5 for 5-year ladder, 7 for 7-year, 10 for 10-year. More = smoother yield averaging but more admin.

Yes - rolling 4/13/52-week T-bill ladders work for short-end cash. Common in corporate treasury.

Defined-maturity Treasury ETFs (Invesco BSCO/BSCP) give laddered exposure in one fund per year, with small expense ratios.

Weight toward long end?

Depends on view. Equal-weight default. Long-end maximizes yield in normal curves; short-end captures rising rates.

Stay disciplined. Whole point is dollar-cost-averaging across the cycle. Don't pause.

Yield curve inversion?

Ladder still works - just less yield locked on long-end rungs. Many investors shorten in inversions.

Add money to existing ladder?

Yes - proportional rungs or weight toward most-wanted maturity.

Compare to CD ladder?

Same mechanics. CDs higher headline but lose to Treasuries after state tax in high-tax states. MYGA ladders beat both at 3-10 yr.

Treasury Strategy Author: Hans Goldstein, NPN 20602398 Last updated: 2026-06-27

Treasury Bond Ladder Strategy (2026) - Construction, Variations, MYGA Compare

TL;DR: A Treasury ladder spreads purchase dates and maturities across a fixed range (typically 1-5 years for short ladders, 1-10 years for long). Each maturity returns par on a scheduled date; you reinvest into the longest rung. Identical mechanics to a CD ladder, with three advantages: state-tax exemption, no FDIC cap, and secondary-market salability. For $250K-$1M of taxable cash, a 5-year Treasury ladder yielding ~4.10% blended often beats short CDs after tax. For known 3-10 year retirement income needs, MYGA ladders pay 100+ basis points more.

Why ladder Treasuries

A ladder solves the rate-timing problem. Buy a single 5-year Treasury at 4.10% and you've locked that yield for 5 years - good if rates fall, bad if they rise. Buy a strip of 1, 2, 3, 4, and 5-year Treasuries and you've effectively dollar-cost-averaged into the yield curve. As each rung matures, you reinvest at then-current 5-year rates. Over a full rate cycle, ladders deliver close-to-average yields with significantly lower regret risk than concentrated single-maturity bets.

Standard 5-year ladder structure

$250K capital, equal 5 rungs:

Rung	Maturity	Yield (2026)	Allocation
1	1-year T-bill (52-week)	4.05%	$50,000
2	2-year T-note	3.95%	$50,000
3	3-year T-note	4.00%	$50,000
4	5-year T-note	4.10%	$50,000
5	5-year T-note (purchased annually as rungs mature)	4.10% initial; resets each year	$50,000

Blended initial yield: approximately 4.04%. Each year, the maturing rung gets reinvested into a fresh 5-year, so the ladder rolls forward perpetually.

The state-tax exemption advantage

This is where Treasury ladders specifically beat CD ladders. The 4.04% Treasury ladder yield is state-tax exempt. The equivalent 4.50-5.00% CD ladder yield is fully state-taxable.

For a California top-bracket resident (10.3% state):

CD ladder at 4.75% blended: after federal+state tax (47.3% combined), effective yield 2.50%
Treasury ladder at 4.04% blended: after federal-only tax (37%), effective yield 2.55%

The 70-bp headline gap closes. The Treasury ladder also adds: no FDIC cap, sellable on any business day, no penalty for early sale (just mark-to-market exposure).

Step-by-step ladder construction

Decide capital and horizon. Standard: $100K-$1M, 5-year ladder. Larger or longer horizons can use 7 or 10-rung ladders.
Divide capital equally. $250K / 5 rungs = $50K per rung. (Larger rungs at the long end are sometimes preferred for yield, but equal rungs are simpler.)
Pick a brokerage. Fidelity, Schwab, Vanguard, or TreasuryDirect. Brokerages offer better laddering tools.
Buy at upcoming auctions. Submit non-competitive bids in the days before each scheduled Treasury auction. T-bills auction weekly; T-notes monthly to quarterly depending on maturity.
Reinvest at maturity. Each rung's principal returns to your brokerage on the scheduled date. Reinvest into a new long-end rung (5-year if running a 5-year ladder).
Adjust for liquidity needs. If you might need cash, weight more toward the short end. If you want yield max, weight toward the long end.

Variations

Barbell (short + long, no middle)

Concentrate in 1-year T-bills and 10-year T-notes, skip the middle. Captures the highest short-end yields plus long-end yield premium. Works when the curve is humped (middle yields lower than ends).

Bullet (single concentrated maturity)

All capital in one maturity matching a known cash need (e.g., $500K in 5-year T-notes for an exact-date college expense). Eliminates reinvestment risk for that specific date.

Rolling 4-week or 13-week ladder

Pure short-end ladder for emergency cash or business reserves. Buy 4 weeks of 4-week bills (one maturing per week), or 13 weeks of 13-week bills. Each week one matures and gets reinvested. Effectively a self-rolling cash management facility.

10-year ladder for longer horizons

Five rungs at 1, 3, 5, 7, 10 years, then reinvest each maturity at the long end. Average duration ~5 years. Higher yield (~4.15% blended in 2026) but more interest-rate volatility on the secondary market.

