A 4.26% I Bond and Realty Income Solve Different Retirement Problems

A 4.26% Series I savings bond and a Realty Income share yielding about 5.56% may sit next to each other on an income screen, but they solve different problems.

The Treasury rate applies to I Bonds issued from May through October 2026. It combines a 0.90% fixed rate, which stays with the bond, and an inflation component that resets every six months. The bond cannot be redeemed for 12 months, and cashing it before five years costs the previous three months of interest. Purchases also face annual limits.

Realty Income pays monthly dividends and can be sold during market hours. Second-quarter AFFO was $1.09 a share, while dividends paid were $0.812, a 74.5% payout ratio. Occupancy was 98.8%, and management raised 2026 AFFO guidance to $4.44 to $4.45. Those metrics support the payout, but the share price can fall and the dividend is not guaranteed.

The I Bond protects principal from market loss when held under Treasury rules; Realty Income does not. Realty Income instead offers the possibility of dividend growth and capital appreciation, along with tenant, real-estate and financing risk. Rising interest rates can also raise the REIT's cost of capital.

Retirees may use the two instruments together rather than force a winner. I Bonds fit money that can remain locked for at least a year and is meant to preserve purchasing power. Realty Income fits capital that can tolerate equity volatility in pursuit of higher current income and growth. The correct comparison is therefore safety and liquidity first, yield second.