We have a lot of our retirement next egg in tax free bonds. They are pretty well laddered, and my thoughts have always been that if we get the effective yield we bargained for, we can handle inflation; as lower rate bonds mature, we would invest in higher rate bonds.
But I'm not sure how deflation might affect us. I think deflation would be mostly short term. But if $100 will buy more in 2 years than it will buy now, aren't we better off with the fixed income bonds, so long as we aren't trading them? Seems to me we would be, but I haven't ever thougth about it.
A guy on Bloomberg radio this morning was talking about his expectations of deflation. We've seen it in housing and right now in gas prices. I think I would be happy if I had $100,000 in tax free income (which I don't yet), plus SS, if the cost of housing, gas and everything else went down.
I have assumed our country's financial mess would lead to inflation, but what do you guys think about deflation? And what do you plan to do to deal with it?
But I'm not sure how deflation might affect us. I think deflation would be mostly short term. But if $100 will buy more in 2 years than it will buy now, aren't we better off with the fixed income bonds, so long as we aren't trading them? Seems to me we would be, but I haven't ever thougth about it.
A guy on Bloomberg radio this morning was talking about his expectations of deflation. We've seen it in housing and right now in gas prices. I think I would be happy if I had $100,000 in tax free income (which I don't yet), plus SS, if the cost of housing, gas and everything else went down.
I have assumed our country's financial mess would lead to inflation, but what do you guys think about deflation? And what do you plan to do to deal with it?