Retirement: How to Build Your Retirement Buckets the Right Way (Start 5 Years Early)
More for the "not retired yet" group.
Buckets. Buckets. Buckets. To be completely honest, I'm not doing buckets in retirement. Why? Because you need to plan ahead to use the bucket strategy, and I didn't plan ahead as well as I should have. I know some people who use the bucket strategy. There are lots of videos on the subject.
Why use the bucket strategy? It's designed to help protect your nest egg when the stock market is down. Maybe way down. Maybe a recession. Retirement means less stress, but you're going to worry about how a down economy could affect the value of your nest egg. Here's a story about my parents.
Years after my father died in 2008, I started piecing together what happened to his retirement nest egg. He and I had never sat down and talked about his finances. Sometimes he would say things that told part of the story. He retired in 1990. He lost a lot of his nest egg in 2001/2002 during the dot-com bubble. He moved what was left into a conservative IRA jumbo CD, where it's sat ever since. He had too many eggs in one basket. He had no plan for a down market. He moved out of the market, and missed considerable growth. I didn't dig into my mother's finances until well after my father died. By then it was too late to make any big moves with the nest egg she had left. She's 90, so I guess we call it a successful retirement plan, but I worry about a future nursing home situation and whether there will be enough money left.
I think the bucket strategy is a good strategy. It may not be the most high performing money strategy, but it will certainly allow you to sleep better and enjoy retirement more. You've got to start early.
"The biggest risk to your retirement, right now, isn't the market, it's waiting too long to begin putting your plan together."
This is not one of Joe's most polished videos, but the information is there.