She was invested directly in government bonds before, so it would be prudent to stay invested in government bonds after. There is probably no need to buy a bond mutual fund with its fluctuations in share price. One might as well buy bonds directly from the US Government. Maybe she already has an account at www.treasurydirect.gov ? And no need for FDIC insurance either. And contrary to popular belief, the 30-year bond is yielding about 4.3% nowadays which is in the 4% to 5% range you mentioned. Of course, bonds with such a duration will fluctuate in value and if interest rates rise (it's a given) they will lose value if you have to sell them early. But one can fool themselves if they don't hold a mutual fund and buy the bond directly, then forget about them.
I would suggest individual TIPS bonds and not a mutual fund of TIPS. Zvi Bodie has a book which might be useful reading on this subject.
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