What $1 million in Treasuries actually pays you, after inflation.

A 30-year Treasury yielding more than 5.6% sounds like an easy answer: $1 million, about $56,000 a year, backed by the U.S. government. The arithmetic is right. The problem is the currency. Nobody spends 2056 dollars; you spend today's. Here's what the same payments are worth once you account for 30 years of rising prices, and which inflation assumption is reasonable to use.

What do 30-year Treasuries actually pay right now?

Treasury's daily par yield curve put the 30-year yield at 5.63% on October 2, 2026. Using the St. Louis Fed's 30-year constant-maturity series, the September 30 close of 5.64% was the highest since July 2002. At 5.63%, $1 million earns $56,300 a year.

Per TreasuryDirect, Treasury bonds pay interest every six months (this post simplifies to one payment a year), return face value at maturity, and are subject to federal income tax but no state or local tax.

What is each year's check worth after inflation?

A check that arrives at the end of year n buys what $56,300 ÷ (1 + inflation)ⁿ buys today. At 2.5% a year:

• Year 1: $56,300 buys what $54,927 buys today.
• Year 15: it buys what $38,873 buys today.
• Year 30: it buys what $26,841 buys today — less than half.

At 3% inflation, the year-30 check is worth $23,195 in today's dollars. The real return you earn each year is roughly the interest rate minus inflation: the exact figure is (1.0563 ÷ 1.025) − 1 = 3.05% at 2.5% inflation, not 5.63%.

What do 30 years of payments add up to in today's dollars?

Add up all 30 deflated payments, then add the deflated $1 million that comes back at the end. The nominal total is $2,689,000 ($1,689,000 of interest plus $1,000,000 of principal). Here's what survives in today's dollars under five inflation assumptions:

Two things are easy to miss. First, at 2.5%, the interest alone loses about $511,000 of buying power ($1,689,000 − $1,178,375), but the principal loses more: the $1 million you get back in 2056 buys what $477,000 buys today, a $523,000 loss. A lot of people count the interest and forget the principal. Second, the whole range comes from one assumption you can't know in advance: the inflation rate. Quoting only the nominal yield hides that.

Which inflation rate should you assume?

There are three reference points, and they don't agree. The Fed aims for 2% inflation over the longer run. The Bureau of Labor Statistics reported that consumer prices rose 3.4% over the 12 months ending August 2026 (2.4% excluding food and energy). And the bond market's own estimate is in Treasury's real yield curve: the 30-year inflation-protected (TIPS) yield was 3.34% on October 2, versus 5.63% for the regular 30-year. The gap implies the market expects inflation to average about 2.2% a year over 30 years ((1.0563 ÷ 1.0334) − 1).

That implied rate is the break-even: if inflation averages above it, TIPS (which adjust principal for the Consumer Price Index, per TreasuryDirect) come out ahead of regular Treasuries; below it, the regular bond wins. Nobody knows which side of 2.2% the next 30 years will land on, which is why planning in today's dollars and testing a range matters more than picking a number. The Runway engine does the same thing: it works in inflation-adjusted dollars and converts nominal returns to real ones with the same formula used above.

How were these numbers calculated?

• Yield: 5.63% for the 30-year, Treasury par yield curve, October 2, 2026. The "highest since July 2002" comparison uses FRED's daily 30-year constant-maturity series. Yields change every day.
• Real yield and break-even inflation: Treasury's par real yield curve, 3.34% for the 30-year on October 2, 2026; break-even = (1.0563 ÷ 1.0334) − 1 = 2.22%.
• Inflation reference points: BLS CPI release for August 2026; Federal Reserve FAQ on the 2% goal.
• The table: computed with Runway's engine, using its nominal-to-real conversion, (1 + nominal) ÷ (1 + inflation) − 1. Each year's payment, and the principal at year 30, is divided by (1 + inflation)^years. A cross-check using the annuity formula gives the same $1,178,375 at 2.5%.
• What it leaves out: federal tax on the interest, any return you earn by reinvesting each payment, and the fact that real inflation moves around rather than holding steady. This is an illustration of the mechanics, not a forecast or a recommendation to buy any security.