New tool for building a TIPS ladder

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kaesler
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New tool for building a TIPS ladder

Post by kaesler »

I built a TIPS ladder builder that is fairly easy to use. It can be used via a web interface here:

https://tipsladder.com

The first page is a form to specify your desired annual real income and the contiguous years for which you want to receive that amount. Submitting the form produces a TIPS shopping list.

There is a button to expand the tabular shopping list to provide more details about the bonds to be bought, cost breakdown per rung, and income breakdown per rung. You can also download all the details into a CSV file which can be read into a spreadsheet for further analysis.

I hope this is useful to Bogleheads. Let me know of any bugs that need fixing or enhancements you’d like.

This tool cannot yet make a “lumpy ladder”, one in which the income requirement varies from year to year. It also cannot yet integrate existing TIPS holdings into a new ladder. If there is enough interest it would not be too difficult to add those two features,
Last edited by kaesler on Sat Jan 07, 2023 10:05 pm, edited 2 times in total.
Normchad
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Re: New tool for building a TIPS ladder

Post by Normchad »

kaesler wrote: Sat Jan 07, 2023 4:55 pm I built a TIPS ladder builder that is fairly to use. It can be used via a web interface here:

https://tipsladder.com

The first page is a form to specify desired your annual real income and for which years. Submitting the form produces a TIPS shopping list.

There is a button to expand the simple table to provide more details about the bonds to be bought, cost breakdown per rung, and income breakdown per rung. You can also download all the details into a CSV file which can be read into a spreadsheet for further analysis.

I hope this is useful to Bogleheads. Let me know of any bugs that need fixing or enhancements you’d like.

This tool cannot yet make a “lumpy ladder”, one in which the income requirement varies from year to year. It also cannot yet integrate existing TIPS holdings into a new ladder. If there is enough interest it would not be too difficult to add those two features,
That is super cool! Thank you for sharing it.
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JoMoney
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Re: New tool for building a TIPS ladder

Post by JoMoney »

Very cool.. Thank you kaesler!
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Kevin M
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Re: New tool for building a TIPS ladder

Post by Kevin M »

Nice!

How does the algorithm used to build the ladder compared to the #Cruncher TIPS builder spreadsheet?
If I make a calculation error, #Cruncher probably will let me know.
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

Very similar I’d say. It works backwards from the final rung, using interest from later maturing bonds to reduce the need for principal in earlier years.

For years lacking a maturing bond it substitutes whatever available TIPS is nearest the start of the target year.

Some testing I did earlier gave very similar but not identical results to the spreadsheet.
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ObiQuiet
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Re: New tool for building a TIPS ladder

Post by ObiQuiet »

This is excellent! Thank you so much!!
learningtime
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Re: New tool for building a TIPS ladder

Post by learningtime »

Thanks so much! very helpful.
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Re: New tool for building a TIPS ladder

Post by deanmoriarty »

This is absolutely great, thanks!

One thing I’ve been thinking is if there is a way to account for taxes in the ladder. Specifically, if one is in a non-trivial tax rate, it is very likely that a substantial portion of the interest received will be consumed by taxes due to the phantom income, and the interest itself. I’m wondering if this warrants the creation of a different kind of ladder, one that tries to normalize the after-tax income.

I understand this might not be possible without guessing inflation and tax rates, but intuitively I would think this would mean buying more bonds for the earlier rungs, in order to compensate for the larger tax liability of the principal adjustments of the later rungs.
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stevewolfe
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Re: New tool for building a TIPS ladder

Post by stevewolfe »

Very nice! I also think this is a very useful tool as-is! Thank you for building it!

Thinking out loud,, I was wondering if a couple of other options for the "bond choice within year" parameter might let folks fine tune the ladder a bit? For example, some folks may prefer to select bonds with low coupon to minimize income while in a high tax bracket (for example), while others may prefer to purchase bonds with the lowest inflation factor available in a given year. These options would likely introduce more "lumpiness" in the maturity dates between rungs, but it may be helpful to allow the user to analyze multiple scenarios...

Thanks again!
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

deanmoriarty wrote: Sat Jan 07, 2023 7:52 pm This is absolutely great, thanks!

One thing I’ve been thinking is if there is a way to account for taxes in the ladder. Specifically, if one is in a non-trivial tax rate, it is very likely that a substantial portion of the interest received will be consumed by taxes due to the phantom income, and the interest itself. I’m wondering if this warrants the creation of a different kind of ladder, one that tries to normalize the after-tax income.

