I finally rolled my 401k over to an IRA and I'm ready to build my TIPS ladder to bridge to SS.
Side note: I've needed to wait until 2024 to do the rollover to take advantage of NUA of company stock in a 0% LTCG year. In the meantime, I kept the 401k funds I was going to use in FIPDX - Fidelity TIPS fund with a duration of about 6.5 years. Over the last year, I would use tiplsladder.com to see what my ladder would cost. Then divide that by the price of FIPDX. The number of shares I needed remained pretty constant, so I was pretty comfortable just waiting until I could build my ladder.
I listened to this podcast on the iShares iBonds ETF - https://www.theretirementandirashow.com ... tips-etfs/ - the ETFs definitely have an advantage for taxable accounts in paying out the inflation adjustment that is taxed, and an a advantage for IRAs in being able to reinvest the small distributions. They did caution against trying to buy large amounts of the ETF as the daily volume is fairly low.
This would be easier than buying the TIPS through Fidelity and might be worth the 0.10% EF. I would reinvest the monthly/quarterly distributions. I'm not sure how to figure out how to get a specific real $ each year with the ETF.
I wondered if anyone has already done this and if they are comfortable with how things are going so far.
Is there a way to compute the real YTM given the ETF price? Their site has a calculator that will estimate nominal YTM, but that makes it hard to compare to a TIPS. If the YTM is close enough to a TIPS ladder, I would consider using the ETFs.
Side note: I've needed to wait until 2024 to do the rollover to take advantage of NUA of company stock in a 0% LTCG year. In the meantime, I kept the 401k funds I was going to use in FIPDX - Fidelity TIPS fund with a duration of about 6.5 years. Over the last year, I would use tiplsladder.com to see what my ladder would cost. Then divide that by the price of FIPDX. The number of shares I needed remained pretty constant, so I was pretty comfortable just waiting until I could build my ladder.
I listened to this podcast on the iShares iBonds ETF - https://www.theretirementandirashow.com ... tips-etfs/ - the ETFs definitely have an advantage for taxable accounts in paying out the inflation adjustment that is taxed, and an a advantage for IRAs in being able to reinvest the small distributions. They did caution against trying to buy large amounts of the ETF as the daily volume is fairly low.
This would be easier than buying the TIPS through Fidelity and might be worth the 0.10% EF. I would reinvest the monthly/quarterly distributions. I'm not sure how to figure out how to get a specific real $ each year with the ETF.
I wondered if anyone has already done this and if they are comfortable with how things are going so far.
Is there a way to compute the real YTM given the ETF price? Their site has a calculator that will estimate nominal YTM, but that makes it hard to compare to a TIPS. If the YTM is close enough to a TIPS ladder, I would consider using the ETFs.
Statistics: Posted by RyeBourbon — Thu Jan 25, 2024 5:10 pm — Replies 3 — Views 305