SPIA Return - Am I calculating this correctly?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
longinvest
Posts: 2905
Joined: Sat Aug 11, 2012 8:44 am

Re: SPIA Return - Am I calculating this correctly?

Post by longinvest » Wed Apr 11, 2018 4:17 pm

Chuck wrote:
Wed Apr 11, 2018 2:19 pm

Code: Select all

Maturity  Qty   Cost
  2019    48    47,229.60
The 1-year zero has a 1.63% yield. This is significantly lower than the current 1-Year Treasury Constant Maturity Rate as reported by FRED:
1-Year Treasury Constant Maturity Rate: 2.09% (2018-04-10)
Bogleheads investment philosophy | Lifelong Portfolio: 25% each of (domestic/international)stocks/(nominal/inflation-indexed)bonds | VCN/VXC/VLB/ZRR

Chuck
Posts: 2053
Joined: Thu May 21, 2009 12:19 pm

Re: SPIA Return - Am I calculating this correctly?

Post by Chuck » Wed Apr 11, 2018 4:18 pm

longinvest wrote:
Wed Apr 11, 2018 4:09 pm
I guess that "CDs for years 1-5 and treasuries for years 6-15" was meant, instead.
No, for maturities less than 5 years, treasuries are yielding more than CD's. For 5+ years, CD's earn more.

When you want income every year, it's easy to adjust bond quantities to produce $48,000 each year. In early years, there are about $10K-$12K in coupon payments, and maybe 36 maturing bonds, and in later years the income is primarily maturing bonds/CDs. The Vanguard bond ladder tool computes it all for you and shows you your annual income, schedule of payments, and everything. That's how I'm able to bang these numbers together in 5-10 minutes for strangers on the Internet.
longinvest wrote:
Wed Apr 11, 2018 4:09 pm
I'd like to see the detailed pricing for the 15 securities. The $40,000 estimate seems to imply a significant difference in yields of the 1-5 year securities.
The prices are all straight from the Vanguard bond desk. Just put a check mark on one bond for each maturity, and press "Build Ladder," adjust quantities to get the right cash flow, and bam.
Last edited by Chuck on Wed Apr 11, 2018 4:49 pm, edited 1 time in total.

longinvest
Posts: 2905
Joined: Sat Aug 11, 2012 8:44 am

Re: SPIA Return - Am I calculating this correctly?

Post by longinvest » Wed Apr 11, 2018 4:21 pm

Chuck wrote:
Wed Apr 11, 2018 4:18 pm
No, for maturities less than 5 years, treasuries are yielding more than CD's. For 5+ years, CD's earn more.
There are 6-15 year CDs? Are these guaranteed by the FDIC, or are they exposed to a risk of default like corporate bonds?

(I don't know much about CDs, as I'm Canadian. In Canada, the equivalent securities are only guaranteed if they have a maturity of 5 years or less).
Bogleheads investment philosophy | Lifelong Portfolio: 25% each of (domestic/international)stocks/(nominal/inflation-indexed)bonds | VCN/VXC/VLB/ZRR

Dottie57
Posts: 3950
Joined: Thu May 19, 2016 5:43 pm

Re: SPIA Return - Am I calculating this correctly?

Post by Dottie57 » Wed Apr 11, 2018 4:34 pm

smitcat wrote:
Wed Apr 11, 2018 11:58 am
Dottie57 wrote:
Wed Apr 11, 2018 10:58 am
corn18 wrote:
Tue Apr 10, 2018 2:46 pm
Was thinking about retiring at 55 and taking SS at 70. SS + COLA Pension covers all my base expenses. So, why not try a 15 year certain annuity to cover me from 55 to 70? Went to immediate annuity and got the following info:

Period 15
Cost of Annuity 587,518
Monthly/Annual/Total Payout 4,000 48,000 720,000
Total Gain 132,482
Annual Gain 8,832.13
Annual Return 1.50%

Wouldn't I be in the same spot if I put $587,518 into a high yield savings account with 1.5% interest? If so, it seems the annuity is not the best approach to bridge me to SS.

Appreciate your thoughts.
I've gone through same analysis. I would rather keep control of my money since there isn't a real financial benefi.

I wish I had been smart enough to put money into a deferred annuity 5 years ago. The payout would be better.
Without knowing your details - I would guess you did just fine with that money over these past 5 years of growth.
FWIW - every time I look back to see whether I did something that could have been done better I find that I have.

