Anyone ever bought Treasury Inflation-Protected Securities?
- Thread starter NPT
- Start date
Bump:
www.treasurydirect.gov
I Bonds are currently selling at 9.62% return.
Buying savings bonds — TreasuryDirect
www.treasurydirect.gov
I Bonds are currently selling at 9.62% return.
tangential question...
What are your thoughts on Roth IRA vs. "regular" IRA contributions, for someone with retirement ~10 years away, and income above where IRA contributions are tax-exempt?
I am doing some of both. Boom markets, or age under 50, would seem to make the Roth a no-brainer choice. It was just made available to me as a 403b contribuition option, but tax free earnings over 8 years may not outweigh the benefits of pre-tax contributions.
What are your thoughts on Roth IRA vs. "regular" IRA contributions, for someone with retirement ~10 years away, and income above where IRA contributions are tax-exempt?
I am doing some of both. Boom markets, or age under 50, would seem to make the Roth a no-brainer choice. It was just made available to me as a 403b contribuition option, but tax free earnings over 8 years may not outweigh the benefits of pre-tax contributions.
LOL. I'm such a loser. I bought at 7 something.Bump:
Buying savings bonds — TreasuryDirect
I Bonds are currently selling at 9.62% return.
There is no right/wrong answer. I make all of my 401K contributions tax deductible today, rather than Roth ( I have other ways to get Roth money). My tax rate is considerably higher today than it will be during my retirement years. Therefore, I want the tax deduction today. I also have little to no faith that our government may not at some point in the future have some kind of "means Test" for Roth dollars. Maybe they won't, and I hope that to be the case, but the way attitudes have shifted over the years makes me think that is at least a possibility.
Last thing. I will be shocked if the next 10 years of investing will be as good as the last 10 years. Obviously Roth's excel during periods of strong market returns.
Now they've adjusted to the higher variable rate, so you're only out the difference for the few months that you held them at the 7%. I don't believe the fixed component went up.
I think I'm going to cobble together another chunk and buy asome more under my wife's name. That rate is hard to pass up.
Be careful when you assume your tax rates will be lower.
They would be today, but if a certain Party gets its way, your tax rates could be higher even if you're making a lower income.
My son-in-law is a bond trader. He said to buy all the iBonds you can afford, after initially poo-pooing them. He thought they were like the TIPS bonds.
So they will periodically adjust up (or down), but will never go below the buy rate? Is that right?
They can go up and down. I don't think there is a limit either way. I don't remember readoing about a guaranteed floor rate.
lurker's link answered my question. Yes, they can adjust down below the buy in rate.
Every 6 months the variable component adjusts based on inflation. The only thing that locks in at time of purchase is the fixed component, which is at 0 and has been for a while now.
Did you end up buying any TIPS? Hopefully not, as they've probably lost money since January.
That said, there's a good argument to be made to have a significant portion of your bond holdings in TIPS... matching the duration of the bonds to your expected timing needs. (Anywhere from 25-50% of your bonds in TIPS of various duration is reasonable)
You can buy them from Treasury direct if you want individual bonds.... but most people likely just use a TIPS bond fund (mutual funds and ETFs both widely available).
I-bonds are great, but the $ limitation makes them not all that useful if you are rebalancing something like a retirement portfolio.
I did buy a few in April...that was the first auction I saw that was for 5 year maturity because I didn't want to go any longer term. At least if I lose money it won't be for long term.
On Edit: I have some i-bonds that I bought in the 2000-2005 range (when there was no limit) that are paying over 10% now
Last edited:
Well, the 10 year TIPS is finally out of negative real yield territory.... so they are again ok to buy IMO..... for 2 years they have been negative yield.... so was hard to stomach that.
Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity, Quoted on an Investment Basis, Inflation-Indexed
View data of the inflation-adjusted interest rates on 10-year Treasury securities with a constant maturity.
fred.stlouisfed.org
I'm too lazy to look it up, but are they fixed interest rate or variable, like iBonds?Well, the 10 year TIPS is finally out of negative real yield territory.... so they are again ok to buy IMO..... for 2 years they have been negative yield.... so was hard to stomach that.
Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity, Quoted on an Investment Basis, Inflation-Indexed
View data of the inflation-adjusted interest rates on 10-year Treasury securities with a constant maturity.fred.stlouisfed.org
