusted 60K payout each year the purchase amounts are: $50.3K, 55.1K, 52.4, 56.0 and 64.6K (years 1 through 5 starting in 2024 and ending in 2029). Is the tool wrong?

[@dl777]

I asked Kevin at TIPS ladder and his response was: "It is because the income in earlier years comes partly from interest paid by bonds maturing in later years. Therefore fewer bonds are needed in the earlier years."

[@jakesinger777]

Does Roth IRA work as a retirement account to tax shield TIPS inflation adjustments?

[@Milhouse77BS]

Thanks! I wish my brother had seen this before. He bought a bunch of tips last March.

[@ghazikerkeni7031]

I have a question: can this be done also by investing in tips via ETF like TIP for example? Since there is no maturity and they can go down so is it still less risky then for example Stocks mutual fund or regular bonds mutual fund?

[@remington2277]

Right now in my IRA brokerage account, I’m laddering T-Bills and may eventually move into T Notes and Bonds when yield curves get above water. But, it seems the tax exempt advantage of the Treasuries will be lost - come the time I move money out of my IRA. So is this where TIPS may offer an advantage in a retirement account or does somehow the interest earned on T-Bills while in an IRA account maintain their tax exempt status when withdrawn into regular income?

[@tdc3rd]

This is great info! Bengen’s 4% guideline assumed the bond allocation earned 5% each year, so wouldn’t adherents need to find a TIPS ladder yielding at least 5% to “stay true” to Bengen’s guidance? Maybe one way to use a tips ladder is as your complete bond allocation. Say you felt like 60% equities and 40% bonds was the ticket for you. You could create a tips ladder (within your IRA) returning 5% (no idea if you can with todays rates), fund it with enough to make it 40% of your portfolio, and you’re done. Are there any holes in that approach?

[@albertprice8414]

Very interesting! I had wondered about a three year ladder to be the cash bucket? So placing it in a regular IRA to be the cash for the first 3years? Thank you.

[@pavlentey]

What do you recommend for investment which is not held in IRA account?

[@davearey4922]

@Rob with TIPS, is the annual inflation rate of interest that is applied to the bond compounded interest or simple interest? What measure of inflation (eg CPI) is used for the rate of inflation?

[@rob_berger]

They use CPI-U for the inflation adjustment. In terms of interest, they pay ever six months based on the adjusted principal balance. See treasurydirect.gov/marketable-securities/tips/

[@liete2012]

Is now a bad time to buy bonds?

[@kenhutchinson4782]

What is better, a tips fund or creating a tips ladder? Regards.

[@timpederson8283]

Really great video. Very informative! Thanks!

[@jimlampe2546]

I am new here Rob and I must say your style really speaks to me. We all learn differently but for me I really understand these concepts much better so thanks so much for that. I am 66 and planning on rolling over 50% of my 401K in ROTH investments over the next 4-5 years. Would TIPS generally speaking be a good way for me to go? I know I will be exposed to taxes for the rollover years but then good. Your thoughts? Thank Rob.

[@2023Red]

Outstanding! I had considered TIPS ladders. Now, I am not. Thanks for the info!

[@NameWithheld-nm1es]

I'm only a third of the way through the video; however, I have yet to hear why I should go with a TIPS or nominal bond over CDs that are providing more than both right now. Why doesn't anyone cover that option in comparison?

[@bobby350z]

Question - How far into the future (starting yr) people buy these tips ladders? Say your plan to retire in 5 yrs, do you buy now, next yr or when in the last working yr before retirement? Pros/Cons. Thanks.

[@coderider3022]

Seems to be a retirement -5 to +5 years for a ladder for sequence of returns risk when you have normal market. We are moving to a flat then normal yield curve so locking in the short term rates makes sense.

[@user-jobqyp-0fusnoe-8cocxU]

Hi Rob - Is a TIPS ETF (VTIP or TIPS) okay to buy in a taxable account? Will there be any tax issues similar to those with REITs? My husband and I are planning to retire within the next 10 years, and we currently have some bond ETFs. However, we are considering TIPS ETFs due to the direction the economy is heading. Thank you for everything; I'm a huge fan of yours!

[@Reem.Digital]

Hey Rob...can you review the brand new ishares life path target date ETF? How would the taxes work etc.. thanks

[@MILGEO]

I've heard that Vanguard doesn't charge a fee for purchasing Treasuries but requires the money to be in a sweep account at least a couple of days before the auction date. It seems like you should be able to build your own Treasury ladder expense free! That sounds better than a 10 basis point cost to me.

