Treasury Inflation Protected Securities (TIPS) are a Generational Bargain Right Now

TIPS are US Government securities that currently pay two to three percent real return depending on the maturity selected. You can buy them from your broker, Treasury Direct account, Exchange Traded Funds (ETFs) and mutual funds. So, if inflation for a time period is three percent, your bonds earn five to six percent depending on the time period. These real returns are guaranteed by the US Treasury. I will not give all the details here and am not giving advice. Any retiree who needs bonds in their portfolio should look into TIPs. Talk to your financial advisor or wealth manager. This opportunity will not last forever. I welcome polite comments.

A few commenters said they do not understand how TIPS work, so here is a brief review. If you own a $1,000 valued TIP and annual inflation is 2%, the value of the TIP will increase t0 $1,020. Interest is paid every six months and is calculated on the adjusted value. So, the value of your bond increases with inflation and the interest paid increases as well due to the higher value of the TIP. Keep in mind that the value of the TIPs fluctuates just like it does for regular bonds, but if you keep them to maturity, the fluctuations do not matter. Also, the TIPS interest rate is lower than regular Treasury bonds. Buying TIPS instead of regular Treasuries maintains your purchasing power. Your purchasing power declines with regular Treasuries. I hope this is clear.