We are about to purchase a TIPS ladder to add some inflation-protected fixed income to our social security. My desire here is "set it and forget it," so I want to be very clear about our plan when the TIPS income stream hits those missing years, 2035-2039.
If we follow the schedule at tipsladder.com, we will be front-funding the first three years of the gap. This means that we will get a bolus of money from those maturing bonds in 2034, three "extra" years of principal. So far, correct?
What is the absolute easiest plan to make ahead of time for this?
Do people like me (reluctant participants in investment activity) assume that we will be of sound financial mind to do something smart with that 2034 bolus of money, something that will approximate for 2035, 36, 37 what the TIPS ladder is meant to do (provide steady, inflated-protected income)? If so, what seems like the easiest smart thing to do with that money at the time? Is there one obvious path?
The only other option appears to be taking action way ahead of time, 10 years in advance of each of the gap years, by selling 2034 TIPS and buying 10-year TIPS in 2025, then again in 2026, etc.
That sounds annoying.![:)]( "Smile")
Same question but in reverse for the 2040 TIPS that are bought to sort of post-fund the years 2038 and 2039...no income from maturing bonds those years, so to get that income in '38 and '39, we'd have to be on top of this enough to sell 2040 bonds before maturity to fund those years...am I understanding this correctly?
NB Thank you in advance if you are not sending me to one of the mega threads discussing the details of all the ways to look at these gap years. These seem to be written by people with a higher tolerance for thinking about this than I have.
If we follow the schedule at tipsladder.com, we will be front-funding the first three years of the gap. This means that we will get a bolus of money from those maturing bonds in 2034, three "extra" years of principal. So far, correct?
What is the absolute easiest plan to make ahead of time for this?
Do people like me (reluctant participants in investment activity) assume that we will be of sound financial mind to do something smart with that 2034 bolus of money, something that will approximate for 2035, 36, 37 what the TIPS ladder is meant to do (provide steady, inflated-protected income)? If so, what seems like the easiest smart thing to do with that money at the time? Is there one obvious path?
The only other option appears to be taking action way ahead of time, 10 years in advance of each of the gap years, by selling 2034 TIPS and buying 10-year TIPS in 2025, then again in 2026, etc.
That sounds annoying.
Same question but in reverse for the 2040 TIPS that are bought to sort of post-fund the years 2038 and 2039...no income from maturing bonds those years, so to get that income in '38 and '39, we'd have to be on top of this enough to sell 2040 bonds before maturity to fund those years...am I understanding this correctly?
NB Thank you in advance if you are not sending me to one of the mega threads discussing the details of all the ways to look at these gap years. These seem to be written by people with a higher tolerance for thinking about this than I have.
Statistics: Posted by floridasandy — Fri Aug 16, 2024 8:22 am — Replies 2 — Views 205