You Are 68 and a $40,000 Expense Lands in Three Years? These 3 ETFs Are Where That Money Should Sit Until Then
A fixed expense with a fixed deadline changes how you protect the money set aside for it, and the wrong fund choice can leave you short when the bill arrives. Three Treasury funds match this specific situation, but only if…
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You are 68, and a $40,000 expense lands in three years. Maybe it’s a roof, a vehicle, or a planned medical procedure. The amount is real, and you already know the date. Preservation is the priority now. Your job is to keep it intact until the bill comes due. Three Treasury funds suit that role, ordered by when you’ll need the money: State Street SPDR Bloomberg 3-12 Month T-Bill ETF (NYSEARCA:BILS), Vanguard Short-Term Treasury ETF (NASDAQ:VGSH) and iShares 0-5 Year TIPS Bond ETF (NYSEARCA:STIP).
Match What You Hold to When You Need It
A long-term investor can wait out a stock market fall. You can’t, because a drop right before a fixed payment date leaves you short when the bill is due. Long-duration bond funds carry their own risk. Over a short window, a jump in interest rates can take more out of the balance than the yield puts back in. Your horizon decides what you hold. Short-term Treasuries remove credit risk and keep rate sensitivity low.
Today’s yields give short Treasuries real income. As of October 14, the 3-month Treasury yielded 4.28%, and the 3-year yielded 4.92%.
Funds Have No Maturity Date, and That Changes the Math
These three are funds, and unlike a bond, a fund never matures. You get whatever the share price is on the day you sell, with no set payment date. That works well for money you want stable and easy to reach. But it is important to note that it works differently from an individual Treasury or a certificate of deposit, which matures on a set date and returns a set amount. If your expense is fixed to the dollar and the day, understand that difference before you choose.
BILS Is the Closest Thing Here to Parked Cash
BILS tracks Treasury obligations with remaining maturities of 3 to 12 months. As of June 30, it held about $3.9 billion in net assets spread across dozens of T-bills, and no single bill made up more than 6.9% of the fund. Bills mature so quickly that a change in rates barely moves the price. The 52-week bill recently averaged a 4.49% yield.
BILS pays monthly. In 2026, payouts have ranged from $0.272237 to $0.314295 per share, so expect the amounts to vary. Its adjusted one-year return is roughly 3.59%.
VGSH Lines Up With a Three-Year Horizon
VGSH holds Treasuries maturing in 1 to 3 years, which lines up closely with your spending date. Its expense ratio is 0.03%, or about $3 a year for every $10,000 invested. The 2-year Treasury recently yielded 4.82%.
Longer maturities make VGSH more sensitive to rates than BILS. So far this year, VGSH has returned 0.88% on an adjusted basis, compared with 2.71% for BILS. Its monthly payouts have run between $0.1678 and $0.2075 per share in recent records.
STIP Covers the Part of the Bill That Might Grow
The price you’re quoted today may be higher by the time you pay it. STIP holds Treasury inflation-protected securities with maturities of less than five years, with about $15.9 billion in net assets as of July 31. The principal on these bonds rises with the Consumer Price Index, so this part of your money moves with prices instead of sitting at a flat dollar value. The 5-year real yield, meaning the return before inflation is added back, was 2.64% on October 14.
Over a short window, that protection has limits. It follows national CPI, which may not match the price of your particular roof or car. The share price still moves when real yields change. Payouts also swing with inflation. They’ve ranged from $0.034483 to $1.135695 per share in recent history. STIP’s adjusted one-year return is about 1.68%.
Trade-Offs to Weigh Before You Move the Money
Each of these funds can lose value. Short-duration funds fluctuate less, but they still fluctuate. VGSH and STIP have trailed BILS recently because rate moves hit longer maturities harder. None of the three promises a set income, and past distributions don’t predict future ones. If you need a guaranteed amount on a guaranteed date, an individual Treasury or a CD that matures before your bill is due fits more exactly.
Still, for a 68-year-old with $40,000 due in three years, these three cover what matters: BILS keeps money stable, VGSH matches the time frame, and STIP guards against rising prices. All three hold only U.S. government debt, can be sold any trading day, and pay monthly.
Contact [email protected] for any questions or corrections.
Ryne Mauck is an investment writer covering exchange-traded funds, retirement planning, and portfolio strategy. Through his work at 24/7 Wall St. and other investment platforms, including Seeking Alpha, he aims to provide clear, research-driven insights that help investors make more informed decisions while maintaining a long-term approach to investing.
Ryne holds a B.Sc. in Finance and an M.A. in Political Science. He is a formerly registered Municipal Advisor Representative and has passed the Series 50, Series 63, and Series 65 exams. His articles are not intended to be, nor should they be interpreted as, financial advice.
