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1. What a ladder is

Your bonds are spread across 2 to 7 years, like rungs on a ladder. Each year one rung is repaid to you in full. So some of your money comes back to you every single year.

2028 2029 2030 2031 2032 2033

2. Why it helps with cost of living

When a bond is repaid, you buy a new one at today's interest rate. If living costs rise, interest rates usually rise too. So your income catches up over time.

Old bond 3% repaid to you New bond 4% bought at today's rate

3. Why we don't lock in for 20 years

A long bond pays the same coupon for 20 years, even if costs rise. A ladder lets your income step up as each rung is replaced. That is the difference between standing still and keeping pace.

20-year bond: flat Ladder: steps up Years → Income

4. Why we spread across banks and years

No more than two bonds from any one bank. No more than two bonds coming due in any one year. That way no single bank, and no single year, matters too much.

Bank A Bank B Bank C Bank D 2028 2029 2030 2031 2032 2033
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