All this applies to bond funds as well?I guess the bond ladder seems problematic to me. I have no idea how long I will live, so how do I know how long to make the ladder? I could just make the ladder extra long so that I am almost certain to died before the ladder is used up?
Then there is the factor of uncertainty. What if my assumptions were wrong and I miscalculated how much money I need? What if there are lumpy expenses like replacing a car, etc. Would one have some funds outside of the ladder to cover for the unknown?
I also feel that ladders are not so good during the accumulation phase. I feel that a ladder should not be build until you are near your goal or near retirement. During accumulation, your bond fund may rise or fall, which you will rebalance.
For me a TIPS ladder will be part of creating an income floor/LMP. Which will be an amount I, virtually guaranteed to spend yearly. I see no need to make the perfect the enemy of the good
Statistics: Posted by ScubaHogg — Sat May 25, 2024 12:58 am — Replies 80 — Views 5023