If you need the equivalent of $50,000 in today's dollars come October 2033, you need to run the formula using the current real yield which was 2.13 as of last Friday's close. Allan Roth illustrates the formula he used here:I need $50,000 around October 2033. I would like to buy iShares iBonds IBIJ etf.
How many shares of IBIJ ($24.99) do I need to buy to have $50,000 plus inflation dollars if I reinvest the dividends and cash out in Oct 2033?
Thanks
https://www.etf.com/sections/features/c ... -tips-etfs
Using those parameters of the current real yield being 2.13% for the IBIJ, purchasing $41,360.90 worth of shares and letting dividends reinvest would get you to the $50K in 2033 at maturity in 9 years. More or less 1655.09 shares at Friday's closing price. Adjust your parameters for the yield and price after today's close.
Plug your numbers into the backward rate inflation calculator here:
https://www.calculator.net/inflation-ca ... e#backward
Somebody else can jump in if that is not the correct way to calculate it.
Statistics: Posted by CyclingDuo — Tue Jan 21, 2025 6:21 pm