What is an Income Ladder?
An income ladder is created by purchasing a series of fixed-rate investments (or fixed-income investments) with staggered maturity dates such that the combination of interest and matured principal provide the desired income. The concept is similar to that of a traditional Bond Ladder except that when investments mature, they are used to provide income rather than to purchase more bonds. When the fixed-rate investments are insured or guaranteed, such as with bank CDs and US Treasuries, an income ladder is one of the best ways to achieve a reliable stream of investment income.
Related Questions
- My wife does not work outside our home and therefore will not have pension income that normally results from employment income. How can we set up a retirement income plan for her?
- When assessing our competitiveness with surrounding districts did the experts include any supplemental income such as Career Ladder, market stipends, etc.?
- What is an Income Ladder?
