Need Help With Withdrawal Strategy

[Ted]

The way that TIPs work is that the principal amount (on which the annual interest payments are based) is adjusted each year for inflation as measured by the Consumer Price Index. Doing this properly requires multiplying the principal amount by the ratio of the "new" CPI value to the CPI value at the time when the TIPs were issued. Therefore, it provides inflation protection (at least before taxes) that is as good as the CPI measurement.

Rather than base your financial decisions on what you read in this forum (or -- even worse -- what some broker tells you) check it out at the Treasury web site at

http://www.publicdebt.treas.gov/sec/seciis.htm

IMO, the greatest long-term "risk" associated with TIPs is that, in the future as it becomes necessary to reinvest in new TIPs, the interest rate (i.e., the premium over the inflation rate) may decline. Since this rate is determined by the market, that would be caused by TIPs becoming more popular (especially among retirees) as I think they should!

 

[Ed_B]

I think Cut-Throat's planned ER lifestyle is a bit different
than most of us.  I can understand the appeal of an
African safari.  Personally, I would rather be boiled in my own juices, but I think it's neat for others if that's what
they like to do.

Not to worry, John. I'm sure that there are still places in Africa where both yours and CTs goals can still be achieved... simultaneously!


Ed_B

 

[Mr._johngalt]

Hey Ed_B! I wish for Cut-Throat happiness and
prosperity. Doubt we could coexist anywhere.

 

[Jarhead*]

Not to worry, John.  I'm sure that there are still places in Africa where both yours and CTs goals can still be achieved... simultaneously!  


Ed_B

 

[John Galt]

Re. Africa, maybe so. I complain bitterly about this
country's leaders, laws and policies. Can hardly stand to watch or read the daily news as it is awash in
nuttiness. Popular culture is sick sick sick! At least Cut-throat is doing his own thing
and not messing up my life, which can not be said
for our fearless leaders at any level, IMHO. So, I have
stopped voting, and periodically
threaten to leave the friendly confines of the USA.
Even seriously considered it a time or two. Alas, where would I go?

John Galt