The 3 Bucket Retirement Income Strategy

Will I be able to retire ever? Answers to our clients' #1 question!

Among the 30% of our clients who are retired and depending on their portfolio for retirement, no one has ever experienced a reduction in their monthly draw. We accomplish this by investing 60-70% of the client’s portfolio in higher returning but riskier (more volatile) assets such as US & International stocks, and commodities.

 
Three Bucket Retirement Income Strategy
 

We rebalance once or twice a year, flowing excess balances in the risk bucket to the fixed income bucket, which is invested in lower returning but less volatile corporate & municipal bonds, and preferred stock. The excess in the bond bucket flows into the cash bucket, which is invested in low risk, low return assets such as money market securities. Each month, the client receives the exact same draw.

In general, we have a year’s worth of retirement income in the cash bucket, 4 years in the fixed income bucket, which means we can survive a 5 year “drought” in risk assets, which is exactly what happened during the 2007-2010 period of financial turmoil.

Watch a short video on this topic

Download a summary of this strategy