Tags: Retirement | retirement | intermediate | Treasury bonds

Intermediate-Term Treasury Bonds and Your Retirement Planning

By    |   Tuesday, 16 June 2015 09:38 PM

Intermediate-term treasury bonds are sometimes considered the Goldilocks of investments for retirement planners and wealth managers, falling between the 30-year wait for a long-term U.S. bond to reach maturity and the 52-week turnaround of a short-term T-bill.

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Zacks Equity Research describes bond funds made up of intermediate-term treasuries — in which government-backed, fixed-income debt securities typically mature in three to 10 years — as "sweet spots across the yield curve" because they don't have the same limits on income as short-term bond funds, and they don't have the decades-long window or the volatility of 30-year products.

The Motley Fool investment advisers recommend these types of investments for retirement planning when you're within one to five years of needing to withdraw the money they produce.

"If you're going to choose a bond fund, stick with short- to intermediate-term bonds (i.e., bonds that mature in two to five years)," the Motley Fool explains. "And be vigilant about costs — you can find plenty of good funds with expense ratios below 0.50%."

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A product that fits the Motley Fool's bill is the Vanguard Intermediate-Term Treasury Fund Investor Shares (VFITX) fund, which invests in bonds "backed by the full faith and credit of the U.S. government."

This is one of several Vanguard financial products dealing in intermediate-term debt issued and/or guaranteed by the U.S. government that have the Fool-recommended expense ratio that falls well below 0.50 percent and work with three- to 10-year maturity ranges.

Investment adviser and writer Paul A. Merriman likes Vanguard-class intermediate-term funds for use in taxable retirement accounts, according to MarketWatch.

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Intermediate-term treasury bonds are sometimes considered the Goldilocks of investments for retirement planners and wealth managers, falling between the 30-year wait for a long-term U.S. bond to reach maturity and the 52-week turnaround of a short-term T-bill.
retirement, intermediate, Treasury bonds
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2015-38-16
Tuesday, 16 June 2015 09:38 PM
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