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Tuesday
Jul092013

A New Kind of Bucket List

 Retirees love to talk about their Bucket Lists, their current adventures and travel, and all the things they would like to do before it is too late.  You can have great fun constructing this checklist of what is possible, what is probable, and maybe some things that are way out there.

This Bucket List theory can also apply well to retiree financial situations.  We know the volatility of the stock market causes people angst, distress, and can leave them unable to make decisions.  But think of your finances in two separate buckets.  The first is a cash bucket that has up to 18 months or possibly two years worth of cash that will be used for current spending.  This bucket includes pensions, social security, and income from investments that should be there for the designated time.

The second bucket is an investment bucket with a well-diversified portfolio, preferably managed by professionals. Although we never lose sight of the second bucket, we can let it ride through the normal gyrations of the financial markets.  This strategy can help provide investor confidence.

Our cash bucket can be replenished by adding dividends from the fixed income portion of our investment bucket.  Some folks like to add a third bucket, a wish list bucket to have cash available to fulfill the traditional Bucket List of adventures.  This can be filled when we do not spend as much as planned and with potential excess appreciation of portfolios.

So while you’re dreaming up exotic destinations, mountains to climb, or wineries to visit, also make plans to fill your financial buckets. It will make it much easier to check off the things you’ve waited your whole life to do!


Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Investing involves risk and you may incur a profit or loss regardless of strategy selected.  Diversification does not ensure a profit or guarantee against a loss.  Dividends are not guaranteed and must be authorized by the company’s board of directors.