Same. And that's why I really don't like to use the term "LMP". I'm not designating the dollars from my TIPS to be assigned to any specific liabilities. I certainly wouldn't do that for SS benefits. I just want the predictable, inflation adjusted stream as a floor of income. The way the last several years went while working, this would actually be an improvement.I've extended my ladder to 2053, and next month will add 2054. Why? Because I want a set it and forget it approach to annual income. I also have fractions of my portfolio in other bonds and in stocks. TIPS are part of my entire portfolio and the goal for them is to provide real income for the rest of my and my spouses lives. Could stocks do that too? Maybe. But for me, a TIPS ladder is easier, lower stress and guaranteed to do exactly what I want them to do. You cannot say the same thing about stocks. YMMV.[
So stopping my list at 2 for the moment, I'm having trouble grasping a reason that it would ever make sense to extend TIPS beyond say 20 years, unless tied to some kind of contractual-type liability for instance...?
More insights welcomed and appreciated.....
Wrench
As to why go past 20 years? I know several people who stop at 20 years citing the same reasoning about stocks held at least 20 years. It's understandable and can be justified like so many things with investing.
My entire reason for including TIPS as an income stream that lasts as long as we last (hopefully) is that it moved a large chunk of our spending capacity from the "probabilistic" column to the "deterministic" column. While I appreciate the fact that stocks, historically, have always had at least a 0% return if held 20 years, there's nothing guaranteeing this in the future. So I preferred to secure a base level of spending capacity that is low/no risk. And while it can't cover all spending for us, it's good enough and puts less strain on what we need from our stock holdings.
YMMV.
Cheers.
Statistics: Posted by dcabler — Fri Jan 12, 2024 5:15 am — Replies 2516 — Views 356584