No. of Recommendations: 0
>>>>Buy TIPS (Treasury Inflation Protected Securities). These currently pay a fixed interest payment of about 4% a year,
corresponding to the assumed 4% withdrawal rate discussed above. Each year, the principal amount is increased by the
inflation rate, which causes cash income to rise in the next period by that rate of inflation. So, you start with a 4%
withdrawal rate, the level of cash withdrawn increases with inflation, and you never touch the principal.<<<<

This theory could be MUCH better accomplished through buying stock in a company that pays about a 4% dividend, has increased it's dividend rate consistently by several % each year, AND offers an added benefit of capital appreciation(e.g. RPM, MO, most utilities and REITs, XOM, etc.). The ONLY added risk being that it's NOT guarranteed like a gov. security is. Four stocks like this, with scattered payout dates, and you'd have income EVERY month that would "at least" keep pace with inflation. Good luck.
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.