The Buckets of Money® Retirement Solution: The Ultimate Guide to Income for Life

Chapter 5. Execute the Buckets of Money Strategy

Meet Bill and Betsy Bucketeer. Bill and his wife Betsy have accumulated $1 million. (Don't sweat it if you haven't accumulated that much—or have accumulated a lot more. The concept remains the same, regardless.) Both aged 62, they each want to retire in four years when they'll get full Social Security benefits totaling about $45,000 per year. They'd like to receive a $50,000 per year income from their investment portfolio to add to that Social Security check. They save about $30,000 annually and are quite conservative with their spending. Both Bill and Betsy's families have particularly long life expectancies, well into their late 80s or early 90s. So Bill and his wife want to be sure they will never run out of money even if they live for several decades in retirement.

The Bucketeers' situation is somewhat typical, so we're going use them as our guinea pigs to see just how investing with a Buckets of Money strategy might work out. Of course, they're a hypothetical couple and are being used only as an example. Actual results may vary, and past performance is no guarantee of future returns.

First, Check Goals

The first thing we must do for the Bucketeers is to see if their goals are realistic. How much will their portfolio likely be worth in four years? Assuming they earn approximately 6 percent on the overall portfolio and add $30,000 per year from savings, their $1 million should grow in four years to about $1.4 million. Keep in mind ...