Abstract
This article argues that long-duration Treasury Inflation-Protected Securities (TIPS) should play an important role in the portfolios of workers who are within 10 to 20 years of retirement. Long TIPS effectively help hedge retirees against fluctuations in the real wealth required to sustain a given level of consumption in their retirement years. As such, long-duration TIPS act as the “risk-free asset” in the context of retirement savings, and, for investors on a reasonable savings path, an allocation to this asset class may increase the likelihood of a successful retirement outcome. <b>TOPICS:</b>Retirement, fixed income and structured finance, portfolio construction
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