Thanks, MtnBiker!The thread about the tipsladder.com tool has recently announced (viewtopic.php?p=7976696#p7976696) that there is a new experimental UI for the TIPS ladder calculator here: https://tipsladder.com/spa. This new version offers a more manual way of creating a ladder, including assigning 2034 and 2040 TIPS directly to each gap year 2035-2039 in whatever proportions you desire.Upon reviewing this thread (I had been away), this is my conclusion as well.
Personally, I think the detailed analysis is converging toward a general confirmation that what people have been doing all along is good enough. That is, if filling the gap uniformly, buy excess holdings of the bracket years in roughly equal amounts. I'm not sure if Kevin would agree at this point.
Currently I have approx. 55% 2034s vs. 45% 2040s.
I have some TIPS maturing this October, and I will invest the proceeds into more 2040s, which will leave me roughly with 51% 2034s and 49% 2040s.
I think that is close enough.
In February I will buy my DARA of 2035s with roughly 5/6 (DARA) 2034s and 1/6 (DARA) 2040s...or, if I am still a little "2040 deficient" (vs. 2034s), maybe I will use only 2034s' which will leave me closer to the ideal balance for when I buy 2036-2039s. I see no reason to be precise.
Thank you, Kevin, MtnBiker and others, for doing the work!
You might find this new tool helpful for better visualization of building the excess bracket year holdings up in n/6 chunks assigned to each gap year. The tool shows the effects of coupon interest payments on each year's income, including in the gap, which is helpful for smoothing DARA when trying to get as even a balance as possible between each gap year. It also calculates the Macaulay duration of the mix of bonds assigned to each gap year, so you can confirm that the duration for the holdings for each year increases incrementally as it should from 2034 to 2040. Once completed, the ladder can be stored or printed out as a record showing how many of each bracket year bond to sell each year when swapping the proceeds for the newly issued gap-year bond.
I have not yet set up the TIPS ladder tool, though I downloaded it a while ago. It looks excellent.
I have been keeping track of my TIPS on an Excel spreadsheet, because I have been doing so since I started buying TIPS in mid-2022.
I mean to use the ladder tool at some point, but if and when I get around to it is unknown....the spreadsheet is not nearly as good but "good enough" for my purposes (knowing what I have, when it is maturing, and about what it is worth). I think I have excess maturing every year over what I will need to spend. I don't really need precision.
Statistics: Posted by protagonist — Thu Aug 01, 2024 10:33 am