Treasury ladder vs MYGA ladder

The same principle applies to MYGAs. A 3-5-7 year MYGA ladder yields ~5.40% blended, locked, with full federal AND state tax deferral. Compared to a 5-year Treasury ladder at 4.04% blended:

Yield premium: ~135 bps annually
Tax treatment: Full deferral (MYGA) vs annual 1099-INT (Treasury)
Trade-off: MYGA surrender charges if you exit early (beyond 10%/yr free withdrawal); Treasury secondary market is more liquid

For 3-10 year retirement money you can confidently leave, MYGA ladders deliver materially better economics. For cash you might need within 12 months, Treasury ladders win on flexibility.

Worked example - California top bracket, $250K, 5-year horizon

Treasury 5-year ladder at 4.04% blended

Annual pre-tax income: $10,100
Federal tax (37%): $3,737
State tax (CA 10.3%): $0 (exempt)
After-tax annual: $6,363
5-year after-tax total: ~$31,815

5-year MYGA ladder (3-5-7yr blend at 5.40% blended)

Annual interest accrues inside contracts; no annual tax
5-year ending value (5.40% compounded): ~$325,500
5-year gross gain: $75,500
Federal tax (37%) + CA state (10.3%) at withdrawal: ~$35,711
After-tax 5-year gain: ~$39,789

MYGA ladder wins by ~$8,000 - meaningful at $250K over 5 years, and the gap widens at longer horizons.

Common ladder mistakes

Not reinvesting at maturity. The ladder breaks if you let the maturity sit in cash. Set calendar reminders or use auto-reinvest.
Concentrating in one maturity. A single 5-year bet is not a ladder - it's a concentrated rate call.
Ignoring the state-tax math. CD ladders look better on headline yield but lose to Treasury ladders after state tax for residents of high-tax states.
Treating the ladder as illiquid. Treasury rungs are sellable any business day on the secondary market. The ladder structure doesn't lock you in.
Not considering MYGAs for the long-end rungs. Replacing 5-year and 7-year Treasury rungs with MYGAs captures 130+ bps of additional locked yield.

FAQ

How many rungs should my ladder have?

5 is standard for a 5-year ladder. 7 rungs for a 7-year ladder. 10 rungs for a 10-year ladder. More rungs = smoother yield averaging but more administrative complexity. Fewer than 5 rungs is barely diversified.

Can I ladder T-bills only?

Yes - a rolling 4-week, 13-week, or 52-week T-bill ladder works for short-end cash. Many corporate treasurers use rolling 13-week ladders as their primary cash management.

What about Treasury ETF ladders (BulletShares)?

Defined-maturity Treasury ETFs (Invesco BulletShares Treasury ETFs - BSCO, BSCP, etc.) give you laddered exposure in one fund per maturity year. Lower minimums than building manually, with small expense ratios.

Should I weight toward the long end?

Depends on your view. Equal-weight is the default. Long-end weight maximizes yield in normal upward-sloping curves; short-end weight maximizes liquidity and captures rising-rate environments. Currently the curve is relatively flat, so equal-weight is fine.

How do I handle rate moves?

Stay disciplined. The ladder's whole point is to dollar-cost-average yield exposure across the cycle. Don't 'pause' the ladder because rates seem high or low - just keep reinvesting at the long end as rungs mature.

What if the yield curve inverts?

Short-end yields above long-end yields. Currently (2026) the curve is slightly inverted at the 1-5 year segment. The ladder still works - you're just locking less yield on long-end rungs. Many investors shorten the ladder in inverted-curve environments.

Can I add new money to an existing ladder?

Yes. Just buy proportional amounts into each rung, or weight the new money into the rung you most want to bulk up. Easier to manage with brokerage tools than TreasuryDirect.

How does this compare to a CD ladder?

Same mechanics. CDs have higher headline yield but lose to Treasuries after state tax in CA/NY/NJ/OR. Treasuries have no FDIC cap. For 3-10 year retirement money, MYGA ladders beat both.

Treasury ladder is fine. MYGA ladder is usually better for 3-10 year money.

Hans Goldstein, independent licensed insurance producer.

If you're laddering Treasuries for taxable retirement cash, you're doing better than concentrated bets. For the portion of your ladder that's 3+ years out, MYGAs from A-rated carriers pay 100-140 basis points more locked, with full tax deferral. Worth seeing the hybrid math at your numbers.

Drop your info and within 24 hours you'll get a written side-by-side: the Treasury option vs. the top 3 MYGAs from A-rated carriers at the same term, end-of-term math at your actual dollar amount, and after-tax yield computed at your state bracket. No pitch, no follow-up calls unless you ask.

Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers

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Disclosure

This review reflects publicly available Treasury auction results, TreasuryDirect documentation, and approximate market yields as of the date stated above. Treasury yields change daily; current yields differ from prior auctions and may differ from those shown here. This article is general information for educational purposes; it is not a personalized recommendation, solicitation, or offer of any specific security or insurance product. U.S. Treasury securities are backed by the full faith and credit of the United States Government. MYGA references compare Treasury yields against approximate rates from A-rated insurance carriers as of the date stated; carrier rates change monthly. State guaranty fund coverage on annuities is provided by the state insurance department and varies by state (typically $250,000-$300,000 per owner per carrier). Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated annuity carriers; he is NOT a registered investment advisor, broker-dealer, or registered representative, and is not paid by the U.S. Treasury, TreasuryDirect, or any brokerage for this review. No compensation has been received from any third party in connection with this content. Always read the actual offering documents and consult a licensed advisor before purchasing any security or annuity. Tax discussion of 31 U.S.C. §3124 and Internal Revenue Code provisions reflects law as of 2026 and is subject to change.