Rear veiwing vision is always 20/20.
I know. 5 years ago I did not expect to be retired till at least 65. Early retirement package changed that. And hating the work environment.

Chuck
Posts: 2053
Joined: Thu May 21, 2009 12:19 pm

Re: SPIA Return - Am I calculating this correctly?

Post by Chuck » Wed Apr 11, 2018 4:39 pm

longinvest wrote:
Wed Apr 11, 2018 4:21 pm
There are 6-15 year CDs? Are these guaranteed by the FDIC, or are they exposed to a risk of default like corporate bonds?

(I don't know much about CDs, as I'm Canadian. In Canada, the equivalent securities are only guaranteed if they have a maturity of 5 years or less).
You can buy up to 30-year FDIC-insured CDs. (Wells Fargo, HSBC, and JP Morgan appear to be the ones offering these long long CDs.) Unfortunately, as I'm learning during this exercise, maturities greater than 10 years are all callable. So to avoid call risk, I'd probably lean back toward treasuries for years 11-15.

Chuck
Posts: 2053
Joined: Thu May 21, 2009 12:19 pm

Re: SPIA Return - Am I calculating this correctly?

Post by Chuck » Wed Apr 11, 2018 4:41 pm

longinvest wrote:
Wed Apr 11, 2018 4:17 pm
The 1-year zero has a 1.63% yield. This is significantly lower than the current 1-Year Treasury Constant Maturity Rate as reported by FRED:
1-Year Treasury Constant Maturity Rate: 2.09% (2018-04-10)
I just saw 2019 and clicked. I don't know what month I picked, or whether it was a new issue or a secondary with a purchase fee. I was just trying to quickly build a 15-year ladder and make a point.

User avatar
corn18
Posts: 844
Joined: Fri May 22, 2015 6:24 am

Re: SPIA Return - Am I calculating this correctly?

Post by corn18 » Wed Apr 11, 2018 4:58 pm

Chuck wrote:
Wed Apr 11, 2018 4:00 pm
corn18 wrote:
Wed Apr 11, 2018 3:23 pm
Complexity plays a role in my decision, too. SPIA=simple. Ladders=more complex.
Of course. I only make about $100K per year, so a $40K savings is worth it if I spend less than 5 months on it. (It might take 2-3 days to set up the ladder.) But it sounds like you're doing a little better than I am.
Sorry, I was more comparing the cost of the 15 year period certain SPIA with a 2% COLA which is $664,458 vs your 2% COLA ladder at $667,000. I agree that $40,000 is a lot of money.

longinvest
Posts: 2905
Joined: Sat Aug 11, 2012 8:44 am

Re: SPIA Return - Am I calculating this correctly?

Post by longinvest » Wed Apr 11, 2018 4:58 pm

Chuck wrote:
Wed Apr 11, 2018 4:39 pm
longinvest wrote:
Wed Apr 11, 2018 4:21 pm
There are 6-15 year CDs? Are these guaranteed by the FDIC, or are they exposed to a risk of default like corporate bonds?

(I don't know much about CDs, as I'm Canadian. In Canada, the equivalent securities are only guaranteed if they have a maturity of 5 years or less).
You can buy up to 30-year FDIC-insured CDs. (Wells Fargo, HSBC, and JP Morgan appear to be the ones offering these long long CDs.) Unfortunately, as I'm learning during this exercise, maturities greater than 10 years are all callable. So to avoid call risk, I'd probably lean back toward treasuries for years 11-15.
It would be really nice if you were able to redo the calculations with a few improvements:
  • Assume that year one's 12 monthly payments will be funded off $48,000 sitting in a high-interest savings account. Each year, after that, the same is done with the capital of the maturing rung.
  • Select maturities in April.
  • Always choose the less expensive between a non-callable zero-coupon CD and a zero-coupon Treasury.
  • The longest maturity rung, of the non-rolling ladder, matures in 14 years (April 2032).
  • Assume 2% indexing. In other words, the 1-year maturity security should aim to deliver $48,000 X 1.02 = $48,960.
  • Report detailed pricing and maturity values, so that we could do a fair comparison with the 2% 15-year term-certain SPIA.
Only if you have time and feel like it, of course!
Last edited by longinvest on Wed Apr 11, 2018 5:06 pm, edited 6 times in total.
Bogleheads investment philosophy | Lifelong Portfolio: 25% each of (domestic/international)stocks/(nominal/inflation-indexed)bonds | VCN/VXC/VLB/ZRR

longinvest
Posts: 2905
Joined: Sat Aug 11, 2012 8:44 am

Re: SPIA Return - Am I calculating this correctly?