I understand this might not be possible without guessing inflation and tax rates, but intuitively I would think this would mean buying more bonds for the earlier rungs, in order to compensate for the larger tax liability of the principal adjustments of the later rungs.
I think this is more intended for TIPS ladders inside tax-deferred or tax-exempt accounts. Even briefly contemplating trying to deal with taxes in the same tool makes my head hurt.
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Cosmo
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Re: New tool for building a TIPS ladder

Post by Cosmo »

This is great. Thanks for sharing.

Cosmo
invest4
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Re: New tool for building a TIPS ladder

Post by invest4 »

:sharebeer

Thank you.
RubyTuesday
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Re: New tool for building a TIPS ladder

Post by RubyTuesday »

Great tool, thanks.

I would be very interested in the enhancement to handle two (or three) different income needs in different periods (e.g. higher income in early retirement until SS and/or pension).

Thanks again
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

RubyTuesday wrote: Sun Jan 08, 2023 6:27 am Great tool, thanks.

I would be very interested in the enhancement to handle two (or three) different income needs in different periods (e.g. higher income in early retirement until SS and/or pension).

Thanks again
Noted. Thanks for the vote.
apsuGuy
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Re: New tool for building a TIPS ladder

Post by apsuGuy »

Minor feedback: the detail screen could use a bit of spacing on the left side, it kind of bleeds off the screen a little, at least on mobile. Nice tool!
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

apsuGuy wrote: Sun Jan 08, 2023 11:53 am Minor feedback: the detail screen could use a bit of spacing on the left side, it kind of bleeds off the screen a little, at least on mobile. Nice tool!
Thanks. Will fix that. I noticed it today on my iPad.
ceejay185
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Re: New tool for building a TIPS ladder

Post by ceejay185 »

Wow! What a great and simple to use tool.

Thanks so much for your efforts in developing and sharing.

Expanding on RubyTuesdays comment - ability to input varied real income amounts by year would be very helpful.

I think #Cruncher has this on his to do list for a future model upgrade as well.

Thanks again.
marcopolo
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Re: New tool for building a TIPS ladder

Post by marcopolo »

kaesler wrote: Sat Jan 07, 2023 4:55 pm I built a TIPS ladder builder that is fairly easy to use. It can be used via a web interface here:

https://tipsladder.com

The first page is a form to specify your desired annual real income and the contiguous years for which you want to receive that amount. Submitting the form produces a TIPS shopping list.

There is a button to expand the tabular shopping list to provide more details about the bonds to be bought, cost breakdown per rung, and income breakdown per rung. You can also download all the details into a CSV file which can be read into a spreadsheet for further analysis.

I hope this is useful to Bogleheads. Let me know of any bugs that need fixing or enhancements you’d like.

This tool cannot yet make a “lumpy ladder”, one in which the income requirement varies from year to year. It also cannot yet integrate existing TIPS holdings into a new ladder. If there is enough interest it would not be too difficult to add those two features,
Perhaps i am missing something, but why do some years show a negative real yield? I believe all TIPs right now carry a positive real yield.
For example, if i look at building a 10 year ladder from 2024 to 2034, I get results that show having to spend more than i will get out for the year 2029 maturity. That does not seem right to me. What am i missing?

EDIT: It also shows a 40% return for the TIPs maturing in 2024?!? Where can i spend $7500 today on TIPs to get back $10,500 in 2024? I am obviously missing something. Does the purchase price today not include the accumulated inflation adjustment? That would seem important to include.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

marcopolo wrote: Sun Jan 08, 2023 1:42 pm
kaesler wrote: Sat Jan 07, 2023 4:55 pm I built a TIPS ladder builder that is fairly easy to use. It can be used via a web interface here:

https://tipsladder.com

The first page is a form to specify your desired annual real income and the contiguous years for which you want to receive that amount. Submitting the form produces a TIPS shopping list.

There is a button to expand the tabular shopping list to provide more details about the bonds to be bought, cost breakdown per rung, and income breakdown per rung. You can also download all the details into a CSV file which can be read into a spreadsheet for further analysis.

I hope this is useful to Bogleheads. Let me know of any bugs that need fixing or enhancements you’d like.

This tool cannot yet make a “lumpy ladder”, one in which the income requirement varies from year to year. It also cannot yet integrate existing TIPS holdings into a new ladder. If there is enough interest it would not be too difficult to add those two features,
Perhaps i am missing something, but why do some years show a negative real yield? I believe all TIPs right now carry a positive real yield.
For example, if i look at building a 10 year ladder from 2024 to 2034, I get results that show having to spend more than i will get out for the year 2029 maturity. That does not seem right to me. What am i missing?

