Bond Strategies That Can Lock In a 5% Return on Cash
Rising Treasury yields are drawing retirement investors toward fixed-income strategies. Financial planners outline key bond approaches for securing 5% returns.
Rising U.S. Treasury yields are drawing renewed attention to bonds, particularly from investors nearing or already in retirement who want predictable, stable income, according to financial planners tracking the trend.
With yields climbing, fixed-income instruments that were long considered unattractive are once again offering competitive returns. Advisers say clients are increasingly asking how to position cash and near-cash holdings to capture rates that, until recently, had not been available for more than a decade.
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Financial planners point to several approaches for investors seeking to generate approximately 5% on their money without taking on significant credit or duration risk. Strategies typically involve laddering Treasury securities across multiple maturities, allowing investors to reinvest proceeds as bonds mature and potentially benefit if rates remain elevated.
Treasury bonds and notes carry the full faith and credit of the U.S. government, making them among the lowest-risk options available for conservative investors. For those in higher tax brackets, advisers also note that Treasury interest is exempt from state and local taxes, which can meaningfully improve after-tax yield compared with other fixed-income alternatives.
The renewed appeal of government bonds reflects a broader shift in the interest-rate environment following years of near-zero yields that pushed many income-focused investors into riskier assets. Continue reading at MarketWatch.com
