For people 55 and over who hold $50,000 or more in bonds or bond funds
Bonds are the “safe” part of your plan. So why did they have their worst year on record in 2022?
When interest rates rise, bond funds lose value. Here is how that works, how big the move can be, and why it matters most when you’re living off the money. Education only, with the numbers sourced.
Dear careful investor,
For most of your working life, you heard the same advice: as you get closer to retirement, hold more bonds. They’re the steady part.
Then came 2022. The broad U.S. bond market, measured by the Bloomberg U.S. Aggregate Bond Index, lost 13.01%. That was its worst calendar year since the index began in 1976.1
On $500,000, that is about $65,000, in the part of your plan that was supposed to be steady. The reason wasn’t a default. Interest rates went up, and when rates go up, the price of bonds people already hold goes down.
The broad U.S. bond market in 2022, its worst year since 1976.1
The 10-year Treasury yield at the close on October 7, 2026, near its highest level since 2002.2
And rates are up again. Nobody knows where they go from here, and this page won’t guess. But you should know what a move in either direction does to your balance.
Almost six years later, still underwater
Say you did everything you were told. At the start of 2021 you put $100,000 into a fund that tracks the broad U.S. bond market. Here’s what that market did since:4
| Year | Return | $100,000 becomes |
|---|---|---|
| 2021 | −1.54% | $98,460 |
| 2022 | −13.01% | $85,650 |
| 2023 | +5.53% | $90,390 |
| 2024 | +1.25% | $91,520 |
| 2025 | +7.30% | $98,200 |
| 2026 to Oct. 6 | −2.70% | $95,550 |
| Since the start of 2021 | about −4.5% | about $95,500 |
Multiply it through: 0.9846 × 0.8699 × 1.0553 × 1.0125 × 1.0730 × 0.9730 ≈ 0.955. Index returns for 2021–2025; the 2026 figure is a large index fund’s year-to-date return. Before fees and before inflation. Past results don’t predict future ones.
The “safe” half of a careful plan, almost six years later, still below where it started. After inflation, further behind.
Why it matters more in retirement
While you’re working, a down year on paper can wait. In retirement, you may be taking money out every month.
If a bond fund is down when you need cash, you sell shares at the lower price. Say you take $2,000 a month and the share price is down 10%. That same $2,000 now takes about 11% more shares ($2,000 ÷ 0.90 ≈ $2,222 at the old price). If the price comes back later, those shares don’t come back with it.
In retirement, a paper loss turns real the day you sell to pay a bill.
None of this means bonds are bad. It means the word “safe” is doing a lot of work, and your income plan should know how much your balance can move.
What a review looks at
There are options most people are never shown. A review looks at your income plan: what you need each month, where it comes from, and how a swing in your savings would affect it.
The specialist you’d talk to is a licensed insurance agent. They don’t give advice about your bonds or bond funds. Questions about specific securities belong with a securities-licensed professional.
Who this is for, and who it isn’t
A good fit if you…
- Are 55 or older, retired or getting close.
- Have $50,000 or more in bonds or bond funds, inside or outside a retirement account.
- Live off your savings now, or will soon, and want an income plan you understand.
Probably not for you if…
- You want advice on which bonds or funds to buy or sell. Ask a securities-licensed professional.
- You won’t touch this money for many years.
- You like to trade on where you think rates are going.
Common questions
Are rates going to keep rising?
Nobody knows, and this page doesn’t try to guess. Rates can rise or fall. The useful question is how much your balance could move either way, and whether your income plan can handle it.
What is duration, and what does it mean for me?
Every bond fund has a number called duration, measured in years. It’s a rule of thumb for how much the fund’s price moves when rates move. A large fund that tracks the whole U.S. investment-grade bond market had a duration of 5.68 years as of October 6, 2026.3 So a 1-point rise in rates moves its price down about 5.7%, and a 1-point fall moves it up about 5.7%. On $250,000 that is about $14,200; on $500,000, about $28,400 (your amount × 5.68 × 1%; a rule of thumb, not a prediction). Funds that hold longer-term bonds move more. To be fair, there’s an offset: when rates are higher, the income tends to rise over time. That same fund’s average yield to maturity was about 5.5%.3
Can’t I just wait for it to mature?