EDIT: It also shows a 40% return for the TIPs maturing in 2024?!? Where can i spend $7500 today on TIPs to get back $10,500 in 2024? I am obviously missing something. Does the purchase price today not include the accumulated inflation adjustment? That would seem important to include.
Looks like a bug. Investigating...
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

The income in 2024 consists both return of principal from the bonds maturing that year, and interest from bonds maturing later.

I think there is still a bug with YTM.
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

Taking it down for now until that YTM problem is corrected.
ToBeOrNot
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Re: New tool for building a TIPS ladder

Post by ToBeOrNot »

Got an error page when accessing via Safari on iPad.
Tom_T
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Re: New tool for building a TIPS ladder

Post by Tom_T »

ToBeOrNot wrote: Mon Jan 09, 2023 11:26 am Got an error page when accessing via Safari on iPad.
I think he took it down to fix the bug.
ToBeOrNot
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Re: New tool for building a TIPS ladder

Post by ToBeOrNot »

Ah. Didn’t see the takedown notice. Thanks :thumbsup
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

Yes back soon. Need to straighten out few things with the code. Will announce when it is up again, in a day or two.
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

The TIPS Ladder service is back online at https://tipsladder.com.

Changes in this version (v29):
  • Bugfix: The detailed table is now scrollable on a device too narrow to contain the whole width. Works on my tiny iPhone and my iPad.
  • Bugfix: It was not building single-rung ladders correctly.
  • Usability: Hid more details in the summary view.
  • Usability: Moved the controls for toggling the detailed view and downloading the CSV to the top.
  • Usability: Added some more explanatory footnotes when relevant to the particular ladder being shown.
I also took a look at whether results matched the YTM values. I do think it is working correctly but am going to be giving this more detailed attention now that the GUI and deployment seem in place. I will address the puzzlement expressed above about the TIPS maturing in 2029 in a following post later in the day, or tomorrow, depending on available time.

Caveat: my understanding of TIPS is recently acquired and may be incorrect so I do welcome corrections if this thing is wrong. More shortly.
bigskyguy
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Re: New tool for building a TIPS ladder

Post by bigskyguy »

Thanks for your contribution to the TIPS ladder discussion.

I've compared your spreadsheet results with those for #Cruncher's tool (eyebonds.info) for a specific annual withdrawal, and come up with some significant discrepancies. In particular, when building a ladder from say 2024-2048, the early years of your spreadsheet come up with significantly different (lower) annual bond acquisition numbers than does #Cruncher's. When looking at your expanded spreadsheet, the difference in the calculation is clearly in the "interest earned" tabulation, which in your spreadsheet is significantly larger in the early years of the ladder than is seen in #Cruncher's (check year's 2024-32 for an example).

Since the ladders should be essentially identical, the discrepancy needs explaining. Can you please take a look at your results versus those of #Cruncher's spreadsheet and let me know what you think.

Again, thanks for the work, and your contribution.

Joe
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

Thanks. Will take a look.
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Re: New tool for building a TIPS ladder

Post by squirrel1963 »

This tool is awesome, thanks for sharing. Couple suggestions:
(1) for the 2033-2039 "TIPS great black hole", allow picking 2032 TIP only
(2) allow specifying 3 ranges of desired income ( pre-medicare&pre-SSA, medicare&pre-SSA, medicare&SSA ), or optionally allow to manually override the income desired for each year.
LMP | Liability Matching Portfolio | safe portfolio: TIPS ladder + I-bonds + Treasuries | risky portfolio: US stocks / US REIT / International stocks
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

squirrel1963 wrote: Tue Jan 10, 2023 10:29 am This tool is awesome, thanks for sharing. Couple suggestions:
(1) for the 2033-2039 "TIPS great black hole", allow picking 2032 TIP only
(2) allow specifying 3 ranges of desired income ( pre-medicare&pre-SSA, medicare&pre-SSA, medicare&SSA ), or optionally allow to manually override the income desired for each year.
(1) is very easy. I have a setting internally. Just need to add it to the input form.

(2) is harder. Will get to it when I can. Seems to be the most desirable enhancement. First I want to get more testing and verification done on the existing core algorithm.
Last edited by kaesler on Tue Jan 10, 2023 1:58 pm, edited 1 time in total.
bigskyguy
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Re: New tool for building a TIPS ladder

Post by bigskyguy »

bigskyguy wrote: Tue Jan 10, 2023 10:10 am Thanks for your contribution to the TIPS ladder discussion.

