Tag Archives: TIPS
Income-Focused Strategy Indices Show Resilience in 2020 (Part 2)
In part 1 of this blog, we saw how falling real interest rates reduce the retirement income a given account balance can support. In part 2, we focus on how interest rate risk may potentially be managed through an income-focused asset allocation. The S&P STRIDE (S&P Shift to Retirement Income and Decumulation) indices measure the…
- Categories Fixed Income, Strategy
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Income-Focused Strategy Indices Show Resilience in 2020 (Part 1)
Retirement investors faced numerous investment headwinds in 2020. In addition to heightened volatility in the stock market, they had to cope with falling interest rates on both regular and inflation-indexed bonds. Real interest rates, interest rates that have been adjusted to remove the effects of inflation, are especially relevant for retirement investors because lower real…
- Categories Fixed Income, Strategy
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U.S. Treasuries Sold Off with Rising Breakeven Inflation in January
The year 2021 started with a continuous sell-off in the U.S. Treasury bond market. Starting on the second trading day of the year, yield on the 10-year U.S. Treasury Bond rose for five consecutive trading days by 23 bps until Jan. 12, 2021, when strong auction results for the 10-year note pulled the yield back…
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Tracking The Cost of Retirement Income
One of the main risks for retirees is not having enough inflation-adjusted income in retirement to support their desired standard of living. The S&P STRIDE (S&P Shift to Retirement Income and Decumulation) Indices attempt to solve this problem by focusing explicitly on reducing the volatility of income rather than reducing the volatility of returns. In…
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Setting Income Goals For A Winning Retirement
“You Keep Livin’, We’ll Keep Payin’” – lottery spokeswoman, Christy Calicchia. Most people, while they only dream of winning a lottery, understand the concept between a big lump sum payout and an annuity that says something like “either win $1 million today or win $1,000 a week for life.” Though the concept is clear, and in…
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How Much Will My Retirement Income Cost? Part 2
Understanding how much future spending, or consumption, an investor’s savings can support is critical in planning for retirement. As we discussed in part 1, the S&P STRIDE Index Series can help by providing a framework for estimating the annual income stream available in retirement using the concept of the Generalized Retirement Income Liability or “GRIL”…
- Categories Equities, Fixed Income, Uncategorized
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- Equities, Fixed Income, Uncategorized
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How Much Will My Retirement Income Cost? Part 1
Gaining clarity around the future spending, or consumption, that an investor’s savings can support is critical in planning for retirement. Being armed with information about retirement preparedness can inform one’s decisions about savings rate, expense budget in retirement, and investment selections. A first step towards solving this challenge is to understand how much retirement income…
- Categories Equities, Fixed Income, Uncategorized
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- Equities, Fixed Income, Uncategorized
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Spending Too Little In Retirement?
Yes, you read that right. You might not be spending enough in retirement. It seems impossible after rigorously following savings plans during the course of your career in order to achieve that golden nest-egg to provide just what you need to retire. However, a problem arises when “what you need to retire” might not be…
- Categories Equities, Fixed Income, S&P 500 & DJIA
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2017 Retirement Funding Update for DC Account Holders
2017 was generally kind to U.S. shareholders of domestic and international equities, but long-term U.S. Treasury Inflation-Protected Securities (TIPS) rates drifted downward, increasing the present value of future inflation-adjusted cash flows discounted to the TIPS curve. An important question for retirement savers may be whether investment returns outpaced the increased cost of securing future in-retirement…
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Tuition Inflation: Indexing the Rising Cost of College
Costs associated with college tuition and fees have far outpaced general U.S. inflation, so for individuals saving for college, the ability to accurately measure and potentially keep pace with tuition inflation is important. Recently, in this video, S&P Dow Jones Indices joined with Enduring Investments to discuss the newly launched S&P Target Tuition Inflation Index. Below is a summary of the questions and…
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