Reinvestment of Interest Income

Whenever possible—and especially if you have many years before retirement—you should reinvest your bond interest (coupons). If you buy individual bonds, this takes discipline because you need to put each coupon payment you receive to work earning interest rather than spend it. Consider putting them in a brokerage money market account, or even opening a standard savings account just for your coupon payments. At the end of each year you can put them into the next bond in your laddering strategy.