TIPS Ladder Calculator: Size Your Inflation-Protected Income Floor

A TIPS ladder funds your essential retirement expenses with Treasury Inflation-Protected Securities — one bond maturing each year, automatically inflation-adjusted, backed by the U.S. government. Enter your income gap (the shortfall after Social Security and pension) to see exactly how much to invest and what your portfolio looks like once the floor is in place.

What a TIPS ladder is — and why it matters

Most retirement planning focuses on probability of survival: will the portfolio last 30 years? A TIPS ladder answers a different question — it eliminates that uncertainty for your essential expenses by matching each year's income to a specific bond that matures that year.

Each year, you own one TIPS bond whose maturity date falls in that calendar year. When it matures, you receive the inflation-adjusted principal. Between now and maturity, the bond pays semi-annual coupon interest. The result: your essential expenses are funded by U.S. government bonds, not by portfolio performance. Markets can crash on the day you retire — your floor income is unaffected.

A TIPS ladder simultaneously addresses three retirement risks:

• Market risk — eliminated for floor income. U.S. government guarantee.
• Inflation risk — eliminated. TIPS principal adjusts with CPI-U automatically.
• Sequence-of-returns risk — eliminated. No forced selling during downturns to fund essentials.

What it doesn't address: longevity risk (a 30-year ladder ends at age 95 for a 65-year-old), and it requires managing individual bond positions rather than a simple index fund. See the income floor strategy guide for how to pair a TIPS ladder with a full retirement income plan — including how to handle the gap between when the ladder runs out and when you die.

TIPS real yields: what the calculator uses

Unlike nominal Treasury yields, TIPS real yields are the return above CPI inflation. As of May 2026, TIPS real yields have risen substantially from their near-zero levels during 2020–2022, making TIPS ladders meaningfully more cost-effective than they were for the prior decade.¹

Yields approximate as of May 2026 (FRED DFII10 and DFII30 series). Actual market yields change daily — enter the current rate in the calculator above for precise estimates.

How to build a TIPS ladder in practice

Option 1: TreasuryDirect (new issues only)

The U.S. Treasury auctions TIPS at 5-year, 10-year, and 30-year maturities. At TreasuryDirect.gov you can buy at auction for free. But available maturities are limited — you can't buy a 7-year or 12-year TIPS directly at auction, so TreasuryDirect alone can't build a complete year-by-year ladder.

Option 2: Secondary market through a brokerage

Fidelity, Vanguard, Schwab, and other brokers offer secondary-market TIPS at virtually any maturity from 1 to 30 years. This lets you build a true year-by-year ladder. Transaction costs are typically $1/bond with a $10 minimum; many brokers now charge zero commission for Treasury bonds. Bid-ask spreads are typically 0.05–0.10% of par value.

TIPS ladder vs. SPIA: filling the floor gap

For a deeper look at SPIA payout math, the exclusion ratio tax calculation, and how to shop carriers without a commission conflict, see the annuities for retirement income guide.

Key limitations

• Illiquidity after deployment. Once capital is committed to individual TIPS bonds, repurposing it requires selling on the secondary market at whatever real yield prevails at that time — potentially above or below your purchase yield.
• TIPS track CPI-U, not your personal inflation rate. Medical costs and long-term care often inflate faster than CPI-U. For healthcare-heavy retirees, a TIPS ladder may underperform relative to actual expense growth. See the healthcare costs in retirement guide for how to plan for this gap.
• Phantom income tax drag in taxable accounts. TIPS coupons are taxable as ordinary income, and the annual inflation adjustment to principal ("phantom income") is also taxable in the year it accrues — even though you don't receive cash. TIPS ladders work best held inside traditional IRAs, where taxes are deferred until withdrawal.
• No simple fund equivalent. TIPS index funds (VIPSX, SCHP, LTPZ) hold diversified TIPS portfolios but don't deliver a fixed year-by-year payment schedule. They're useful for inflation hedging but aren't a substitute for a true ladder.

Who should consider a TIPS ladder

A TIPS ladder is a strong fit when:

• Your essential expenses exceed your guaranteed income (Social Security + pension) by a meaningful and persistent gap.
• You have a strong aversion to market risk in the income funding non-negotiable expenses.
• Enough savings remain after the ladder to leave a meaningful upside portfolio for discretionary spending and legacy.
• You can hold the ladder in a traditional IRA — shielding coupon and phantom income from annual taxation.
• You've already delayed Social Security to maximize your COLA-adjusted floor, and still have a gap remaining.

It's a weaker fit when essential expenses are already fully covered by Social Security and a defined-benefit pension, you have a strong bequest motive (a TIPS ladder is not efficient legacy capital), or you strongly prefer simplicity over precision in portfolio management.

For a complementary probabilistic approach to the same question — what's the probability this plan survives? — see the Monte Carlo retirement simulation calculator.