Think of it as a 30-year period-certain inflation-adjusted portfolio. While this strategy isn’t perfect, it produced a safe 4.3% annualized real withdrawal rate for 30 years with no risk (except for the bonds between 20). Would anyone even be willing to sell me a few bonds? Each bond is $1,000 par plus the accumulated increase in principal from the CPI-U adjustments. The pricing on the spreadsheet was a couple of weeks old, and the spreads are much larger buying tiny quantities of 2-4 bonds in the secondary market. Buying the individual TIPS is another matter. The spreadsheet even told me which bonds to buy and in which quantity.Īt this point, I’m still dallying in the land of theory. I was able to use this spreadsheet to back into an average annual real amount I could receive with roughly a $100,000 investment. I kicked the tires and compared outputs to my own spreadsheet until I felt reasonably comfortable. It was written by Bob Hinkley, a retired corporate financial analyst and computer programmer and well respected contributor in the Bogleheads forum.
I started building a spreadsheet but then discovered and an easily downloadable and free spreadsheet that did the heavy lifting for me. There are a total of 50 TIPS maturities issued by the U.S.
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