TRIPS VS BOND LADDERS
ARE TRIPS THE SAME AS BOND LADDERS?
WE ARE IN OUR MID 60’S AND ARE LOOKING FOR FUTURE INCOME
OUR FINANCIAL ADVISOR SUGGESTED A 5 TIER BOND LADDER 1,2,3,4,5 YEARS.
IS THIS A GOOD IDEA?
Terry Says
I’ve never heard the term “trips”. But a bond ladder may make sense — depending on which bonds you use!
Your broker makes a commission on the purchase of each bond, and the future purchases in the “ladder.” Now, if he/she is really a FIDUCIARY (puts your interest first, fully discloses all fees and costs), then he or she would suggest you go to TreasuryDirect.gov and create your own bond ladder — in the safest bonds. It’s just a matter of staggering purchases of different maturities of bonds.
No fees or commissions. You can do that on your own! Read this article.
