2027 RungVBCA33.34% of Bucket 2
Vanguard Target Maturity 2027 Corporate Bond ETF
in this rung
A three-year bond ladder example for 2027
A bond ladder divides near-term spending reserves across bonds or defined-maturity bond funds that mature in different years. Each maturity creates a decision point: spend the cash, extend the ladder, or do some of each.
Starting a ladder in 2027
For this three-year illustration, Bucket 2 equals monthly expenses × 12 months × 3 years, divided equally among three defined-maturity corporate-bond ETFs.
2028 RungVBCB33.33% of Bucket 2
Vanguard Target Maturity 2028 Corporate Bond ETF
in this rung
2029 RungVBCC33.33% of Bucket 2
Vanguard Target Maturity 2029 Corporate Bond ETF
in this rung
When the first rung matures
At the end of 2027, VBCA is designed to mature and distribute its remaining net assets, returning roughly one-third of the original ladder as cash. You can use that cash for 2028 living expenses, buy VBCD shares to create a new 2030 rung, or split the proceeds between spending and extending the ladder.
That annual choice is the useful part of the system. In a market downturn, more of the maturing rung can support spending so equities have additional time to recover. In stronger markets, more can be rolled forward to keep three future years funded.
What this example leaves out
This is an educational illustration, not a recommendation to buy these funds. Defined-maturity corporate-bond ETFs still carry credit, default, interest-rate, liquidity, and market-price risk. Fund terms and availability can change, and the final distribution is not guaranteed to equal the amount invested. Check current fund documents, taxes, account type, and your actual spending needs before building a ladder.
Ticker and maturity-year pairings verified against the official Vanguard BondBuilder tool on 2026-09-12.