Buckets of Money for Retirement Income

What is the best way to generate income from your retirement portfolio? Many retirees working with other advisors use a systematic withdrawal approach, taking a set portion from their total portfolio every month, regardless of whether the market is up or down. Using this type of plan involves selling more shares when the market is low and selling less shares when the market is high, which is the exact opposite of a sound income withdrawal strategy.

At WealthCare Partners, we have a ‘Buckets of Money’ approach to help eliminate, or at least minimize, many of the problems that retirees face when planning to withdraw investment assets for retirement income. This gives a better chance of not outliving retirement funds, reducing anxiety during poor markets and providing a sound strategy for long-term income. To accomplish this goal, our approach utilizes multiple investment strategies to fulfill the purpose of each ‘Bucket’.

For clients needing retirement income, we have their money invested in three separate buckets, with each bucket having a specific goal for what funds it is invested in based on when the money will be used for income. When deciding where to allocate money for each bucket, we also consider what type of investment accounts the funds may be coming from—whether that be from IRAs, Roth IRAs, annuities, or taxable accounts. Our goal when setting up the withdrawal strategy through our bucketing approach is to not only maximize income over time but also be tax savvy to minimize taxes paid in retirement.

Our strategy of providing retirement income takes more time to implement than the systematic withdrawal approach that many other advisors use. However, utilizing our Buckets of Money can help increase the likelihood that clients retire with their desired income goals while helping to alleviate worry about the daily swings of the stock markets. It positions short-term investments for income and long-term investments for growth, which can play out to be a sound retirement income strategy.

To learn more details about our Buckets of Money approach to retirement income and how it can help you reach your goals, please contact us at our office (317-968-9200).