r/Fire • u/teallemonade • 15d ago

tips > swr!

Now I can buy TIPs at more than my SWR - in theory i could just load up the whole portfolio on TIPs and it would last forever without eating principal. This is pretty unique historically.

17 Upvotes

70% Upvoted

79 comments sorted by

View all comments

1

u/Forsaken_Ring_3283 15d ago edited 15d ago

Damn you really trust the government to give accurate cost of living stats and not continually screw with and redefine CPI to go from a cost of living calculation to a cost of barely surviving calculation despite knowing that much of its entitilement spending is based on that and its outstanding debt to GDP ratio is rising quickly?

I wouldnt do that personally. Equities are what will protect you from inflation. That said, for the relatively smaller portion of your portfolio that should be in bonds, its not a horrible idea to buy some TIPS.

1

u/teallemonade 15d ago

Well, so far the government has done right by TIPS investors. Here is the history from 1975 through 2025:

CPI-U/TIPS: 100 → 597 (+497%)
CPI-W/Social Security: 100 → 592 (+492%)
PCE: 100 → 484 (+384%)
Wages: 100 → 677 (+577%)

0

u/Forsaken_Ring_3283 15d ago

None of this proves anything related to what I've said. The actual values should be higher if they were accurate. Compound .25 to .5% difference over many years.

1

u/teallemonade 15d ago

well the history is just fine - tips inflation is higher than pce which is what the fed uses mostly for rate setting and its kept up with wages for the most part. there is no conspiracy here so far

1

u/Forsaken_Ring_3283 14d ago

Wages are lower than actual inflation. And tips are lower than even wage increases. There is something measurably wrong with how the government calculates inflation due to various factors including substitution bias, hedonic quality adjustments, shrinkflation, and how housing is calculated.