I've compared your spreadsheet results with those for #Cruncher's tool (eyebonds.info) for a specific annual withdrawal, and come up with some significant discrepancies. In particular, when building a ladder from say 2024-2048, the early years of your spreadsheet come up with significantly different (lower) annual bond acquisition numbers than does #Cruncher's. When looking at your expanded spreadsheet, the difference in the calculation is clearly in the "interest earned" tabulation, which in your spreadsheet is significantly larger in the early years of the ladder than is seen in #Cruncher's (check year's 2024-32 for an example).

Since the ladders should be essentially identical, the discrepancy needs explaining. Can you please take a look at your results versus those of #Cruncher's spreadsheet and let me know what you think.

Again, thanks for the work, and your contribution.

Joe
Kevin,

Disregard my critique. After further looking, my mistake was in not choosing the highest yielding TIPS in each year. Your calculations match those of #Cruncher.

There's a reason I went into medicine, not statistics or financial analysis. My apologies.

Joe
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

Thanks so much for that test against the spreadsheet Joe. A recent comparison against it was something I hadn’t got around to yet. Gives me some confidence in the new code.
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Re: New tool for building a TIPS ladder

Post by kaesler »

marcopolo wrote: Sun Jan 08, 2023 1:42 pm
Perhaps i am missing something, but why do some years show a negative real yield? I believe all TIPs right now carry a positive real yield.
For example, if i look at building a 10 year ladder from 2024 to 2034, I get results that show having to spend more than i will get out for the year 2029 maturity. That does not seem right to me. What am i missing?
Here is my understanding of what is happening there. TIPS experts please correct any errors.

(All numbers here are in real dollars based on today's dollar.)

Tomorrow I buy one TIPS with CUSIP 912810FH6 and hold it to maturity in 2029. I pay the ask price of $2065 plus some accrued-interest owed to the seller of about $17. Total cost $2081.

Now the Treasury promises to pay back to me at maturity, in 2029, the current accrued-principal, i.e. $1812.

Did I lose?

No because the Treasury will also be paying me interest twice a year between now and maturity. That payment is coupon x accrued principal, in this case, $35.1075.

So the sequence of cash flows is:

date, cashflow
2023-01-10,-2064.5475 (I buy the bond)
2023-04-15,35.1075 (interest payments....)
2023-10-15,35.1075

2024-04-15,35.1075
2024-10-15,35.1075

2025-04-15,35.1075
2025-10-15,35.1075

2026-04-15,35.1075
2026-10-15,35.1075

2027-04-15,35.1075
2027-10-15,35.1075

2028-04-15,35.1075
2028-10-15,35.1075

2029-04-15,1812.0 (return of principal at maturity)
2029-04-15,35.1075 (final interest payment)

So I pay $2081 for that bond and I get back $2268. I win! I gained about 9% over 6 years, or about 1.5% per year. The published YTM for that bond right now is 1.533%.

Now only the returned principal at maturity, and the one interest payment made in 2029 is used to fund my income needs in that year of 2029. The preceding interest payments are used to help fund those previous years, if there are any.

(You can also make a 1-rung ladder for just 2029 and the ladder generator will deem the "pre-ladder interest" payments to be used to fund the first ladder year. Try it.)
Last edited by kaesler on Tue Jan 10, 2023 2:22 pm, edited 1 time in total.
marcopolo
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Re: New tool for building a TIPS ladder

Post by marcopolo »

kaesler wrote: Tue Jan 10, 2023 1:44 pm
marcopolo wrote: Sun Jan 08, 2023 1:42 pm
Perhaps i am missing something, but why do some years show a negative real yield? I believe all TIPs right now carry a positive real yield.
For example, if i look at building a 10 year ladder from 2024 to 2034, I get results that show having to spend more than i will get out for the year 2029 maturity. That does not seem right to me. What am i missing?
Here is my understanding of what is happening there. TIPS experts please correct any errors.

(All numbers here are in real dollars based on today's dollar.)

Tomorrow I buy one TIPS with CUSIP 912810FH6 and hold it to maturity in 2029. I pay the ask price of $2065 plus some accrued-interest owed to the seller of about $17. Total cost $2081.

Now the Treasury promises to pay back to me at maturity, in 2029, the current accrued-principal, i.e. $1812.

Did I lose?

No because the Treasury will also be paying me interest twice a year between now and maturity. That payment is coupon x accrued principal, in this case, $35.1075.

