Ah, the Bucket Plan. No, we're not talking about that list of must-dos before you die, or that Rob Reiner movie with Jack Nicholson and Morgan Freeman. But a Bucket Plan may be exactly what you need to get all those great things on your wish list accomplished... things like having a secure retirement, peace of mind, or just knowing that you'll be able to live in retirement on your terms.
The "bucket approach," as Morningstar calls it, to retirement-portfolio management, pioneered by financial-planning guru Harold Evensky, aims to meet your income needs during retirement, effectively helping retirees create a paycheck from their investment assets.
In a Retirement Daily Guest Contributor column this week, Christian Cordoba, president and founder of California Retirement Advisors, explains the bucket plan and how to build and use it.
Constructed carefully, a bucket plan can help reduce sequence-of-returns risk, such as when retirees encounter a bear market at the beginning of retirement, Cordoba writes. "A bucket plan may help you keep from spending too much, depleting your assets, or spending too little, depriving you of a rewarding retirement. In addition, bucket plans can help you execute a tax-efficient portfolio draw-down strategy, in which you decide what, where and when assets are tapped for retirement income."
More from Retirement Daily this week:
Monday, April 16
Adviser Kevin Shuller explains how to understand what diversification is, why it's important and how to use it to protect your retirement savings.
Readers want to know more about how widowhood and divorce affect Social Security benefits.
Here are some new investments and related products that those saving for or living in retirement might consider for their portfolios.
Worried about an inverted yield curve? Diversify your income sources and understand your risks.
Tuesday, April 17
Are we spending too little in retirement? Here are some of the latest reports, surveys, studies and white papers related to retirement. Let us do the research for you.
There is a "still-working"' exception to required minimum distribution (RMD) rules, but it depends on whether the employer's plan offers that option.
Wednesday, April 18
Your adviser may know many facts about you, but what do you need to know about your adviser?
If you don't have a pension, consider what's best for you: QLACs, and SPIAs, and managed payout mutual funds. Oh, my.
Thursday, April 19
Adviser Marcia Mantell writes that at the end of 2018, due to the new tax law, most people should find that they have more spending or saving money to work with.
Investors need to balance their need for yield with the threat of continued rising rates and the sensitivity their assets might have to them.
A reader's looking for the optimal Social Security claiming strategy for his father.