Liability matching with short-term TIPS?

[plodding_investor]

So I have a few recurring (and a few non-recurring) expenses coming up over the next several years (between 6 mos to 3 years). I've been thinking about putting that money into Treasuries. But then, I wondered if it might not be a bad idea to put it into short-term TIPS instead given the current inflationary/possibly recessionary environment. I plan to spend that money on maturity. Is there any reason not to consider TIPS instead of nominal treasuries? And does anyone know if Vanguard reports the phantom income that must be reported to the IRS? Just wondering since that aspect of purchasing TIPS in a regular account can be a bit tricky.

Thanks for any insights.

[james.hendrickson]

One thought: the risk is a wash between both options. They're both backed by the full faith and credit of the US government, so they are both as risk free as possible.

The major issue seems to be expectations regarding interest rates and inflation. If you think these metrics are likely to change, then getting something short term seems like a better bet to me.

[plodding_investor]

One thought: the risk is a wash between both options. They're both backed by the full faith and credit of the US government, so they are both as risk free as possible.

The major issue seems to be expectations regarding interest rates and inflation. If you think these metrics are likely to change, then getting something short term seems like a better bet to me.

Thank you! Do you happen to know whether Vanguard would report the phantom income on TIPS by any chance? I realize that's kind of a shot-in-the-dark question, but apparently that's an issue with purchasing TIPS in a taxable account, and some avoid purchasing them in taxable for that reason (as you need to have the funds available to cover those taxes).

[james.hendrickson]

Thank you! Do you happen to know whether Vanguard would report the phantom income on TIPS by any chance? I realize that's kind of a shot-in-the-dark question, but apparently that's an issue with purchasing TIPS in a taxable account, and some avoid purchasing them in taxable for that reason (as you need to have the funds available to cover those taxes).

No idea Plodding, but usually the better brokerages have people on staff who know how to answer these kinds of specifics. I am thinking Vanguard probably does. You may just need to work the phone a bit.

[plodding_investor]

No idea Plodding, but usually the better brokerages have people on staff who know how to answer these kinds of specifics. I am thinking Vanguard probably does. You may just need to work the phone a bit.

Yep, certainly a good point. Thank you.