What about the tax part if holding it in a taxable account, will the next year of Fidelity tax form do me a favor in calculating the floating current value for reporting the tax amount to IRS?TIPS can work for anybody who wants inflation protection for their assets.
Does TIPS only work quite well for people who plan to retire in 10~20 years? I saw people are building Tips Ladder for withdrawing back a specific amount each year for living expense supplyments.
Since I (in my early 40s)have to buy tips in a taxable account if I do, I should look at traditional treasury bonds instead of Tips， is it correct? With a taxable account, I will have to receive dividends and pay tax on the accumulated face value every year.
Retirees are particularly sensitive to inflation, since often their only source of income, other than SS, is what is generated by their portfolio. Thus, inflation protection is more of an issue, compared with people whose wages rise proportional to inflation.
And, I have a silly concern. Say, bought a face value of $1000 of tips in 2022, and the value increased to $1200 in 2023, so I paid income tax on the $200 in advance. Year after year, I paid some tax on the increased part.
But what if maturity in 2030, the value downs back to $1000 because of the deflation, does that mean I paid a lot of tax on the gains on the paper that I had never gotten.
Statistics: Posted by wa@22322 — Thu Dec 14, 2023 11:19 pm — Replies 20 — Views 1640