A retiree with $850,000 seeking about $40,000 annually in reliable income can use a ladder of U.S. Treasury notes with staggered maturities to generate steady income while preserving principal. Treasuries are safe, backed by the U.S. government, and exempt from state income taxes, though current yields average around 4.3%, producing about $36,400 annually—slightly below the target. To reach $40,000, retirees can add more capital or extend maturities, but longer terms increase reinvestment risk. Treasury ladders reduce portfolio volatility and can include inflation-protected securities (TIPS) for inflation safety. Investors should consider after-tax needs and can buy Treasuries directly or through brokers with no commissions.
