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Bond Ladder

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.

By the TRRP Editorial TeamUpdated 2026SSA · IRS · CMS data

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
The part most people miss

For most retirees, a simple Treasury ladder covering 5–10 years of essential expenses — paired with a globally diversified equity portfolio — is mathematically equivalent to complex bucket strategies and much easier to manage.

When you’re ready

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