Thousands of Retirements, One Surprising Result: The Safer Strategy Fails More Often

Comments · 1.2K

• RO

  @robertbass974 · 1 month ago

  My bucket strategy was a little dirrerent. I went 3 year cash bucket, a brokerage acount, and a large lifetime non qualified fixed annuity. It has worked so well that my wife and I waited until 70 to take social security. I sold all of our stocks at 60,retired at 65 and don't worry about stocks,rmds and just enjoy our retirement on 15K a month with low taxes!

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• US

  @user-sp2si2ev8t · 8 months ago

  This marks the beginning of my fourth year of retirement. I use a bucket strategy and have been very conservative with the money I need to fund my early retirement years. Now that I’m approaching Social Security and will soon have annuity income, I’m starting to gradually increase my stock holdings and reverse my glide path.

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• FA

  @fancycavegaming620 · 4 months ago

  I think the important thing with a big portfolio is still to keep minimum expenses low as possible. That decreases the emergency cash requirements and lets you par down your lifestyle during market downturns.

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• BO

  @bobc104 · 8 months ago

  I’ve been retired for a for several years now. My wife and I started watching your videos a few months ago and we have learned so more in the short time watching your videos, then in the past 10yr year talking to and watching our financial advisor videos. We are now sharing your videos with all of our friends.  So, thank you, looking forwards to your next video. PS we also like the bloopers

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• PE

  @peterwright837 · 8 months ago

  One of my biggest problems with a static rebalancing portfolio is deciding on how much to allocate to stocks vs bonds. The risk questionnaires are useless. It’s easy to say you can handle a 30% decline until it actually happens to you. I finally decided on backing into my “safe” money bucket allocation by estimating 5-6 years worth of  funding needed from my portfolio, which for me ended up being about 13% of the total. So that 13% is in money market and short term bond funds. About 80% is in equities and the balance is in intermediate to long term bonds, which will be rebalanced as appropriate.

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• OL

  @Oleldygmr88 · 8 months ago

  The bucket strategy could actually be no different than rebalancing approach - the key I think is you set your amount in “safe” investments based on 3-5 years expenses (instead of a 70/30 or similar split), but if there is a down market you use part of that balance to re-invest to take advantage of the recovery.

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• PH

  @philruehlen · 8 months ago

  Erin,  I am 71 and have been retired for 4 years.  Every December, I plan my next years spending.  I have a 65% stock 35% bond portfolio.  In January, I pull out the cash that is needed for that year's spending.  It is important to point out that next year's cash includes a portion for unplanned expenses.  And the cash includes the federal and state taxes needed to pay for my Roth conversion strategy (fill up 22% tax bracket).  I then rebalance to the 65% 35% ratio.  Has worked great!   I am blessed in that I have a larger portfolio now than when I started this process.  I think the rebalancing and taking the cash will be more difficult in years where the portfolio has decreased in value!

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• PR

  @ProCoach2373 · 8 months ago

  You're killing it Erin! The amount of effort you put into these videos is ridiculous in a good way. I feel better about a large cash bucket too, but I was blessed to retire at a young age which changes things up. With that said, I will utilize my cash bucket to buy low and I do plan to rebalance my retirement accounts when they get off the mark by say 5%, but not my brokerage for tax reasons.

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• DI

  @div8250 · 8 months ago

  Oh these spammers are on full force.  How does you tube not figure out a way to declutter these comments.   Keep it up Erin, your channel is great.  I'll do my part and, keep reporting your spammers.

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• LI

  @lizs502 · 7 months ago

  If the cash bucket is in a core position earning approx a half percent less than 4 week t-bills, can that be considered just part of the bond portion?  I'm confused now whether my cash bucket is cash or bonds.

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• JA

  @JamesJoseph-u1y · 4 months ago

  Any strategy which provides true peace of mind for a retiree is the one to use, even if it is "suboptimal". There are enough other things in life to worry about and if using the bucket strategy helps eliminate one of them, finances, then it is superior. And as others have noted, short term gov't bonds are basically the same as cash, although their principal value can decrease when interest rates rise. For this reason, cash in a MMF is actually in some ways better than government bonds. I am a 6 year retiree, and I'm mostly a bucket type of guy, but not completely.

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• ER

  @ericchild3363 · 8 months ago

  I have 3 buckets: B1=3 years of "cash" to avoid selling stocks during downturns, B2="cash" to "buy the dip" after a downturn, B3=all stocks. I use B3 to fund all my costs until I think there is a downturn underway. The challenge will be knowing when to stop using B3 and to start using B1, and also  when to use B2. Assuming I get this right I would sell B3 to replenish B1and then B2 one B3 recovers.

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