[@Mike-v1b1t]

Rob, could a roth ira fidelity investments brokerage acct purchase the ishares ibonds etf from Blackrock? If so, the interest would be non-taxable, correct? Thx, Mike

[@rickdunn3883]

@Rob Berger, what about using A Tips Fund inside an IRA?

[@rob_berger]

That's what I do. I'm comfortable with that, rather than building a ladder. But who knows, I may find a ladder to be a good solution down the road. I can't see building a 30-year ladder for us, but perhaps a shorter one.

[@jimo5758]

In an employer 401k plan, I cannot set up a ladder but can buy a open-end TIP mutual fund. At age 78, which open-end TIP fund should I buy?

[@redchevy3307]

How's would this ladder work when you're taking out RMD's instead of 4%? What if the TIPS bond that matures that year doesn't cover the RMD for that year? Any ideas?

[@dl777]

On the TIPS ladder detail screen is the "Yield to Maturity" after the inflation adjustment? For 2024 it would then be 4.482% plus the inflation percentage defined by CPI-U at that time.

[@pware9643]

The index tips uses is CPI-U, which last month was 3.2% looking back 12 mos. , They adjust their rate every 6 months.

[@kimappreciateslife]

I hear a lot of talk about doing a barbell of equities & treasuries. This way you are participating in both.

[@chasesigler1048]

Hello. I am 29 years old, and I would like to retire as soon as I can start drawing from my tax advantaged accounts at age 59 and 1/2. I may stay longer than that, but I'd like to plan on retiring at that time. Would it make any sense to start building a TIPS ladder now? By that I mean this year, and every year following this one, buying 30 year TIPS such that when I retire 30 years from now they start to mature? Is there any advantage to building it in this way? I don't want all of my assets in TIPS, but it would be really nice to have the bare minimum I need to survive each year in TIPS. Currently, I have about 30k in invested assets, ~98% in low cost stock index funds and ~2% in a bond index fund. I'm a bit behind for my age but that's just because I have spent most of the last decade getting my PhD. Now I am catching up by investing 19% of my income into retirement with an 8% match for an effective 27% contribution. I don't care about stock risks now since I have three decades to recover, but I imagine as I get older I will want some assurances that my money is safe.

[@djsnowpdx]

Man… if only an insurance company would sell me a variable annuity tracking a TIPS ladder like this! Then I’d have my inflation hedge and my longevity hedge in the same financial product!

[@illsig]

Would buying the blackrock ibonds tip etf solve the phantom income issue if purchased in a taxable account?

[@rob_berger]

That's a good question. I assume not, but I'm not a tax expert.

[@nateisright]

Excellent presentation, sir.

[@emilde12]

Would the results be better by just investing the 10,000.00 into a high yield savings account?

[@coderider3022]

YTM assumes your getting the same rate on coupon payments as the bond, if you buy a long ladder , what do you do with these payments for following years ? That’s really your issue with long term ladders especially if you’re buying at a premium with 4% interest etc.

[@frankchimento2080]

Very insightful vid Rob, thank you! Just retired a year ago, and this seems like a great way to allocate a small portion of my portfolio for income each year. Do you see any advantage of going with the iShares bond ETF ladder over a normal ladder?

[@TheDealHunter]

I'm also interested in opinions on this question. To me, the simplicity of building a ladder is much easier with the ETF. Unfortunately, you can only go out 10 years with the ETF at this time Another advantage is that you can reinvest the dividends (interest payment) into more shares.

[@rob_berger]

Well, it's a bit easier. You can buy one ETF for a given year rather than many individual TIPS bonds. But, you do pay 10 basis points and can only go out 10 years. So again, pros/cons with either approach.

[@adonisspjr8517]

Great vídeo, Rob! 👏👏 Which accounts are not taxable ? How to open them?

[@Someone-tn8ur]

The simplest is an IRA where you fund it from your rolled over 401(k) or direct funding. Pretty much any brokerage firm will help you with the process.

[@2023Red]

I am revisiting this lesson. Still confused. Could you do a new video on tip ladder with 30 year ladder, step by step? I have 500k and age 76.

