TIPS ladder for early retiree- practical?

[protagonist]

For a 58 y o retiree with a portfolio heavy on cash, on target on stocks and real estate, and light on bonds, would starting a TIPS ladder by buying individual bonds at auction (as opposed to funds for price protection, predicting rising interrest rates) in a retirement account be practical? Or is it too late to take that approach?

It would require being overweighted in cash and under in bonds for awhile, but that doesn't seem like such a bad idea with my savings accounts currently yielding 1.2-1.75% interest (given the safety factor and the fear of a "bond bubble"). And, if so, how long will it take to build a reasonable "ladder"?- i.e. what percent of my total target TIPS investment would people suggest be made every year until I reach target? I would think developing a good "ladder" with bonds maturing every year or so would take at least five years to start- correct me if I am wrong please.

Any suggestions as to a good way to do it? I could start with the January 10 yr TIPS auction.... (It doesn't seem so wise to lock my total bond investment into today's low yields in a big lump sum I don't think, though perhaps others have different thoughts...)

[haha]

Quote:

Originally Posted by protagonist For a 58 y o retiree with a portfolio heavy on cash, on target on stocks and real estate, and light on bonds, would starting a TIPS ladder by buying individual bonds at auction (as opposed to funds for price protection, predicting rising interrest rates) in a retirement account be practical? Or is it too late to take that approach? It would require being overweighted in cash and under in bonds for awhile, but that doesn't seem like such a bad idea with my savings accounts currently yielding 1.2-1.75% interest (given the safety factor and the fear of a "bond bubble"). And, if so, how long will it take to build a reasonable "ladder"?- i.e. what percent of my total target TIPS investment would people suggest be made every year until I reach target? I would think developing a good "ladder" with bonds maturing every year or so would take at least five years to start- correct me if I am wrong please. Any suggestions as to a good way to do it? I could start with the January 10 yr TIPS auction.... (It doesn't seem so wise to lock my total bond investment into today's low yields in a big lump sum I don't think, though perhaps others have different thoughts...)

I have no comments on whether this is a good strategy at present, I really don't know. At times in the fairly recent past it was a very good strategy.

But for anyone who is interested in TIPS, I recommend a book by a member of this board-Explore TIPS, by The Finance Buff.


Ha