Investing - Theory, News & General • Re: TIPS fund + I Bonds to simulate TIPS ladder?

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With nary an exception, each of the TIPS discussions came with a loud caveat that a fund is not a ladder (which seems axiomatic, but nonetheless is oft-repeated).
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But it is a ladder, a rolling ladder not a collapsing one.

One of the threads has a post by BobK discussing the use of Series I Savings bonds in latter retirement years (IIRC in the context of using two different ETFs instead of a TIPS ladder).

It makes sense that it could be used as a 0 duration "fund" as part of a collapsing ladder substitute.

If you're combining a TIPS index fund, current duration about 6.5 with a duration 0 fund, the result will be an even shorter duration. The 6.5 would be duration matched to a 13 year retirement, as I understand it. Duration matching would have you withdraw mostly from the TIPS fund first, in order to match remaining duration as it gets shorter.

I'm not sure what withdrawing from it only when the NAV has not declined (declined from what ) would mean with regard to the duration over time. But since higher interest rates would cause a decline in NAV and shorten duration, it makes sense that you might withdraw a bit more from I-bonds after a decline in the NAV when doing duration matching.

The less than 6.5 duration of a mix of a TIPS index and I-bonds may not be a good match for someone entering retirement. One way duration could be increased would be to add a single long term TIPS to the mix. So then it would be a mix of a single long term TIPS, TIPS index fund, and I-bonds. More or less the same thing could be accomplished with a short term TIPS fund in place of the I-bonds, but if one is entering retirement with a bunch of I-bonds, this could be a way to employ them.

Thanks for your post. Just mulling this over and thinking that on January 2 of each year $x CPI-adjusted dollars would be withdrawn from FIPDX. That remaining fund value would be used as the high water mark for the following January 2. If the value of FIPDX is above that level, the next withdrawal will be taken from FIPDX. If it has dropped below that (for whatever reason, including interest rate changes) then that yearly withdrawal will be taken from I Bonds.

Above theoretical construct predicates someone who does not want to deal with a TIPS ladder, and has ample I Bonds.

Statistics: Posted by AlwaysLearningMore — Mon Aug 17, 2026 9:08 am