[@johngrasing1715]

I keep watching your videos and you keep say 'Don't do this in a taxable account'. Do you have a video about what to do in a taxable account?

[@joemyers]

Per your comment at 24:18 ... it appears that blackrock has now added TIPS to their tool. ;) Way to go giving them the suggestion.

[@Ron322100]

Despite the fact that TIPS are backed by the full faith and credit of the United States Government, is SIPC ever necessary if purchased through a brokerage firm?

[@wd269]

@ Rob Berger - Did you say that if we bought $1 million of TIPS that cost $989k that at the end of the 30 years we'd only have $11k. Isn't a TIP a loan to the gov't where you get the interest every year and then the principal is returned at the maturity of the loan/TIP? So, for the first year's issue let's say, wouldn't you'd get the interest on the first year's TIP throughout the year and then, at the end of the year, you'd get your principal back on that issue?

[@rob_berger]

So with this TIPS ladder, you are spending both interest and the principal as it is returned to you each year.

[@wd269]

@@rob_berger - ah, that makes sense now. Thx.

[@austinprice1029]

What about a TIPS ETF ? Same principles? Same taxes in a taxable account? I'm looking to protect down payment money from inflation....

[@callialo]

My understanding is that the only true way to protect your principal is to buy and hold a bond to maturity. Since bond funds don't necessarily do this, there is a chance the fund could be down when you need to withdraw your money, and you could lose money. Although the funds he specifically shows in the video, unlike most TIPS ETFs, should avoid that as they are actually are buying and holding the bonds to maturity, and principal should be protected as long as the fund's published maturity date range is before or when you need the money, and you aren't taking the money out before then. Also bond yields and gains (especially if not municipal bonds) are usually taxed at your marginal income tax rate if they are in your taxable account rather than equities which are more taxed advantaged assuming you hold them for at least a year, as they are only subject to long-term capital gains, which is usually a lower tax rate for most people. This is why it is usually recommended that hold bonds in a tax-deferred account rather than a taxable account if possible. Although if you are comparing bonds to other short-term savings vehicles like high yield savings accounts (HYSA), money market accounts.(MMA), CDs, I believe they all have their interest earned taxed as income also, like most bonds. If you need your money to be pretty much completely liquid, you need to have access to it at any time, a HYSA, MMA, or no penalty CD are probably better options. You could also look into something like a Vanguard or Fidelity SIPC insured Money Market Fund (MMF) (the settlement fund in a brokerage account is usually a MMF). Whatever you choose, make sure you read the fine print, especially around how the APY calculations works, how money is protected, and the rules around withdrawing the money

[@davidroberts7996]

so many choices

[@royprovins7037]

TIPS ladder seem like a lot of maintenance especially when you get older

[@heythereitsmematt]

I'm confused when you say that at the end of 30 years you are left with nothing. Don't you get the principal back as each bond reaches maturity?

[@ChristopherForsyth]

Conceptually, with a bond ladder (TIPS or not) the principal you get back is part of the cash flow you are living on. So this is a version of a "spending down a nest egg" approach to funding retirement.

[@marksin515]

Part of each year's income is coupon payments from the various bonds in the portfolio, and part of it is from the bonds maturing that year. Maturing bonds turn into cash at maturity. So at the end of the whole thing, all you have at the end is the last year of income, which is one or zero coupon payments plus the face amount of the bond. I hope that helps.

[@KayKay0314]

That TIPS ladder site is amazing! I'm assuming the "real income" column is showing the buying power relative to the first year of the ladder (in the case of your example 2024). In 30 years, $40,000 in expenses in 2023 dollars may be the equivalent to something like $90,000 in actual 2053 dollars.

[@artmaltman]

Fascinating approach! Please factor in taxes. Thank you.

[@rob_berger]

Yes! Taxes are an important part of the analysis.

[@jayfram1]

Someone told me that TIPS only provide an edge if inflation is higher than expected when they mature. So if inflation comes in at or below what is projected, you are better off in a nominal bond. Any truth to that?

[@origamicrane685]

Since stocks usually beat inflation, why not make things a whole lot simpler and just invest your $1,000,000 or, better, $2,000,000 in a dividend stock fund like SCHD with a 3.4% annual yield. The value of the underlying stocks grows 8% on average, and your annual dividend payments go up every year as a result, even though the yield remains stable at 3.4%. AND, at the end of twenty years you have a huge pot of money as the underlying dividend stocks have appreciated considerably in value, vs nothing left at the end of the TIPS bond ladder.