Post by longinvest » Wed Apr 11, 2018 4:59 pm

corn18 wrote:
Wed Apr 11, 2018 4:58 pm
Chuck wrote:
Wed Apr 11, 2018 4:00 pm
corn18 wrote:
Wed Apr 11, 2018 3:23 pm
Complexity plays a role in my decision, too. SPIA=simple. Ladders=more complex.
Of course. I only make about $100K per year, so a $40K savings is worth it if I spend less than 5 months on it. (It might take 2-3 days to set up the ladder.) But it sounds like you're doing a little better than I am.
Sorry, I was more comparing the cost of the 15 year period certain SPIA with a 2% COLA which is $664,458 vs your 2% COLA ladder at $667,000. I agree that $40,000 is a lot of money.
But, there's a problem with the non-rolling ladder, because CDs of 11-15 years are callable. So, it's normal that they carry significantly higher yields. Calculations have to be redone before we can make a fair comparison.
Bogleheads investment philosophy | Lifelong Portfolio: 25% each of (domestic/international)stocks/(nominal/inflation-indexed)bonds | VCN/VXC/VLB/ZRR

Chuck
Posts: 2053
Joined: Thu May 21, 2009 12:19 pm

Re: SPIA Return - Am I calculating this correctly?

Post by Chuck » Wed Apr 11, 2018 11:19 pm

A 15-year ladder with a mishmash of zeroes and non-callable CDs costs $649,523. Because of the heavy reliance on strips, I chose to cluster the maturities around August. The results are not the best outside of trading hours. It took me about 25 minutes. This is about $15,000 cheaper than the SPIA.

Now, this is not apples to apples, because the SPIA is locked in, and the CD/bond ladder can be exited at any time. So even if it were more expensive, I would prefer the ladder.

Image

This table explains how some of each year's income is coupon payments, and some is maturing securities. I combined 2018 and 2019 into a single year to deal with some of the early coupons.
Image

And in graph form. This explains more clearly why the fact that some of the securities are not zero-coupon doesn't actually matter.
Image

If I were to do this in real life, I'd probably actually spend about 30 minutes to an hour each day over the course of 15 days trying to get the best results for each target year, starting with 2033 and working backwards. I might even consider bringing retail CDs into the mix. I think 15 hours spent saving $1000/hour is worth it to me.

But I would also probably never do this, because I think putting it in a balanced fund, or a 60/40 AA and just withdrawing what you need as you need it would be superior to all these shenanigans.

longinvest
Posts: 2905
Joined: Sat Aug 11, 2012 8:44 am

Re: SPIA Return - Am I calculating this correctly?

Post by longinvest » Thu Apr 12, 2018 12:58 am

Chuck,
Chuck wrote:
Wed Apr 11, 2018 11:19 pm
A 15-year ladder with a mishmash of zeroes and non-callable CDs costs $649,523. Because of the heavy reliance on strips, I chose to cluster the maturities around August. The results are not the best outside of trading hours. It took me about 25 minutes. This is about $15,000 cheaper than the SPIA.
I disagree with this conclusion, because the constructed ladder is equivalent to a deferred annuity starting in 1.5 year.

If I subtract the 2033 rung's price and add $48,000, reducing the deferral to 6 months I get: $649,523 - $40,357 + $48,000 = $657,166

To make a fair comparison, I'll assume that the SPIA will cost me $667,000 6 months from now.

According to FRED:
6-Month Treasury Constant Maturity Rate: 1.93% (2018-04-10)

I would need to put $660,665 today into a 6-month Treasury to have enough money to buy the SPIA in 6 months.

This alreay reduces the difference between the cost of the SPIA and that of the Treasury/CD ladder to: $660,665 - $657,166 = $3,499

But, I'm not done yet.

If I look at the 2032 rung, it will only deliver $62,000. Yet, in its last year, the SPIA will pay $48,000 X 1.02^14 = $63,335. That's $1,335 more than the ladder.

The ladder is imperfect.

