Why this corner of your portfolio suddenly matters
For most of the 2010s, parking money safely meant earning almost nothing. That has changed. As of June 5, 2026, the yield on the 10-year U.S. Treasury note was about 4.52%, climbing above 4.5% after a strong jobs report, according to CNBC and the Federal Reserve's daily H.15 release tracked in the FRED database series DGS10 (St. Louis Fed). For a retiree who wants income without betting on the stock market, that is a real number you can build a plan around.
Treasuries: the foundation
U.S. Treasury securities are loans you make to the federal government, and they are backed by its full faith and credit. Treasury bills mature in a year or less, notes run two to ten years, and bonds stretch to 30 years. You can buy them with no fees directly at TreasuryDirect.gov, or through a brokerage. The key idea for a retiree: if you hold a Treasury to maturity, you get your principal back plus the stated interest, regardless of what prices do in between. As of early June 2026, FRED's constant-maturity series show yields clustered in the mid-4% range across most maturities, with the 5-year (DGS5) and 10-year (DGS10) both near 4.5% (St. Louis Fed).
TIPS: built-in inflation protection
Treasury Inflation-Protected Securities, or TIPS, adjust their principal up with the Consumer Price Index, so your payout rises if inflation does. The trade-off is that you accept a lower starting (real) yield in exchange for that protection. The Treasury's inflation-indexed 10-year series (FRED DFII10) lets you see the real yield on offer at any time (St. Louis Fed). For a retiree whose biggest fear is that rising prices erode a fixed income over a 25- or 30-year retirement, TIPS are worth understanding. They are best held in a tax-advantaged account, because the annual inflation adjustment can be taxed before you actually receive it.
I-bonds: the small but steady cousin
Series I savings bonds are the retail version of inflation protection, sold only at TreasuryDirect.gov. For bonds issued from May 2026 through October 2026, the composite rate is 4.26%, made up of a 0.90% fixed rate locked in for the life of the bond plus an inflation component that resets every six months, per the U.S. Treasury's May 1, 2026 announcement and the independent tracker TIPSWatch.com. The catches: you can buy only $10,000 per person per year electronically, you cannot cash out in the first 12 months, and redeeming before five years forfeits the last three months of interest. For an emergency reserve that quietly keeps pace with inflation, I-bonds are hard to beat.
CDs: simple and insured
Certificates of deposit are time deposits at a bank or credit union, insured by the FDIC (or NCUA at credit unions) up to $250,000 per depositor, per institution. As of June 2026, Bankrate listed top nationally available CDs paying up to about 4.20% APY, and NerdWallet listed offers reaching 4.30% APY. Note the gap between the best rates and the average: Bankrate reported the national average one-year CD APY at just 1.98% as of June 6, 2026, so shopping around can more than double your yield. The trade-off versus a Treasury is an early-withdrawal penalty if you need the money before the term ends, and CD interest is taxed at the state level while Treasury interest is not.
How a bond ladder works
A bond ladder is simply a set of bonds or CDs that mature on a staggered schedule, for example $20,000 each maturing in one, two, three, four, and five years. As each rung comes due, you either spend the cash or reinvest it at the longest rung. This does two useful things: it gives you a predictable stream of maturing money to live on, and it spreads out interest-rate risk so you are never forced to reinvest everything at one moment. With most maturities yielding in the mid-4% range in June 2026 (FRED constant-maturity series), a five-rung Treasury or CD ladder can lock in roughly that rate while keeping cash flowing every year.
Matching the tool to the job
A practical way to think about it: money you may need within a year fits short Treasury bills, a high-yield savings account, or a no-penalty CD. Money for the next two to five years fits a Treasury or CD ladder. Money you want to protect from inflation over the long haul fits TIPS or I-bonds. And money you will not touch for a decade or more is usually where stocks still belong, because bonds alone rarely outrun inflation by much over 20-plus years.
Put it to work with a calculator
How much of your nest egg should sit in this safe-income menu versus stocks depends on your spending needs and your other income, such as Social Security and any pension. To see how a ladder of Treasuries, CDs, and I-bonds might cover your annual spending, try our <a href="/calculators/retirement-income">retirement income calculator</a>, which lets you map guaranteed income against your expenses before you commit to any single product.
A few honest caveats
Higher yields come with real trade-offs. If you sell a long-term Treasury before maturity and rates have risen, you can lose principal. CDs lock your money up. I-bonds have purchase limits and a one-year lockup. And even 4.5% may not feel like much after taxes and inflation. The point is not to chase the single highest number, but to match each dollar to when you will need it, so you are never forced to sell something at a bad time.
This article is educational and not personalized financial advice. All investing carries risk and past performance does not guarantee future results. Consider consulting a fiduciary financial advisor about your situation.