Build a staggered Treasury bond portfolio, see annual cash flows, total interest income, and reinvestment projections.
| Year | Coupon Income | Maturities | Total Cash Flow | After-Tax | Cumulative |
|---|
| Rung | Face Value | Coupon | Maturity | Total Interest | Total Return | YTM (approx) |
|---|
Enter each "rung" of your ladder — the face value, annual coupon rate, and maturity year for each Treasury bond you want to hold. Set your start year, reinvestment rate for when bonds mature, and your marginal tax rate. Hit Calculate to see a full breakdown of annual cash flows, after-tax income, and a rung-by-rung summary.
Add up to 20 rungs to model a complete laddering strategy spanning multiple years. The default setup includes five rungs as a starting example.
A Treasury bond ladder is one of the most reliable income strategies for retirees, conservative investors, and anyone who wants predictable cash flow without market timing risk. Instead of piling everything into one bond or bond fund, you spread maturities across multiple years — say 1, 3, 5, 7, and 10 years — so that each year (or every couple of years) a bond matures and returns your principal.
The real power shows up in rising-rate environments. When a rung matures, you reinvest at whatever the current rate is. If rates rose from 3% to 5%, your newly purchased bond earns more. Contrast that with a bond fund, where rising rates cause NAV losses with no guaranteed maturity date.
A practical example: a retiree invests $250,000 spread evenly across five Treasuries maturing in years 1–5. Each year, $50,000 comes back as principal plus coupon income. In year 1, the proceeds fund living expenses or get reinvested into a new 5-year bond, keeping the ladder rolling indefinitely. With current 5-year Treasury yields near 4.5%, this produces roughly $11,250/year in coupon income alone on a $250,000 portfolio — exempt from state and local taxes.
For each rung, the calculator computes:
Cash flows are aggregated by calendar year. Maturity proceeds appear in the year the bond matures. Cumulative totals compound the after-tax income forward at the reinvestment rate.
A ladder holds individual bonds to maturity, guaranteeing return of principal (barring a U.S. default) and a predictable cash flow schedule. A bond fund has no maturity date — its NAV fluctuates daily with interest rates, and you can lose principal if you sell at the wrong time.
Most financial advisors suggest 5–10 rungs. A 10-year ladder with one bond maturing every year gives maximum diversification across the yield curve. Fewer rungs (3–5) work well if you want simpler management or are matching specific future expenses.
Yes — TreasuryDirect.gov lets individuals buy T-bills, notes, and bonds directly from the U.S. government at auction with no fees. You can also buy Treasuries through any major brokerage in the secondary market, though prices will reflect current market rates.
No. Interest income from U.S. Treasury securities is exempt from all state and local income taxes under federal law. You will still owe federal income tax on coupon payments at your ordinary income rate.