Thanks. I can’t seem to figure out what a small percentage would be of value in a portfolio.
Like any investment, a small percentage has no discernible effect. That is true no matter what investment!
We are at about 40% of our Fixed Income (and therefore about 20% of the total portfolio) in TIPS. Probably the minimum to have any real effect.
Do folks buy individual TIPS or funds? Can you hold individual TIPS in a tIRA or 401(K)?
I'm not crazy about such low yielding instruments (right now) but have thought for a while that inflation protection should become more of a priority. Still casting about for ideas. YMMV
You should be able to hold individual TIPS in a tIRA, depending on where you hold the tIRA. With a 401K, that's unlikely unless your 401K provides a brokerage window with very generous options. Last time I had a 401K with a brokerage window, it was limited to only purchasing mutual funds offered by the custodian.
Still, with the 401K you might have a couple of choices.
- If your plan offers in-service rollovers, you can roll over your 401K to an IRA and purchase them in the IRA
- If your plan doesn't offer in-service rollovers as a standard option, if you're older than 59.5, you can still do an in-service rollover to an IRA. I plan to use this method later this year to move some proceeds from my current 401K to my IRA due to not really liking the offerings in my 401K. Note, they don't have to make this process easy. My 401K custodian (Vanguard) requires that I do this via a phonecall instead of being able to do this online.
VAIPX is an alternative in this situation - it is offered in DW's 401k
Do folks buy individual TIPS or funds? Can you hold individual TIPS in a tIRA or 401(K)?
I'm not crazy about such low yielding instruments (right now) but have thought for a while that inflation protection should become more of a priority. Still casting about for ideas. YMMV