Bucket Strategy

Retirement

The bucket strategy is a retirement withdrawal approach that segregates assets by time horizon into 'buckets': Bucket 1 (1-3 years) holds cash and short-term bonds for immediate spending; Bucket 2 (4-10 years) holds intermediate bonds; Bucket 3 (10+ years) holds equities for growth. Refill earlier buckets from later ones based on market conditions — avoid selling stocks during bear markets. Psychologically, knowing immediate expenses are covered in cash reduces panic during downturns. The strategy works best with disciplined rebalancing and clear rules for when to refill versus let buckets deplete. Hybrid approaches blend bucket and total-return strategies.