[@cihant5438]

So what is the link to the tips ladder tool?

[@rob_berger]

What do you mean? The link is below the video.

[@cihant5438]

@@rob_berger sorry didn't see it at first..

[@centavologia6949]

Hi Rob. Great vídeo, very helpful. In some moment you mentioned about a link in Khan Academy but I was not unable to find IT in the description. Could you please provide the link? Regards

[@pware9643]

Interesting to look at income streams these days. In your example of tips you get 47,000 a yr with potential of some money in 30 yrs with high inflation. Payouts have gone up on immediate annuities along with current interest rates.. A 65 yr old can now get about 74,000 a yr with a million invested, for life, no money at death. And one could build their own muni bond basket with 20 yr munis now paying 5% tax free.. so $50,000 a year tax free... and get your million back in 20 yrs.

[@rob_berger]

Yes, annuity payouts have gone up. Keep in mind, however, that annuities are not adjusted for inflation. That's a big difference with a 30-year TIPS ladder. Of course, income annuities last for life, even if you live more than 30 years. So pros/cons with both.

[@josh9231]

You can also do a Tips ladder as part of your bond allocation while you are accumulating

[@kimappreciateslife]

What account is this tip ladder example in? You said not to have it in a taxable account so I’m guessing it’s an IRA

[@rob_berger]

An IRA is where I would keep TIPS.

[@kimappreciateslife]

@@rob_berger thanks! Lots of fixed income ideas to consider these these days!

[@wmcando]

Given the tax implications of TIPS, wouldn't it make more sense to create a traditional bond ladder? I'm thinking of someone who wants to generate risk free income on regular basis.

[@markwalters7498]

Question: Annual income stays fixed? Doesn’t this expose to a net reduction in real annual income due to erosion from inflation ?

[@rickblaine8667]

No. Think of it in terms of purchasing power. The real return with tips is the coupon rate plus an inflation adjustment so you are protected from erosion of your principal from inflation.

[@pomme4moi]

What about taxes?

[@mohammedbouayad415]

If you could include time stamps that would be greatly appreciated

[@rgarri6396]

If someone was talking the money to live off why does it matter if in a tax account?

[@dawightg9787]

How about calling the group the Berger Butts 😅

[@kkovler1]

tips never paid well in past, and they are tipped out now as inflation is headed down.

[@alcw625]

what makes you believe this? we have two major conflicts and a dysfunctional government. I can only see this be as a more inflationary period.

[@hkraytai]

I wouldn’t do 30 years TIPS but 10 years sounds good.

[@GeoMo52]

You say no money left in 30 years, I don’t have to spend it all. I could stash some annually for family or reinvestment, correct? And the dividends are just thrown into the Ira pot, so I’m just dealing with RMD’s?

[@NK-dd3qf]

The Blackrock TIPS ETFs do not have any distributions, whereas TIPS has a coupon payout every 6 months. How does this factor into the Laddering strategy?

[@rob_berger]

Are you sure they won't have any distributions? They are new, but I suspect they will have distributions in time.

[@NK-dd3qf]

Blackrock TIPS ETFs have this phrase under Performance & Distributions: "This fund does not have any distributions." @@rob_berger

[@K69671]

I am scratching my head here. So if I invest in 1mill into 30y tips and spend all 47k after 30y all money is gone. Now if I invest 1mil to 30y treasury (current 4.2%) and spend all interest each year than at the 30y I will get my 1mil back. What am I missing ?? How this is suppose to be better, even if the inflation goes up?

[@terrywawro2951]

No inflation adjustment.

[@wilma6235]

@RobBerger can you purchase tips by qusi number on fidelity?

[@texdevildog9174]

TIPS are great for the government, when the lie about inflation.

[@ProductionJunction1]

No you shouldn’t

[@maxshiraz3447]

Official Inflation is never going back to 2%. The infinite spending mentality of democrats has doomed us to a mega-inflation future. And "official" inflation is a hopeless joke - consumer expenses are increasing closer to 20% per year, not 2% or 3%

[@Someone-tn8ur]

" infinite spending mentality of democrats", ummm, you think Republicans are any better? We ran up the debt more under Trump than we did even under Obama :) And no, consumer expenses never went up 20% per year... don't be silly.