Bond Ladder

Definition

A bond ladder is a portfolio of bonds with staggered maturity dates. Each year, one bond matures — providing predictable cash flow and automatic reinvestment at current rates.

Why it matters in retirement

Bond ladders solve a specific retirement problem: matching cash flows to expenses without taking interest-rate risk. A 10-year ladder covering years 1–10 of retirement spending means you never have to sell bonds at bad prices.

Key Numbers: 2026

Typical ladder length: 5–10 rungs
10-yr ladder avg yield: ~4.2%
Duration of 10-rung ladder: ~5 yrs
Min practical capital: $100K+

Pros

Predictable cash flow
Eliminates reinvestment risk
No manager fees
Interest-rate neutral over time

Cons

Capital-intensive
Requires active management
Less diversification than bond funds
Credit risk if corporate bonds used

Common mistakes

Using corporate bonds without understanding credit risk
Building a ladder in a taxable account with corporates (prefer Treasuries)
Not laddering across multiple issuers
Ignoring call features on callable bonds

Bonds

A bond is a loan you make to a government or corporation. In exchange, the issuer pays you periodic interest (coupon) and returns your princ…

Treasury Bonds

Treasury securities are debt obligations of the US federal government. T-bills mature in 1 year or less, T-notes in 2–10 years, T-bonds in 2…

CD Ladder

A CD ladder splits your cash across multiple certificates of deposit with staggered maturities (e.g., 1, 2, 3, 4, 5 years). As each CD matur…

Withdrawal Strategies

A withdrawal strategy defines how much you pull from your portfolio each year in retirement and how you adjust for market performance, infla…

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