Bond Ladder

Investing

A bond ladder is a portfolio of individual bonds (or CDs) with staggered maturity dates — say, equal amounts maturing in 1, 2, 3, 4, and 5 years. As each bond matures, you reinvest the proceeds in a new long-end bond (5-year), maintaining the structure. Ladders combine the higher yields of longer-term bonds with the liquidity of regular maturities. They also smooth out interest rate risk: if rates rise, your near-term maturities reinvest at the higher rates; if rates fall, your long-end bonds already locked in higher yields. Bond ladders are excellent for retirees seeking predictable cash flow.