May 24, 2022
The retirement bucket strategy is an investment approach that segregates your sources of income into three buckets.
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The idea behind this strategy is that you’ll have access to cash in the short term, so you won’t have to worry about the fluctuations in the stock market. The buckets are refilled by interest income, dividends and the performance of your investments.
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Here is a look at 5 things to know about the bucket strategy in retirement planning.
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It is an investment approach that bifurcates your retirement corpus into three buckets.
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These buckets are based on the time horizon for when the money will be required—immediate, medium-term and long-term.
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Immediate bucket holds money in liquid assets, medium-term bucket in income assets, and long-term bucket monies in growth assets.
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This strategy should be topped up with asset allocation and rebalancing strategies for optimisation.
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It helps with stand market fluctuations while managing withdrawals.
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