My assessment is that the SPIA's pricing is fair, and that an investor wouldn't be able to make significant savings by constructing a hybrid Treasury/CD ladder.
Chuck wrote:
Wed Apr 11, 2018 11:19 pm
Now, this is not apples to apples, because the SPIA is locked in, and the CD/bond ladder can be exited at any time. So even if it were more expensive, I would prefer the ladder.
I could take another view. For example, I know that it would be much simpler for my wife to receive a SPIA monthly payment in her bank account, if I was to die early, than try to manage herself the non-rolling ladder's payment money to reconstruct a monthly payment stream.

The ladder is more liquid (it can be sold), but the term-certain SPIA is more convenient.
Chuck wrote:
Wed Apr 11, 2018 11:19 pm
But I would also probably never do this, because I think putting it in a balanced fund, or a 60/40 AA and just withdrawing what you need as you need it would be superior to all these shenanigans.
Flexible withdrawals (e.g. VPW) from a balanced portfolio cannot guarantee a minimum withdrawal amount. Inflexible withdrawals (e.g. SWR) from a balanced portfolio exposes the portfolio to a risk of premature depletion.

The idea, here, was to extend the lifelong stable inflation-indexed delayed Social Security pension for 15 additional years, from age 55 to age 70.

One is free to take the risk of not having a non-portfolio income base between 55 and 70 and waiting to age 70 to get one (e.g. delayed Social Security). But, I wouldn't discourage a future retiree willing to construct or buy such an income base, unaffected by market fluctuations, which can bring peace of mind.
Bogleheads investment philosophy | Lifelong Portfolio: 25% each of (domestic/international)stocks/(nominal/inflation-indexed)bonds | VCN/VXC/VLB/ZRR

gotester2000
Posts: 508
Joined: Sun Nov 12, 2017 1:59 am

Re: SPIA Return - Am I calculating this correctly?

Post by gotester2000 » Thu Apr 12, 2018 4:32 am

OP,

You dont need an annuity. It is for people who have low corpus with risk of outliving their money.

You have inflation adjusted pension + ss and need to bridge a gap of 7-15 years with a fair corpus. Why not keep the corpus in stocks and bonds and do annual withdrawals?

Have I missed your income and expenses?

User avatar
corn18
Posts: 844
Joined: Fri May 22, 2015 6:24 am

Re: SPIA Return - Am I calculating this correctly?

Post by corn18 » Thu Apr 12, 2018 6:18 am

gotester2000 wrote:
Thu Apr 12, 2018 4:32 am
OP,

You dont need an annuity. It is for people who have low corpus with risk of outliving their money.

You have inflation adjusted pension + ss and need to bridge a gap of 7-15 years with a fair corpus. Why not keep the corpus in stocks and bonds and do annual withdrawals?

Have I missed your income and expenses?
I have a military pension that is currently $43,757 / year that is COLA'd. Expected SS @ 70 is $48,000 / year. Total = $91,757. This covers my base expenses of $70k.

Just considering an annuity. Not set on one. It is appealing in that we would have a certain income level that is guaranteed regardless of what is happening in the markets. The annuity would eat up ~ 1/3 of our portfolio. Having that guaranteed base for life would be of great comfort.

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: SPIA Return - Am I calculating this correctly?

Post by dbr » Thu Apr 12, 2018 8:09 am

corn18 wrote:
Thu Apr 12, 2018 6:18 am
gotester2000 wrote:
Thu Apr 12, 2018 4:32 am
OP,

You dont need an annuity. It is for people who have low corpus with risk of outliving their money.

You have inflation adjusted pension + ss and need to bridge a gap of 7-15 years with a fair corpus. Why not keep the corpus in stocks and bonds and do annual withdrawals?

Have I missed your income and expenses?
I have a military pension that is currently $43,757 / year that is COLA'd. Expected SS @ 70 is $48,000 / year. Total = $91,757. This covers my base expenses of $70k.

Just considering an annuity. Not set on one. It is appealing in that we would have a certain income level that is guaranteed regardless of what is happening in the markets. The annuity would eat up ~ 1/3 of our portfolio. Having that guaranteed base for life would be of great comfort.
What are you going to do with all that money that you don't spend? It is just going to go back into the bank where it came from. Most of it is simply returning to you what you laid out for the SPIA. What would be the point of that?

gotester2000
Posts: 508
Joined: Sun Nov 12, 2017 1:59 am

Re: SPIA Return - Am I calculating this correctly?

