Retire With Style

Episode 209: Your TIPS Questions Answered: Inflation Protection, Interest Rates, and Retirement Income


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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

    Explore the New RetireWithStyle.com! We’ve launched a brand-new home for the podcast! Visit RetireWithStyle.com to catch up on all our latest episodes, explore topics by category, and send us your questions or ideas for future episodes. If there’s something you’ve been wondering about retirement, we want to hear it!

    The Retirement Planning Guidebook: 2nd Edition has just been updated for 2025! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/

    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”

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    Retire With StyleBy Wade Pfau & Alex Murguia

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