So the sequence of cash flows is:

date, cashflow
2023-01-10,-2064.5475 (I buy the bond)
2023-04-15,35.1075 (interest payments....)
2023-10-15,35.1075

2024-04-15,35.1075
2024-10-15,35.1075

2025-04-15,35.1075
2025-10-15,35.1075

2026-04-15,35.1075
2026-10-15,35.1075

2027-04-15,35.1075
2027-10-15,35.1075

2028-04-15,35.1075
2028-10-15,35.1075

2029-04-15,1812.0 (return of principal at maturity)
2029-04-15,35.1075 (final interest payment)

So I pay $2081 for that bond and I get back $2268. I win! I gained about 9% over 6 years, or about $1.5% per year. The published YTM for that bond right now is 1.533%.

Now only the returned principal at maturity, and the one interest payment made in 2029 is used to fund my income needs in that year of 2029. The preceding interest payments are used to help fund those previous years, if there are any.

(You can also make a 1-rung ladder for just 2029 and the ladder generator will deem the "pre-ladder interest" payments to be used to fund the first ladder year. Try it.)
Thanks for the explanation.
I had not considered the interest payment from the outstanding bonds received each year. I was thinking in terms of total paid back for the bonds maturing each year. Of course, your approach makes more sense when thinking about using TIPs to fund cash flow needs.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

squirrel1963 wrote: Tue Jan 10, 2023 10:29 am This tool is awesome, thanks for sharing. Couple suggestions:
(1) for the 2033-2039 "TIPS great black hole", allow picking 2032 TIP only
Available in an update made just now just now.
Tom_T
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Re: New tool for building a TIPS ladder

Post by Tom_T »

I tried it out, and there is one line that looks odd. I specified a ladder from 2027 to 2029 that produces $50,000 in real income. The 2027 purchase seems odd to me:

2027 21 × 912810PS1 $32,148 $49,557

It doesn't seem possible that I can buy a bond for $32K and get back $49K four years from now. That's a 53% gain. I'd put ALL my money into it if that were true! Am I missing something?
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

Tom_T wrote: Tue Jan 10, 2023 6:26 pm I tried it out, and there is one line that looks odd. I specified a ladder from 2027 to 2029 that produces $50,000 in real income. The 2027 purchase seems odd to me:

2027 21 × 912810PS1 $32,148 $49,557

It doesn't seem possible that I can buy a bond for $32K and get back $49K four years from now. That's a 53% gain. I'd put ALL my money into it if that were true! Am I missing something?
Yes you're missing the fact that 2027 is funded from 3 different directions:
  • return of principal when 912810PS1 matures
  • interest earned by all 3 bonds bonds 912810PS1, 912810FD5 and 912810FH6 during the pre-ladder years of 2023-2026
  • interest earned during 2027 by the two bonds maturing in 2028 and 2029 respectively
Hit the "Show Details" button and it might be clearer.

I'm thinking of adding the option to download a "cash-flow calendar" CSV file that would indicate, when loaded into a spreadsheet, where each year's money comes from.
bigskyguy
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Re: New tool for building a TIPS ladder

Post by bigskyguy »

kaesler wrote: Tue Jan 10, 2023 6:44 pm
Tom_T wrote: Tue Jan 10, 2023 6:26 pm I tried it out, and there is one line that looks odd. I specified a ladder from 2027 to 2029 that produces $50,000 in real income. The 2027 purchase seems odd to me:

2027 21 × 912810PS1 $32,148 $49,557

It doesn't seem possible that I can buy a bond for $32K and get back $49K four years from now. That's a 53% gain. I'd put ALL my money into it if that were true! Am I missing something?
Yes you're missing the fact that 2027 is funded from 3 different directions:
  • return of principal when 912810PS1 matures
  • interest earned by all 3 bonds bonds 912810PS1, 912810FD5 and 912810FH6 during the pre-ladder years of 2023-2026
  • interest earned during 2027 by the two bonds maturing in 2028 and 2029 respectively
Hit the "Show Details" button and it might be clearer.

