The “Now” bucket is designed to be your safe and secure money and to be used to cover living expenses in the first year or two of your retirement, as well as provide liquidity for larger planned expenses, such as a new car or home repairs. It’s also an emergency fund in case unexpected expenses arise.
The “Soon” Bucket is the preservation bucket. Because this money may be needed sooner rather than later, it is invested for growth—but conservatively. This may provide income in the first phase of retirement and act as an inflation hedge to help combat the rising cost of living. By investing conservatively, you may avoid the risk of being forced to sell during a large downward swing, ultimately liquidating a bigger piece of your overall portfolio for the same income amount. The “Soon” Bucket is created to help reduce your exposure to extreme market fluctuations, ultimately eliminating sequence of returns risk. Plans for the first 10 years of your income needs.
The “Later” Bucket is designed for long-term growth and legacy planning. Having bought a time horizon with the first two buckets, you can choose to invest in vehicles with a longer time commitment and greater growth potential with more confidence. In retirement, this bucket can play a critical role in legacy planning too, particularly to provide income for a surviving spouse. The later bucket tries to ensure you will not run out of money.
Learn how to enjoy your retirement while focusing on the good life: spending time with your family and friends; doing the things you love while worrying less about taxes, market risk, interest rate risk and sequence of returns risk…running out of money risk!
Understand how each of these risks could derail your retirement. Let us help you be strategic with your money and think in terms of money that you will need now, soon and later. Education is key. Learn how our holistic approach to planning can help you.
If you are already retired or getting ready to retire you may wonder:
3 phases to your financial life:
Accumulation, preservation and distribution
Money invested for NOW, SOON & LATER
How much do we need to save to live comfortably in retirement?
Where do I put my money so it lasts as long as we are living?
If something happens to me, will my plan continue to work for my family?
A New Way to Look at Your Bucket List
Leaving Your Lasting Legacy
Questions to Consider When Buying a Vacation Home