Retire With Style Episode 209: Your TIPS Questions Answered: Inflation Protection, Interest Rates, and Retirement Income
In this episode of Retire with Style, Wade Pfau and Alex Murguia explore how Treasury Inflation Protected Securities, or TIPS, fit into a retirement income plan. They discuss when it may make sense to build a TIPS ladder, the challenge of predicting interest rates, and how TIPS compare with equities as tools for managing inflation risk. The conversation also addresses strategies for creating inflation-adjusted income, the role TIPS can play alongside Social Security, and how a TIPS ladder can support a Social Security delay bridge. Listen now to learn more.
Takeaways
- TIPS are designed to protect against inflation in retirement.
- Timing is crucial when building a TIPS ladder for retirement income.
- Interest rates are unpredictable, making TIPS a safer choice now.
- Equities can provide growth but lack the guaranteed inflation protection of TIPS.
- Delaying Social Security can enhance retirement income security.
- Bond funds may not be the best option for retirement income planning.
- TIPS can help mitigate sequence of returns risk in retirement portfolios.
- A blend of TIPS and equities can optimize retirement income strategies.
- Interest rate risk is a significant factor when considering long-term bonds.
- Effective financial planning involves understanding the role of TIPS in a diversified portfolio.
Chapters
00:00 Introduction to TIPS and Retirement Planning
02:44 Building a TIPS Ladder: Timing and Strategy
06:06 Understanding Interest Rates and TIPS
08:53 TIPS vs. Equities: Inflation Protection and Growth
11:46 Creating Inflation-Adjusted Income Streams
15:05 The Role of TIPS in Retirement Income
17:55 Bond Funds vs. TIPS: A Comparative Analysis
21:13 Social Security Delay Bridge and TIPS
24:00 Current TIPS Market and Yield Considerations
27:00 Final Thoughts and Holiday Wishes
Links
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This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”