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TIPS Tips: Protect Your Retirement Savings From Inflation Now
TIPS Tips: Protect Your Retirement Savings From Inflation Now
It’s hard to find a more confusing “safe” investment than government bonds called TIPS, for Treasury Inflation-Protected Securities – and that includes taxes on these securities. But those who avoid them today could be making a mistake, especially if they’re nearing retirement.
No wonder investors are confused. TIPS claim to offer protection against inflation, but last year, when inflation soared, many holders of funds with longer-term TIPS experienced sharply negative returns. This is because TIPS, like other bonds, suffer when interest rates rise.
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