How to Make Your Money Last in Retirement: The 3-Bucket Strategy
Planning for retirement can feel overwhelming. You’ve worked hard, saved diligently, and now the question is: How do I turn my savings into income that lasts?
One easy-to-understand approach is called the 3-Bucket Strategy. It breaks your retirement savings into three “buckets,” based on when you’ll need the money. This method helps you stay on track, avoid panic during market drops, and sleep a little better at night.
🪣 Bucket 1: Your Short-Term Spending (Years 1–5)
This is your “now” money—cash you’ll use in the first few years of retirement. Since you’ll be withdrawing from this bucket soon, it needs to be safe and easy to access.
What goes here:
High-yield savings accounts
Money market funds
CDs (Certificates of Deposit)
Treasury bills
Short-term bonds
Fixed annuities
The goal? Keep it stable. This bucket helps cover your living expenses without worrying about stock market ups and downs.
🪣 Bucket 2: Mid-Term Income (Years 6–10)
This bucket is your “next” money. You won’t need it right away, so it can aim for a little more growth while still staying fairly conservative.
What goes here:
Bond funds
Dividend-paying stocks
Income-focused mutual funds or ETFs
Municipal bonds
Think of this bucket as your refill tank—it helps replenish Bucket 1 and keeps your retirement income flowing smoothly.
🪣 Bucket 3: Long-Term Growth (Year 10 and Beyond)
This is your “later” money—the money you won’t touch for at least a decade. Because you have time, this bucket can take on more risk for more potential growth.
What goes here:
Stocks (U.S. and international)
Real estate funds (REITs)
Balanced or total return funds
Inflation-protected bonds
Other long-term investments
This bucket helps your money grow and keeps your nest egg strong through the later years of retirement—or even for leaving a legacy.
The Big Picture: Stay Balanced, Stay Calm
The 3-Bucket Strategy helps take the guesswork out of retirement income planning. By dividing your money based on when you’ll need it, you reduce the urge to react emotionally to market swings. And just like rotating your tires or getting a check-up, you’ll want to review and rebalance your buckets regularly.
Whether you're just entering retirement or planning ahead, this approach can give you structure, confidence, and a more peaceful path forward.
Have you completed your Financial Fire Drill?
It’s a great way to check if your retirement plan is truly ready for the unexpected.
Let’s Start the Conversation.
Reach out today and let’s walk through your buckets together—step by step, no pressure.
— Brooks
Advisory services through Discipline Wealth Solutions, Inc.
The Stahlnecker Group and Discipline Wealth Solutions, Inc are separate and independent entities. The articles and opinions expressed in this newsletter were gathered from a variety of sources, but are reviewed by Discipline Wealth Solutions prior to its dissemination. All sources are believed to be reliable but do not constitute specific investment advice.
Investing involves risks. Investments are not guaranteed and may lose value. No representation is being made that any account will or is likely to achieve future profits or losses similar to those shown. You should not assume that investment decisions we make in the future will be profitable or equal the investment performance of the past. Past performance does not indicate future results.
