How RetIQ Models Fixed Income

Not all retirement money is meant to grow. Some of it exists to pay you, and choosing what to hold for that income is harder than it looks.

The menu runs from Treasuries and municipal bonds to corporates, agencies, CDs, TIPS, and zeros, and the differences between them go well beyond yield. Treasury interest escapes state tax; municipal interest escapes federal tax. Buy a bond above face and part of that premium comes back to you over the years, credited or not depending on accounting most people never do. Buy a zero and it pays you nothing until maturity, while the tax on it arrives every year in the meantime.

One wrong choice is easy to miss. A ladder is a dozen of them, and the misses accumulate.

So RetIQ models the ladder you actually hold, rung by rung. You give it a face value, a coupon, a maturity. It gives back the yield as the rungs roll off, the principal as it returns, and the tax treatment of each bond — state-exempt Treasury interest, federally exempt munis, an amortized premium, the annual tax on a zero or a TIPS that never lands in your account.

If you sell a rung early, or the issuer calls it, RetIQ follows the basis so you aren’t taxed twice on income you already reported. If you keep the ladder rolling, it can reinvest each maturing bond at a rate you set.

Fixed income holds a lot of retirement money, and the tax rules around it decide whether that money is quietly won or lost. Getting those rules right is the whole job.