Treasury Inflation Protected Securities (TIPS)

[mutton$]

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What are your thoughts on TIPS for investment?

Is it better to buy into TIPS versus catch-up contributions into TSP? My TSP is maxed out, and I have a little extra cash to play with right now. What do you recommend?

 

[Guest]

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Fund your ROTH IRA.



I bonds are better then TIPS.

TIPS you have to pay fed tax each year.

I bonds you only pay tax until you cash them in.

You have to hold a I bond for a min of 12 months but they are paying 4.80%.

TIPS min you can buy is the 2 year and the yield is only around 3.5%

I bonds are the way to go right now, IMHO.

But fund the ROTH IRA first.

Of course you do not have credit card debt andhave afixed mortgage?

If you don't then tackle those issues first.

Once the bankrucpcy thing kicks in the credit card rates can fly through the roof. No liability for credit card companies to extend credit. Anyone with a pulse will get pre approved for 50K credit cards. The competetion will be the other way. Instead of low interest rates it will be who can doleout the highest limits.

- The bottom line is GREAT.

 

[mutton$]

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By I bonds, are you talking about Inflation Savings Bonds that you hold for 12 months?

 

[grandma]

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DMA wrote:

.....I bonds you only pay tax until you cash them in.

Misprint??

 

[Guest]

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grandma wrote:

DMA wrote:

.....I bonds you only pay tax until you cash them in.

Misprint??

Taxable event when you cash them in (redeem them). Until that point they grow tax free.

Used correctly they can be totally tax free. College expenses is one example.

No, that was not a misprint.

 

[Guest]

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mutton$ wrote:

By I bonds, are you talking about Inflation Savings Bonds that you hold for 12 months?

Yes. But tackle the ROTH IRA first. IMHO.

Good luck.

 

[grandma]

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DMA wrote:

grandma wrote:

DMA wrote:

.....I bonds you only pay tax until you cash them in.

Misprint??

Taxable event when you cash them in (redeem them).

Okay - got it -

 

[Guest]

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No worries Grandma.

Glad we cleared that up.

Thought you would like this guy.

 

[mutton$]

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Thanks to all :i

 

[pyriel]

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Hmmm... If i had to choose between the two, I would say ROTH IRA. But ifI can do both, I would do ROTH and catch up. ROTH also has a catch up so i'd do that too....

 

[Guest]

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I am with your Pryiel.

Get a nice short term bond investment grade fund started in your roth IRA. Get them dividends working for you at this point in the economic cycle.

Avoid junk bonds right here. Believe GM, Fannie, Freddie, etc or all of them are going to blow up.

IMHO.

 

[Show-me]

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pyriel wrote:

Hmmm... If i had to choose between the two, I would say ROTH IRA. But ifI can do both, I would do ROTH and catch up. ROTH also has a catch up so i'd do that too....

pyriel,

ROTH has a catch up?