Build a 3-10 rung bond ladder and see each rung's size, the annual coupon income, and what your maturities are worth when reinvested at the far end.
Enter your numbers and press Calculate to see the full rung-by-rung schedule.
Situation: A saver nearing retirement wants $20,000 maturing each year for five years, holding Treasuries yielding 4.5%.
How it's computed: Each rung is $100,000 ÷ 5 = $20,000. Annual coupon per rung is $20,000 × 4.5% = $900, so the ladder pays $4,500 in year one, growing as maturities are reinvested at 4%.
Rung size $20,000; first-year interest $4,500 ($13,500 total coupons over the ladder life); reinvested ending value near $113,201.
Situation: A retiree builds a 10-year ladder of $25,000 Treasury rungs at 4.2% to fund spending and roll the rest.
How it's computed: Ten rungs of $25,000 each. Every year one rung matures and is reinvested at the far end at 3.8%, keeping the ladder length constant — the classic "rolling ladder" that funds the final years at a known rate.
Rung size $25,000; first-year interest $10,500 ($57,750 total coupons if held to plan); reinvested ending value near $309,874.
Situation: Someone parking money for a house down payment builds a rung maturing each year at 5.0% to match the purchase timeline.
How it's computed: Three rungs of $16,667. A short ladder matches known spending dates, so interest-rate swings matter less because each rung is spent, not reinvested long-term.
Rung size $16,667; first-year interest $2,500 ($5,000 total coupons); reinvested ending value near $54,898.
You divide your money into equal rungs maturing at regular intervals — typically one rung per year. As each rung matures you reinvest it at the far end of the ladder, so you always hold bonds spanning the full term. This smooths the effect of any single interest-rate move.
annual interest per rung = rung size × yield to maturity. Total annual income is the sum across all live rungs.
The ladder’s key benefit is that only the maturing rung is exposed to today’s rate, so you never have to sell a bond early at a loss or commit your whole portfolio at one yield.
Yields move constantly. The figures below are representative of the 2025-2026 range and are refreshed from Treasury auction results — always check the current rate before you buy.
| Maturity | Typical yield 2026 | Use in a ladder |
|---|---|---|
| 1-year T-bill | ~3.8% | Short end / reinvestment rung |
| 2-year note | ~4.0% | Early rungs |
| 5-year note | ~4.2-4.5% | Middle rungs — a common ladder core |
| 10-year note | ~4.4-4.7% | Long end of a 10-rung ladder |
| 30-year bond | ~4.7% | Rarely used in a 5-10 year ladder |
Approximate ranges for illustration. Bonds held to maturity repay face value regardless of interim price swings; selling early can produce a gain or loss.
⚠️ Important: This calculator assumes bonds are held to maturity and coupons are reinvested at the rate you enter. It does not model credit default, taxes, transaction costs or the price change of bonds sold before maturity. Yields shown are averages — actual results depend on the specific bonds you buy.
Ladders suit investors who need predictable cash flow at known dates — funding retirement withdrawals, a series of tuition payments, or a home purchase — and who value certainty of principal over chasing the highest yield. They are less useful for money you will not touch for 20+ years, where a diversified equity index fund has historically done better.
In a taxable account, laddering Treasuries also lets you match maturities to your spending needs while keeping interest free of state income tax, which can add a meaningful after-tax edge over a comparable corporate ladder.
The main risk in a ladder is reinvestment risk: when a rung matures, you must buy the new long rung at whatever rate prevails, which may be lower than the rate you just gave up. Shorter, more frequent rungs increase this risk; longer rungs reduce it but lock up capital for longer. This calculator lets you stress-test by lowering the reinvestment rate.