Congratulations on making it to the “home stretch!” We offer both new issue and secondary market Treasury inflation-protected securities (TIPS). Inflation is one of five key risks, along with longevity, withdrawal rate, asset allocation, and health care expenses, that we believe all investors should address as part of their retirement plans. TIPS are certainly an investment vehicle that can help mitigate the risk of losing buying power over a long retirement. As part of our overall bond and fixed income investment services, we have a center on our website that you can use to research and purchase TIPS. We also have fixed income specialists you can talk with over the phone.
To access TIPS from our fixed income/bond site, go to www.fidelity.com
, select the green Research tab at the top of the home page, then Fixed Income & Bonds. Under the heading Find Bonds and CDs, you will see a link for Individual Bonds just above the Yield Table. Select that link, and then you can begin searching for the TIPS you are interested in.
If you select Secondary Markets, you can modify some of the variables but since the universe of TIPS is small and finite you may as well choose a appropriate maturity and go straight to the Find button to see your results. Note that the earliest maturity we offer is 2021. This is because of the challenge of the shorter maturities having a negative yield, so we filter those out. That notwithstanding, as of today, there are 20 secondary TIPS available from 2021–2044.
We also offer periodic auctions on TIPS—that is, to purchase them as a new issue. The best way to stay informed here is to sign up for new issue fixed income taxable alerts and you’ll be sent an alert ahead of the auction date. Visit the following page to find out more about fixed income alerts and to sign up: https://www.fidelity.com/fixed-inco...
Please don’t hesitate to set up an appointment with us if you want to review your overall retirement income plan. As I mentioned, we believe all investors should go into retirement with their eyes open. If you would like to bounce some ideas off one of our specialists, I would suggest calling a fixed income specialist at 800-544-5372.
I hope this helps.
Important Additional Information:
Lower yields - Treasury securities typically pay less interest than other securities in exchange for lower default or credit risk.
Interest rate risk - Treasuries are susceptible to fluctuations in interest rates, with the degree of volatility increasing with the amount of time until maturity. As rates rise, prices will typically decline.
Call risk - Some Treasury securities carry call provisions that allow the bonds to be retired prior to stated maturity. This typically occurs when rates fall.
Inflation risk - With relatively low yields, income produced by Treasuries may be lower than the rate of inflation. This does not apply to TIPS, which are inflation protected.
Credit or default risk - Investors need to be aware that all bonds have the risk of default. Investors should monitor current events, as well as the ratio of national debt to gross domestic product, Treasury yields, credit ratings, and the weaknesses of the dollar for signs that default risk may be rising.