Are TIPS Worth Adding To Your Retirement Portfolio?

With the growing US federal deficit, tariffs, fears of recession, and upcoming tax breaks, inflation is a top concern in the minds of many retirees and soon-to-be-retirees.

Investing in TIPS, or Treasury Inflation-Protected Securities, is one of the most commonly touted strategies that can help stave off unexpected inflation, however there are still important risks to understand. 

Can TIPS really preserve your purchasing power in a meaningful way and kill off inflation no matter what happens in the markets or economy? Or are they just another government bond with a fancy name and a built-in marketing hook?

More specifically, I discuss:

• What are Treasury Inflation Protected Securities (TIPS)?
• How do TIPS work? How are they different from traditional (nominal) bonds?
• Important things to know when purchasing TIPS
• Individual TIPS vs. mutual funds and ETFs that invest in TIPS
• Potential risks of investing in TIPS
• Tax ramifications of TIPS
• Why would a pre-retiree or retiree consider adding TIPS to their portfolio?

Resources From The Episode:

• Retired-ish Newsletter Sign-Up
• Get Show Notes Here

Key moments:

(02:35) Understanding TIPS: The Basics

(08:55) Important Things to Know When Buying TIPS and/or TIPS Fund

(15:09) Some Risks With TIPS

(19:03) Tax Implications of TIPS

(23:32) Should You Consider Investing in TIPS?