I'm thinking of adding the option to download a "cash-flow calendar" CSV file that would indicate, when loaded into a spreadsheet, where each year's money comes from.
A cash flow calendar would be helpful to understanding the numbers.
Tom_T
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Re: New tool for building a TIPS ladder

Post by Tom_T »

Ah, I see. I will echo poster "marcopolo" in that I never thought about the interest from other bonds in the ladder, mainly because it just goes into my settlement fund , along with anything else unrelated to the ladder. I always thought "I need $50K in year X - let me buy a $50K bond." It's a different way of looking at it, for me at least. Maybe it's just mental accounting.
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

bigskyguy wrote: Tue Jan 10, 2023 7:01 pm A cash flow calendar would be helpful to understanding the numbers.
Okay. I will add that. I have the code written. I used it to sanity test earlier versions of this. It is too big to display in a web browser. I think it can have 700 rows for a 20 year ladder, or so. A download to spreadsheet seems right.
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Re: New tool for building a TIPS ladder

Post by squirrel1963 »

kaesler wrote: Tue Jan 10, 2023 4:34 pm
squirrel1963 wrote: Tue Jan 10, 2023 10:29 am This tool is awesome, thanks for sharing. Couple suggestions:
(1) for the 2033-2039 "TIPS great black hole", allow picking 2032 TIP only
Available in an update made just now just now.
I saw it, cool !!!! :sharebeer
LMP | Liability Matching Portfolio | safe portfolio: TIPS ladder + I-bonds + Treasuries | risky portfolio: US stocks / US REIT / International stocks
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squirrel1963
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Location: Portland OR area

Re: New tool for building a TIPS ladder

Post by squirrel1963 »

Here is another feature that could be helpful: currently it will pick the bond with the highest available yield. It would be great to specify the maximum desirable inflation factor so that one could limit the maximum downward exposure in the (unlikely, but possible) case of deflation.

For instance, given these 3 bonds maturing in the same year X:

yield 1.5% inflation factor 1.3
yield 1.8% inflation factor 2.5
yield 1.6% inflation factor 1.4

by default it would pick the 1.8% yield, but if user specifies maximum inflation factor = 2, then it would pick the 1.6% yield.
LMP | Liability Matching Portfolio | safe portfolio: TIPS ladder + I-bonds + Treasuries | risky portfolio: US stocks / US REIT / International stocks
kalarama
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Re: New tool for building a TIPS ladder

Post by kalarama »

I wonder why you include "pre-ladder" interest as income for initial year of ladder. For example, I have a ladder starting in 2040 going to 2052. The tool is adding all the coupons I receive in 2023-2040 as my "income" for 2040. Realistically, I would not hold on to 'pre-ladder' coupon payments for 17 years to cover income for 2040. Instead, my 2040 income would consist of coupons for 2041-2052 bonds plus 2040 maturity bonds.

Pre-ladder coupons could be used by investors to their liking. I plan to supplement additional rungs each year as a new 30yr TIPS is auctioned and/or add to existing rungs.
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

squirrel1963 wrote: Tue Jan 10, 2023 7:33 pm Here is another feature that could be helpful: currently it will pick the bond with the highest available yield. It would be great to specify the maximum desirable inflation factor so that one could limit the maximum downward exposure in the (unlikely, but possible) case of deflation.
Thanks. Will add to the list of possible enhancements.
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

kalarama wrote: Wed Jan 11, 2023 2:42 am I wonder why you include "pre-ladder" interest as income for initial year of ladder.
It would be very easy to provide an option to include or exclude. I'll do that.
WoobieX
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Re: New tool for building a TIPS ladder

Post by WoobieX »

Thanks for this kaesler.

Spouse and I are making it a priority this year to understand TIPS well enough to either plan out a committed strategy or set the concept aside. Having access to tools like this really helps to understand how choices unfold over time and if a TIPS strategy can work for us.

No input beyond appreciation yet, but I'll will speak up if we run into something.

Thanks,

WoobieX
ScubaHogg
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Re: New tool for building a TIPS ladder

Post by ScubaHogg »

Very awesome

Another vote for a lumpy feature, which would be very useful for constructing an LMP
“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury.” | ― Judge Learned Hand
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

ScubaHogg wrote: Wed Jan 11, 2023 7:33 am Another vote for a lumpy feature, which would be very useful for constructing an LMP
Noted. Thanks.
Tom_T
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Re: New tool for building a TIPS ladder

Post by Tom_T »

Thanks for doing this labor of love! I'm a techie, so I know it's fun to do something like this (vs. whatever project your boss assigns you!)
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kaesler
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Re: New tool for building a TIPS ladder

Post by kaesler »

kaesler wrote: Wed Jan 11, 2023 6:01 am
kalarama wrote: Wed Jan 11, 2023 2:42 am I wonder why you include "pre-ladder" interest as income for initial year of ladder.
It would be very easy to provide an option to include or exclude. I'll do that.
Done.
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