Splits your portfolio into a spending bucket, an income bucket and a
growth bucket, then runs a year-by-year simulation to your life expectancy — refilling each
bucket from the one above it — to show when the money actually runs out.
Your result
Bucket 1 — cashBucket 2 — incomeBucket 3 — growth
What to look at next
Common questions
You divide the portfolio by when you will spend it. Near-term spending
sits in cash so a market drop never forces you to sell equities at a loss. Long-term money stays
invested for growth. The buckets refill downward — bucket 3 into bucket 2, bucket 2 into bucket 1.
No, and anyone claiming otherwise is selling something. Holding cash
lowers expected return. What it buys is the ability to not sell during a downturn, and the
psychological room to stay invested when it is hardest. Both are worth more in practice than
the return you give up.
Bucket 1 gets topped up from bucket 2 annually. Bucket 2 should be
refilled from bucket 3 only after a strong equity year. Refilling mechanically every year
regardless of markets removes most of the benefit, because you end up selling equities in
exactly the years you were trying to avoid selling them.
Together, ideally around ten. Most prolonged market declines have
recovered inside that window, so ten years of coverage means you are never forced to sell
growth assets at a loss. Under about eight years the protection gets thin.
Sustained high inflation, which erodes buckets 1 and 2 in real terms
while they sit in low-return assets. And a downturn long enough to drain both before equities
recover. Neither is common, but both are survivable with a longer bucket 2 and flexible spending.
Two portfolios can have identical average returns and completely
different outcomes depending on the order those returns arrive. Bad years early in retirement,
while you are withdrawing, do permanent damage that good years later cannot repair. This
calculator assumes constant returns and therefore understates that risk — which is precisely
the risk a bucket structure is built to manage.
Take this with you
Get your bucket plan as a PDF
Your allocation and depletion timeline, the refill
rules that keep the structure working, and the two market conditions where a bucket strategy
quietly stops protecting you.
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For professionals
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This calculator provides estimates for educational purposes only and is not
investment, tax or legal advice. Projections assume constant annual returns and constant
inflation, and do not reflect sequence-of-returns risk, taxes, investment fees, Social Security
timing, required minimum distributions, healthcare costs or long-term care. Actual results will
differ, often substantially. Consult a qualified financial professional before acting on any
figure shown here.