Bond Ladder Income Planner
Plan a bond ladder strategy by calculating income from bonds maturing in sequence.
Useful for steady income in retirement.
What Is a Bond Ladder?
A bond ladder is a fixed-income strategy where you buy bonds with staggered maturity dates. For example, if you have $100,000 and want a 5-rung ladder, you invest $20,000 each in bonds maturing in years 1, 2, 3, 4, and 5.
Each year, one bond matures and you receive your principal back. You then reinvest that principal into a new bond at the long end of the ladder.
Why Use a Bond Ladder? Reduces interest rate risk: you are never fully locked into one rate environment. Provides predictable cash flow: coupons arrive regularly throughout the year. Great for retirement income: you can match bond maturities to known future expenses.
The Math Investment per rung = total investment / number of rungs Annual coupon per rung = investment per rung × yield Total annual coupon income = annual coupon × number of rungs (while all bonds are held)
When a bond matures, you receive the principal back. If reinvested, the ladder continues at potentially a new yield. If taken as income, the ladder shrinks by one rung each year.
Tax Note Treasury bond interest is exempt from state and local tax but taxable at the federal level. Municipal bond interest may be fully tax-free depending on your state and the bond issuer. Always consult a tax advisor for your specific situation.