We are newly retired, and in a separate thread (viewtopic.php?t=424119), I had floated the partially formed plan for the fixed income portion of our assets. It included having a ladder (CD, TIPS, or other treasury--all held to maturity) to bridge us until we both claim Social Security in a bit over 5 years. I also mentioned some hesitancy regarding TIPS, due to insufficient knowledge. Five or six years of expenses is a lot to lock into an investment that you don't know well. More recently I've been thinking about putting half of our required annual expenses into that TIPS ladder, and using CD or non-TIPS treasury for the rest, or even something non-laddered like money market.
I had a lot of knowledgeable and insightful responses in that prior thread, but what surprised me was that a couple of people said they didn't think TIPS were necessarily appropriate for a 5 year ladder. I had so many questions on a variety of topics embedded in that single thread that I didn't focus on elaboration as to why they were tepid on TIPS (going to copyright that phrase...) for my scenario. Hopefully this narrower inquiry will elicit some additional insights on this topic.
A related, but different question, is how can I determine if TIPS are still a "good deal"? I have gotten a general sense that TIPS (of ??? duration) used to be a bad deal, then recently (a few months ago) were a very good deal, and that now they are less of a good deal. But, I don't really know what metric to apply, nor if I will be labelled with the dreaded scarlet letters -- "MT" (Market Timer).
I had a lot of knowledgeable and insightful responses in that prior thread, but what surprised me was that a couple of people said they didn't think TIPS were necessarily appropriate for a 5 year ladder. I had so many questions on a variety of topics embedded in that single thread that I didn't focus on elaboration as to why they were tepid on TIPS (going to copyright that phrase...) for my scenario. Hopefully this narrower inquiry will elicit some additional insights on this topic.
A related, but different question, is how can I determine if TIPS are still a "good deal"? I have gotten a general sense that TIPS (of ??? duration) used to be a bad deal, then recently (a few months ago) were a very good deal, and that now they are less of a good deal. But, I don't really know what metric to apply, nor if I will be labelled with the dreaded scarlet letters -- "MT" (Market Timer).
Statistics: Posted by PerfectName — Sat Feb 17, 2024 8:06 pm — Replies 3 — Views 398