Government Securities

You are correct that Treasury Inflation-Protected Securities (TIPS) still offer a meaningful, risk-free advantage because they are explicitly designed and government-backed to maintain your purchasing power against inflation.

However, the key difference is that, unlike volatile commodities or equities, TIPS provide stability by adjusting the principal in line with the CPI. They are incredibly appealing to conservative investors, and frankly, they absolutely belong in any well-diversified portfolio to balance risk and provide a safety net against unexpected inflation.

Longer-duration bonds can be a bit tricky since they tend to be more volatile, but they usually provide better returns over time. They’re a good fit for individuals who can hold onto their investments for a while and are comfortable taking on some risk.

On the flip side, short-term bonds are much steadier. They help protect your money because they're less affected by changes in interest rates, making them a safer choice, especially when people expect rates to rise.

So, in my opinion, having a mix of both long and short-term bonds is probably the best way to create a strong investment portfolio.

Yes, the U.S. Treasury’s guarantee that Series EE Savings Bonds will double in value after 20 years makes them an appealing choice for anyone looking to protect their hard-earned cash. If you’re a conservative investor who prioritizes stability over rapid gains, these bonds could be just what you need. With the government backing them, you can rest easy knowing you have chosen a dependable option for long-term financial security.

You are on the right track!!! If you have already reported the full interest income from the 1995 Series I bond on your 2024 tax return, then there is no need to report it again now.

So for now you can ignore the 1099-INT for 2025, but still you need to enter it and deduct the amount you previously reported on your 2024 return. If you do this, the IRS will get to know that you have already paid the tax on that interest.

Tax-exempt municipal bonds and US Treasury bonds are good options for safe income. Municipal bonds offer tax-free interest, and Treasury bonds are taxable but exempt from state taxes. They offer consistent income without touching your principal.

A Texas municipal bond priced at 102 signifies you're paying $1,020 for a $1,000 face value bond, known as buying at a premium. This typically means the bond's yield is below its coupon rate.

Factors Influencing Pricing:

Several elements affect this pricing, including prevailing interest rates, the bond's credit quality, its maturity date, and market supply and demand. The bond's tax benefits also play a crucial role, as they can enhance its appeal.

Your ultimate after-tax return hinges on both the bond's tax-exempt status and its yield to maturity relative to its purchase price.