Date: Fri, 27 Jan 2006 15:58:17 -0600
From: "Bucky" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Q. about how to live off a million dollars
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Michael Sullivan wrote:
> Invest in I-bonds, which match inflation plus 2ish% -- live on the 2%.

That's not a bad idea. But the goofy issue with I-Bonds is that you
have to pay federal tax. If inflation is 4%, then your composite
interest is about 6%. But then you pay about 25% of that in tax, so
you're left with 4.5%, which is only 0.5% real return, which is only
$10,000. In times of very high inflation, your after tax return will
not keep up with inflation.

BreadWithSpam@fractious.net wrote:
> They currently pay only 1% above inflation, too.

orpheusNY  writes:
> > You can only put 30k a year into I-bonds, no? How is that going to serve
> > someone with 2 million to invest?

Good point. They can invest in TIPS though, which are currently
yielding 2%.