Post by gotester2000 » Thu Apr 12, 2018 8:09 am

corn18 wrote:
Thu Apr 12, 2018 6:18 am
gotester2000 wrote:
Thu Apr 12, 2018 4:32 am
OP,

You dont need an annuity. It is for people who have low corpus with risk of outliving their money.

You have inflation adjusted pension + ss and need to bridge a gap of 7-15 years with a fair corpus. Why not keep the corpus in stocks and bonds and do annual withdrawals?

Have I missed your income and expenses?
I have a military pension that is currently $43,757 / year that is COLA'd. Expected SS @ 70 is $48,000 / year. Total = $91,757. This covers my base expenses of $70k.

Just considering an annuity. Not set on one. It is appealing in that we would have a certain income level that is guaranteed regardless of what is happening in the markets. The annuity would eat up ~ 1/3 of our portfolio. Having that guaranteed base for life would be of great comfort.
So the shortfall is about 27k. At 5%, you will need your entire about 600k for the annuity to generate that figure.

I would keep that 600k - you will at least have 150k remaining after 15 years with 100% bonds. With stocks it will be much more. Choice is yours.

User avatar
corn18
Posts: 844
Joined: Fri May 22, 2015 6:24 am

Re: SPIA Return - Am I calculating this correctly?

Post by corn18 » Thu Apr 12, 2018 8:23 am

Your inputs are helping me become smarter on what my options are. The decision will be made at a future date, at least 3 years from now. I am still accumulating and running a 60/40 BH portfolio. If I find a job I love, I may not retire until 70.

smitcat
Posts: 1612
Joined: Mon Nov 07, 2016 10:51 am

Re: SPIA Return - Am I calculating this correctly?

Post by smitcat » Thu Apr 12, 2018 8:54 am

corn18 wrote:
Thu Apr 12, 2018 6:18 am
gotester2000 wrote:
Thu Apr 12, 2018 4:32 am
OP,

You dont need an annuity. It is for people who have low corpus with risk of outliving their money.

You have inflation adjusted pension + ss and need to bridge a gap of 7-15 years with a fair corpus. Why not keep the corpus in stocks and bonds and do annual withdrawals?

Have I missed your income and expenses?
I have a military pension that is currently $43,757 / year that is COLA'd. Expected SS @ 70 is $48,000 / year. Total = $91,757. This covers my base expenses of $70k.

Just considering an annuity. Not set on one. It is appealing in that we would have a certain income level that is guaranteed regardless of what is happening in the markets. The annuity would eat up ~ 1/3 of our portfolio. Having that guaranteed base for life would be of great comfort.
How did you determine your SS at 70? Is that for one person or two? Was it in todays dollars? Was it thru the SS.gov site?
Whatever you do please check that number unless you already are sure.

User avatar
corn18
Posts: 844
Joined: Fri May 22, 2015 6:24 am

Re: SPIA Return - Am I calculating this correctly?

Post by corn18 » Thu Apr 12, 2018 9:27 am

smitcat wrote:
Thu Apr 12, 2018 8:54 am
How did you determine your SS at 70? Is that for one person or two? Was it in todays dollars? Was it thru the SS.gov site?
Whatever you do please check that number unless you already are sure.
How did you determine your SS at 70?

I used ANYPIA. I entered all of my actual earnings to date and my forecast earnings through 2021 (expected retirement year).

Is that for one person or two?

I am married but the only one who has SS earnings. I am forecasting my SS to start at my age 70. Her spousal benefit will start at my age 71 (her age 67, which is her FRA).

Was it in todays dollars?

Affirmative

Was it thru the SS.gov site?

I downloaded the ANYPIA program and use that.

Whatever you do please check that number unless you already are sure.

WILCO.

Chuck
Posts: 2053
Joined: Thu May 21, 2009 12:19 pm

Re: SPIA Return - Am I calculating this correctly?

Post by Chuck » Thu Apr 12, 2018 10:58 am

longinvest wrote:
Thu Apr 12, 2018 12:58 am
To make a fair comparison, I'll assume that the SPIA will cost me $667,000 6 months from now.
Your number is right for today, actually. Great work! If I adjust the bonds to start maturing immediately, the total cost is $667,155. That was quite an oversight on my part.

The SPIA cost of $664,458 is actually better than my ladder. (I still believe that one could construct a ladder that is cheaper, but I no longer claim that it is easy or can be done in a half-hour!!)