An individual bond held to maturity has an end date. Unless the issuer defaults, you get its face value back. A bond fund never matures. It keeps selling older bonds and buying new ones, so there’s no date when it’s scheduled to hand back what you paid. If you’re taking income, you’re selling along the way.
What kinds of options would we talk about?
Options discussed may include insurance products such as fixed or fixed indexed annuities. Your specialist is a licensed insurance professional and does not give investment advice about your bonds or bond funds.
Will the specialist look at my bonds?
No. The specialist is a licensed insurance agent and doesn’t give advice about bonds, bond funds or other securities. The call is about your retirement income plan.
Is this a sales call?
No. The illustration is free and the 15-minute call is free. You are never required to buy anything.
Who will I talk to?
A licensed insurance agent in your state. The agent is independent, not an employee of this website, and may recommend insurance products if they fit what you tell them.
See how much a 1% rate move could swing your bond funds
Four quick questions. Round numbers only, no account or fund names. Your illustration shows on screen.
How old are you?
Roughly how much of your savings is in bonds or bond funds?
Include retirement accounts. A rough guess is fine.
Is it mostly bond funds, or individual bonds?
What matters most to you about this money?
Would you be open to a quick, no-pressure call with a specialist?
You’ll see your illustration either way.
Where should we send your illustration?
It’s ready now. We’ll also show it on the next screen.
Preview note: consent wording reused from the existing YRSO pages. Pending compliance review.
Sources and notes
- Bloomberg U.S. Aggregate Bond Index, calendar-year 2022 total return −13.01%, worst since the index began in 1976. Reported by CNBC, January 7, 2023, cnbc.com/2023/01/07/2022-was-the-worst-ever-year-for-us-bonds-how-to-position-for-2023.html, and Morningstar, morningstar.com/markets/just-how-bad-was-2022s-stock-bond-market-performance (accessed October 8, 2026). $65,000 on $500,000 is our arithmetic. Past performance does not predict future results.
- U.S. Department of the Treasury, Daily Treasury Par Yield Curve Rates: 10-year, 5.28% on October 7, 2026, home.treasury.gov (daily par yield curve, October 2026), accessed October 8, 2026. Intraday high earlier in October the highest since 2002, per the Financial Times as reported by The Irish Times, October 1, 2026, irishtimes.com/business/2026/10/01/global-bond-sell-off-pushes-10-year-treasury-yield-to-highest-since-2002.
- Issuer data (iShares) for an ETF tracking the U.S. investment-grade bond market, as of October 6, 2026: effective duration 5.68 years, average yield to maturity 5.52%, year-to-date return −2.70%. ishares.com/us/products/239458. Named as a data source only, not a recommendation. Duration is an estimate; actual price changes can differ, especially for large rate moves.
- Bloomberg U.S. Aggregate Bond Index calendar-year total returns: 2021 −1.54%, 2023 +5.53%, 2024 +1.25%, as shown in J.P. Morgan Asset Management, Guide to the Markets, “Bloomberg US Aggregate annual returns,” am.jpmorgan.com (Guide to the Markets), accessed October 8, 2026; 2022 per note 1; 2025 +7.30% per Bloomberg, “Looking back at 2025: Fixed income,” bloomberg.com/professional/insights/markets/looking-back-at-2025-fixed-income, accessed October 8, 2026; 2026 year-to-date −2.70% is the fund in note 3 through October 6, 2026. Compounding and dollar amounts are our arithmetic, rounded, before fees and taxes. Indexes can’t be invested in directly. Past performance does not predict future results.
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This is not a high-pressure sales call. Kyle will look at your income plan: what comes in, what goes out, and how steady it is. He won’t give advice about your bonds or other securities. If your plan already works, that’s what you’ll hear.
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