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Since "I" bonds are currently paying 7.49% does anyone
think a retirement portfolio invested 100% in "I" bonds
would last if there was a 7% withdrawal rate. Any
thoughts would be appreciated.
Thanks, Gene
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echo222 asks,

Since "I" bonds are currently paying 7.49% does anyone think a retirement portfolio invested 100% in "I" bonds would last if there was a 7% withdrawal rate. Any thoughts would be appreciated.
Thanks, Gene


Which I-bonds pay 7.49%? The yield on the 30-Year TIPS maturing in April 2029 is 3.92% as reported in the Wall Street Journal.

Most of the reputable long-term studies on retirement withdrawals show that you must limit your inflation-adjusted withdrawals to about 4% of assets to remain "100% safe."

intercst

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If you follow this link:

http://www.savingsbonds.gov/com/comi500.htm

It shows the current I-bond rate, which is a slightly different animal than a 30-year TIPS since one can cash in an I-bond at any time over the course of 30 years and get the money. Also, I suspect that a TIPS pays semi-annual interest that is taxable immediately, while I-bonds defer taxes, as these are another class of savings bond in essence.

It should be noted that the rate on an I-bond is subject to change every 6 months and may well drop below 7% due to inflation dropping enough or the fixed portion decreasing.

Here's a link to more about I-bonds:

http://www.savingsbonds.gov/sav/sbifaq.htm

JB
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