The 3-Bucket Strategy: A Smarter Way to Plan for Your Retirement
At Longevity Wealth Strategies, retirement planning isn’t just about reaching a certain age, it’s about creating financial confidence that lasts the rest of your life.
We call this your Wealthspan, the years you get to live the life you’ve worked hard for, on your terms.
One of the most effective tools we use to help clients manage their retirement income is the 3-Bucket Strategy. This straightforward, time-tested approach organizes your money by purpose and timeline, so you always know where your income will come from no matter what the markets are doing.
What Is the 3-Bucket Strategy?
The 3-Bucket Strategy divides your portfolio into three purpose-driven buckets:
Bucket 1: Stability (0–3 Years)
Purpose: Provide accessible, low-risk income for short-term living expenses
What’s inside: Cash, money market funds, CDs, and other principal-protected investments
Why it matters: Keeps your income predictable and shields you from “sequence-of-returns risk” the danger of selling investments during a market downturn
Bucket 2: Steady Growth (3–10 Years)
Purpose: Keep pace with inflation and fund your lifestyle beyond the short term
What’s inside: Balanced investments such as bonds, bond funds, and dividend-paying stocks
Why it matters: Acts as a replenishing source for Bucket 1 while helping maintain your purchasing power
Bucket 3: Longevity Growth (10+ Years)
Purpose: Support your long-term security and leave a legacy
What’s inside: Growth-oriented investments like diversified stock portfolios and equity funds
Why it matters: Aims to stay ahead of inflation, cover long-term expenses like healthcare, and extend your financial independence throughout your lifetime
Why the 3-Bucket Strategy Works
The power of this strategy lies in both structure and discipline:
1. Regular Rebalancing
We maintain your buckets through a disciplined rebalancing schedule:
Sell High: When certain investments grow beyond their target allocation, we take gains and move them into shorter-term buckets.
Buy Low: When markets pull back, we add to undervalued investments in your long-term bucket.
This keeps your plan aligned with your risk profile while systematically capturing market opportunities.
2. The Psychological Advantage
Knowing exactly which bucket will fund which stage of your retirement creates a powerful peace of mind.
You won’t need to wonder where your next few years of income will come from.
You can ride out market volatility without panic selling.
The Bottom Line
The 3-Bucket Strategy is just one way we help clients retire with clarity, control, and confidence. By aligning your investments with time and purpose, we make sure your portfolio supports both the length and quality of your life.
Ready to see how this could work for you?
Let’s talk about how we can tailor this strategy for your Wealthspan.
Schedule a Complimentary Strategy Session →
Disclaimer: The information provided is for educational purposes only and does not constitute investment, tax, or financial advice. Consult with a licensed professional before making financial decisions.
