Distributing Funds After Retirement
Comments posted to “Using the Bucket Approach With Your Retirement Portfolio,” by Christine Benz, in the October 2013 AAII Journal.
I would like a clearer or more detailed explanation of how to use the buckets. Apparently living expenses are taken from bucket 1, but when should bucket 1 be replenished if one is reinvesting all dividends and interest? Should it be after one year, and should bucket 1 always have two years’ worth of living expenses? If so, should bucket 2 always have seven years’ worth of living expenses? I’m not sure if the article is advising retirees to spend down bucket 1 and then shift assets from bucket 2 to bucket 1, while shifting assets from bucket 3 to bucket 2. Or is it saying to do this yearly when rebalancing?
—Stephen Thomas from Florida
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