One advantage to the SPIA is that it will be taxed equally on every payment (I believe), and you will simply get a 1099-R indicating the amount of each payment that is taxed as income. So that is a definite advantage if it is non-qualified money.

I still believe the lack of liquidity is a disadvantage, but it's up to whatever the buyer values more highly. I stand corrected that the SPIA cost is correct and fair.

(Incidentally, I re-ran the numbers using only zeroes, and it was $670,251. So you don't gain MUCH by using CDs where possible. Things change a lot whether markets are open or closed when you're building ladders, which is also interesting.)

Thank you longinvest for hammering my figures. I learned a lot in this process.

Chuck
Posts: 2053
Joined: Thu May 21, 2009 12:19 pm

Re: SPIA Return - Am I calculating this correctly?

Post by Chuck » Thu Apr 12, 2018 12:15 pm

BTW, a 15-year ladder of TIPS is easy to build and would provide actual inflation protection (rather than a fixed 2% pa increase), for $688,250.

User avatar
CWRadio
Posts: 331
Joined: Sat Feb 02, 2008 10:04 am
Location: In the Michigan ionosphere

Re: SPIA Return - Am I calculating this correctly?

Post by CWRadio » Thu Apr 12, 2018 12:30 pm

Chuck wrote:
Thu Apr 12, 2018 12:15 pm
BTW, a 15-year ladder of TIPS is easy to build and would provide actual inflation protection (rather than a fixed 2% pa increase), for $688,250.
Can you please point me to DIY information on building a TIPS ladder. Paul

Chuck
Posts: 2053
Joined: Thu May 21, 2009 12:19 pm

Re: SPIA Return - Am I calculating this correctly?

Post by Chuck » Thu Apr 12, 2018 12:58 pm

CWRadio wrote:
Thu Apr 12, 2018 12:30 pm
Can you please point me to DIY information on building a TIPS ladder. Paul
Vanguard.com -> Find CDs and bonds -> Treasuries -> Treasury type = TIPS -> Search

There are only 40 or so total TIPS issues, so put a checkmark in front of each one you want, and hit "Build Ladder." The quantities are all screwy by default, so adjust that so you get the right amount of income in each year. (The numbers will be in current dollars.) Every time you update the quantities, click "Calculate" then switch to the "Cash Flow" tab to see how it went. Then go back to the "Ladder Details" tab to fix it up some more. Repeat this until the yearly income is close enough to what you want.

Adjust quantities from the farthest in the future first and work backwards, since those will have coupon payments that will be paid out in all the previous years.

Some years are missing TIPS. In my example, I put three years' worth of maturities in 2029 to cover 2030 and 2031. (Presumably when all that matures in 2029, you'd put it in some 1 and 2 year treasuries.)

longinvest
Posts: 2905
Joined: Sat Aug 11, 2012 8:44 am

Re: SPIA Return - Am I calculating this correctly?

Post by longinvest » Thu Apr 12, 2018 2:41 pm

Chuck wrote:
Thu Apr 12, 2018 12:58 pm
CWRadio wrote:
Thu Apr 12, 2018 12:30 pm
Can you please point me to DIY information on building a TIPS ladder. Paul
Vanguard.com -> Find CDs and bonds -> Treasuries -> Treasury type = TIPS -> Search

There are only 40 or so total TIPS issues, so put a checkmark in front of each one you want, and hit "Build Ladder." The quantities are all screwy by default, so adjust that so you get the right amount of income in each year. (The numbers will be in current dollars.) Every time you update the quantities, click "Calculate" then switch to the "Cash Flow" tab to see how it went. Then go back to the "Ladder Details" tab to fix it up some more. Repeat this until the yearly income is close enough to what you want.

Adjust quantities from the farthest in the future first and work backwards, since those will have coupon payments that will be paid out in all the previous years.

Some years are missing TIPS. In my example, I put three years' worth of maturities in 2029 to cover 2030 and 2031. (Presumably when all that matures in 2029, you'd put it in some 1 and 2 year treasuries.)
I would suggest giving a look at Forum member #Cruncher's TIPS ladder tool, which makes sure that the total of maturing principals and coupons match one's target annual payment. The link is at the end of the following post: Re: How should I build a TIPS income ladder?.
Bogleheads investment philosophy | Lifelong Portfolio: 25% each of (domestic/international)stocks/(nominal/inflation-indexed)bonds | VCN/VXC/VLB/ZRR

Post Reply