Affirmation on TIPS ladder - Bogleheads.org

Alex GR wrote: ↑Thu Sep 12, 2024 11:37 am… please verify I perceive the shopping for course of and I bought the quantities and portions appropriately. It is a TIPS ladder 2040-2054 with ~$25k per yr payout. … Are these the proper TIPS and portions for 2040-2054? Appears to be like like all years are coated.

Just one TIPS matures annually 2040-2054 (on February 15), so there isn’t any approach you may decide the mistaken one. Your portions look appropriate to provide 25,000 of September 2024 {dollars} every of these years. I duplicated your ladder with my TIPS Ladder Builder Excel workbook and bought just about the identical greenback quantities as you.

                        -- Proceeds in Sep 16 2024 {Dollars} --
         Nbr                        Last    Coupons     Whole
 12 months  Bonds      Value  Principal  Coupon  Oth Bonds  Proceeds

 2025                                          3,682     3,682
 2026                                          3,682     3,682
 2027                                          3,682     3,682
 2028                                          3,682     3,682
 2029                                          3,682     3,682
 2030                                          3,682     3,682
 2031                                          3,682     3,682
 2032                                          3,682     3,682
 2033                                          3,682     3,682
 2034                                          3,682     3,682
 2035                                          3,682     3,682
 2036                                          3,682     3,682
 2037                                          3,682     3,682
 2038                                          3,682     3,682
 2039                                          3,682     3,682
 
 2040     15    22,975     21,816     232      3,218    25,266
 2041     16    24,259     22,968     244      2,730    25,942
 2042     16    18,719     22,259      83      2,563    24,906
 2043     16    17,671     21,877      68      2,426    24,371
 2044     17    21,137     22,930     158      2,111    25,199
 
 2045     17    18,376     22,694      85      1,941    24,720
 2046     18    20,170     23,881     119      1,702    25,702
 2047     18    19,107     23,441     103      1,497    25,040
 2048     18    19,115     22,946     115      1,267    24,328
 2049     19    19,684     23,736     119      1,030    24,885
 
 2050     20    16,497     24,455      31        969    25,454
 2051     20    15,526     24,149      15        939    25,102
 2052     21    15,009     23,714      15        909    24,638
 2053     23    22,364     24,323     182        544    25,050
 2054     25    27,095     25,607     272               25,879

Whole    279   297,705    350,796   1,841     79,068   431,705

Alex GR, in similar publish, wrote:The plan for pre-2040 curiosity is to place the cash within the [bank?], which means purchase addtl’ TIPS that the federal government will difficulty (hopefully) for 2055 and later.

This desk above lists the $3,682 curiosity yearly 2025 to 2039. This may present a small a part of the quantity wanted to purchase a brand new 30-year TIPS as they’re issued every February (if the Treasury sticks to its present schedule.) Simply remember that every one will produce further curiosity funds yearly earlier than maturity. Over time this can make your ladder heavier within the early years. To stop it from turning into extra lopsided, you may want to extend the face worth bought annually to compensate for inflation.

Alex GR wrote: ↑Fri Sep 13, 2024 1:56 pmI’m somewhat perplexed on the auctions, there are often a couple of positions on high with minimums of 25 or 50 …

A notice on terminology: You might be shopping for on the secondary market, not at public sale. On the secondary market you are shopping for beforehand issued bonds from people or establishments that personal them. At an public sale you are shopping for bonds newly issued by the Treasury. As a (presumably) non-competitive bidder, you may get the yield & worth decided by the aggressive bidders on the public sale. At present the Treasury schedules one TIPS public sale every month of 5-year (April, June, October, December), 10-year (January, March, Might, July, September, November), or 30-year (February, August) maturities as described here.