A 72-year-old investor achieves $40,000 yearly income using an eight-rung Treasury ladder, avoiding credit risk and stock volatility.
A Treasury bond ladder structured across eight maturities generates $40,000 annually for a retiree with $850,000 in savings, eliminating credit risk and state income taxes. The strategy relies on U.S. government-backed securities, ensuring principal return at maturity while providing predictable income streams.
Current yields on the May 2026 notes stand at 4.3%, producing $36,400 annually—$3,600 short of the target. Closing the gap requires an additional $85,000 in capital or extending maturities, each introducing trade-offs. Treasury ladders remain a low-volatility alternative to high-yield funds or complex income strategies.
The approach preserves capital while reducing portfolio risk, though shifting yield curves may necessitate adjustments to maintain income levels.