Why is Laddering a Smart Strategy for Your Finances?

Matthew Allgood, MBA, CRPC®, CFP®, CKA® |

1-Minute Video:

Here’s how laddering works. This strategy is based on the investment principle that the longer you commit your money, the higher your rate of return will be. For instance, A 5 year CD pays more than a 1 year CD. A ten year surrender annuity pays more than a five year. But you don’t want to tie up all your money for a long period in case you need that money.

Or maybe interest rates rise and you could get a better return elsewhere. Laddering is a strategy where you split your money between, for instance, 5 and 10 year surrender period annuities. This allows you to earn the higher rate for longer periods with the 10 year annuity, but still get the benefit of liquidity beginning in year 5.

This money could be used as income or reinvested again at a higher rate. The ladder concept has been used for years with CDs and bonds. And now it also works well with annuities.

These are complex issues and terms change regularly. Give us a call to find out how this laddering strategy could work for you.


Matthew Allgood
(331) 229-3224
Allgood Financial 
Naperville IL
Financial and Retirement Planning, RIA in Illinois 
Registered Investment Advisor