Bond Ladders: Generating reliable income through different life stages

Bond ladders are a great way to build consistent income, diversify and hedge against inflation. With a ladder, investors can create a portfolio of individual bonds with staggered maturities, which can help to reduce the risk of interest rate fluctuations and provide a predictable stream of cash flows. Unlike bond funds, ladders can be customized to meet an investor’s specific needs, so they offer greater transparency and predictability.  

Implementing ladders in practice can be time consuming though. It requires careful planning to ensure that the ladder is built with the right mix of bonds that will provide the optimal mix of yield and diversification of risk.  

Customizing investment strategies pre- & post-retirement 

The use of new technologies can greatly enhance the efficiency of wealth managers and financial advisors in constructing laddered income portfolios. One such technology is bondIT’s portfolio construction tool, Frontier. This advanced platform offers a range of features, that enable advisors to dynamically optimize bond portfolios and deliver customized investment strategies that help clients meet their pre- and post-retirement income needs. 

With Frontier, advisors can build standard or custom ladders using municipal, corporate, or government bonds, with the flexibility to choose any combination of maturity and payment profiles – in a fraction of time it would otherwise take. The platform also incorporates credit quality and liquidity analysis, eliminating the need for advisors to pay mutual fund and ETF fees. 

Technology helps clients achieve their financial goals 

Before retirement, many individuals may have financial liabilities such as saving for a down-payment on a home or vacation property, or paying for their children or grandchildren’s college tuition. 

As they enter retirement financial goals shift from asset accumulation to decumulation, and their focus shifts to efficiently distributing income throughout their retirement years. With Frontier, wealth managers can create optimal income streams to help their clients achieve their pre- and post-retirement income goals and align with their unique spending, gifting and philanthropic requirements. 

Want to learn more about how technology can help deliver customized investment strategies? Reach out to the bondIT team now.