Real Bonds and Inflation Protection for Retirement

P. Brett Hammond, Director of Strategic Research, TIAA-CREF

March 1996 | Issue # 47

This issue describes how retirement service providers can offer opportunities to improve inflation protection in retirement through product design, services, and educational programs. A new product (later introduced by TIAA-CREF) with potential for a participant's or retired annuitant's inflation-fighting mix, is an inflation-indexed annuity based on inflation-indexed government bonds, or “real” bonds. The experience of inflation-indexed bonds in the United Kingdom is described and the advantages of “real bond” annuities are outlined.

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