Bucket Strategy

What it does

Allocates your retirement portfolio across three buckets matched to time horizon: cash (years 1–2), bonds (years 3–7), stocks (year 8+). Runs a 30-year simulation with annual refills, showing how the buckets evolve under your assumptions and stress-testing against a market crash early in retirement.

Who this helps

Anyone within 5 years of retirement or already retired. The bucket strategy is one of the better-understood ways to handle sequence-of-returns risk — the danger that a bad market in your first 5 years of retirement permanently impairs the portfolio even if average returns are fine.

How to use it

1. Enter your portfolio total and annual spending need (net of Social Security / pension).
2. Choose bucket sizes (defaults: 2 yrs cash, 5 yrs bonds, rest in stocks).
3. Adjust expected returns per bucket — defaults are conservative real returns.
4. Read the year-by-year table and the crash-scenario stress test.

What it doesn't do

Doesn't replace Monte Carlo simulation (single deterministic path with average returns + one crash scenario). Doesn't model taxes — assumes withdrawals come from a generic portfolio. Doesn't account for healthcare cost spikes, LTC, or major one-off expenses. Pair with our How Long Will Money Last and Sequence-of-Returns tools for a fuller picture.