What are TIPs?
- What's a bond?
- How much money can I make on a bond?
- How do bond returns compare with stock returns?
- What are the advantages of bonds for retirement?
- What are the risks in bonds?
- What are TIPs?
- Which bonds are good for a retirement portfolio?
- How should I buy bonds?
- Should I buy short-term or long-term bonds?
- How much of my portfolio should be in bonds?
- How are bonds taxed?
TIPS are Treasury Inflation Protected Securities, and they can be a terrific idea for retirement investors.
TIPS pay a fixed coupon rate of interest that's lower than that of regular Treasury bonds. But the principal, or face value, of TIPS is adjusted to keep pace with changes in the consumer price index. The result is that as inflation rises, so do the interest payments and the face value of your TIPS. That gives you a sure hedge against inflation - a great thing if you're worried about outliving your money in retirement.
