Discovering Fixed Income Investments for Seniors in the United States in 2025

Did you know that 2025 brings a variety of fixed income options—each with unique yields, tax advantages, and risk profiles—well suited to seniors’ retirement goals? From ultra-safe Treasuries to higher-yield municipal bonds, IRA CDs, annuities, and more, you can tailor a portfolio that balances income needs and capital preservation.

U.S. Treasury Bonds

Why choose them? Backed by the full faith and credit of the U.S. government, Treasuries are ideal for capital preservation and liquidity.

10-Year Treasury Yield (mid-2025): ~4.33% Reuters
Liquidity & Risk: Highly liquid, virtually no credit risk
Tax Treatment: Interest taxed federally, but exempt from state and local income taxes

Municipal Bonds (Munis)

Why choose them? Federal tax-exempt income—often also exempt at the state/local level if issued within your state—makes munis attractive to retirees in higher tax brackets.

Yield-to-Worst (Bloomberg Municipal Bond Index, June 25, 2025): 4.00% Charles Schwab
Maturities: Intermediate (~4%) to long-term (~5%) yields, with high-yield munis up to ~5.85%
Accessibility: Purchase through brokerages or municipal bond funds

IRA Certificates of Deposit (CDs)

Why choose them? FDIC-insured, tax-deferred growth inside a retirement account, and fixed rates make IRA CDs a low-risk complement to bonds.

Top IRA CD Rates (July 2025):
- Synchrony Bank: 4.50% APY
- America First Credit Union: 4.35% APY
- Bread Savings: 4.00% APY Bankrate
Terms: Three months to 10 years
Considerations: Early-withdrawal penalties; ladder multiple terms for liquidity

Fixed Annuities

Why choose them? Insurance-backed guarantees and potentially higher rates than bank CDs; tax-deferred growth.

Multi-Year Guaranteed Annuities (MYGAs, July 2025): Rates range from ~5.50% to 7.05% depending on term and provider Annuity.org
Features: Guaranteed fixed rate, tax-deferred; typical terms of 2–10 years
Drawbacks: Limited liquidity, surrender charges, complexity of product terms

Preferred Securities & Senior Loans

Why choose them? For moderate risk takers, these can diversify income sources and potentially boost overall yield.

Preferred Stocks: Yields often in the 5–7% range, but with equity-like risks
Floating-Rate Senior Loans: Income adjusts with rates but carry credit risk
Insight: Preferreds and senior loans have provided higher returns during periods of rising rates Barron’s

Crafting a Fixed Income Portfolio

Assess Income Needs & Risk Tolerance: Determine how much steady income you require and your comfort with price fluctuations.
Diversify Across Products: Blend Treasuries, munis, IRA CDs, annuities, and higher-yield securities to balance safety and yield.
Use Laddering Strategies: Stagger bond maturities and CD terms to manage liquidity and interest-rate risk.
Emphasize Tax Efficiency: Favor munis for tax-exempt income and consider state-specific issues where available.
Consult Professionals: Work with financial and tax advisors to tailor allocations to your unique retirement plan.