The Bucket Plan: Organizing Your Assets for Retirement Phases

The Bucket Plan is a smart way to manage your retirement savings by splitting them into three separate "buckets," each designed for a different purpose and timeframe. This strategy helps reduce risks, keeps cash handy when you need it, and ensures you have a steady income throughout your retirement. The three buckets are called the Now Bucket, the Soon Bucket, and the Later Bucket.

The Now Bucket

The Now Bucket is designed to cover your immediate and short-term expenses, typically within the first one to three years of retirement. This bucket includes cash, private pensions, savings accounts, and other liquid assets. The primary goal is to ensure you have enough readily accessible funds to cover living expenses, emergencies, and any other unexpected costs without having to sell investments at an inopportune time.

Key characteristics of the Now Bucket include:

• Liquidity: Assets that can be quickly and easily converted to cash.
• Stability: Minimal risk to preserve your capital.
• Accessibility: Funds available without penalties or significant waiting periods.

The Soon Bucket

The Soon Bucket is intended for the mid-term phase of retirement, covering a period of approximately three to ten years. This bucket aims to strike a balance between growth and income, which means ensuring your assets continue to grow while also generating income to support your lifestyle.

Investments in the Soon Bucket might include:

• Dividend-Paying Stocks: Providing potential for growth and income.
• Bonds: Offering a predictable income stream with relatively low risk.
• ETF’s and Mutual Funds: Combining stocks and bonds for a diversified approach.

The Soon Bucket is crucial because it helps you bridge the gap between your immediate needs (the Now Bucket) and your long-term goals (the Later Bucket). It helps keep your income steady while also giving you a chance for some growth along the way.

The Later Bucket

The Later Bucket focuses on long-term growth and is designed to support your needs beyond ten years into retirement. This bucket primarily contains investments that will grow, such as stocks and real estate, with the goal of outpacing inflation to make sure your assets last throughout your retirement years.

Characteristics of the Later Bucket include:

• Growth Potential: Investments with higher risk and higher potential returns.
• Long-Term Focus: Assets that may experience short-term volatility but are expected to appreciate over time.
• Inflation Protection: Investments that help preserve purchasing power.

Implementing Your Bucket Plan with RetireWise

At RetireWise, we specialize in helping clients develop and implement personalized retirement plans that align with their unique goals and circumstances. Our team of experienced financial advisors can guide you through the process of setting up your Bucket Plan and help ensure your assets are strategically allocated to provide financial security and peace of mind.

Whether you are just starting to plan for retirement or are already retired and looking to optimize your asset management strategy, RetireWise is here to help. Contact us today to learn more about how the Bucket Plan can benefit you and start organizing your assets for a successful retirement journey.