Bucket Approach to Retirement Allocation: The Devil Is in the Details

Christine Benz
July 20, 2019 from 9:45 am to 12:45 pm

For investors trying to get cash flow from portfolios in today’s low-yield environment, the bucket approach may be a godsend. Structure the portfolio by spending horizons, set aside a cash component for near-term spending needs, and then spend through a long and happy retirement. Implementation can be a bit messy. However, the bucket approach will not guarantee that you won’t run out of money. There are no ironclad rules about how to manage and extract cash from a bucket portfolio across accounts with different tax treatment: traditional tax-deferred, Roth, and taxable accounts. This presentation delves into the logistics of building and maintaining a bucket portfolio on an ongoing basis.

ABOUT THE PRESENTER


Christine Benz, director of personal finance for Morningstar and senior columnist for Morningstar.com, is the author of “30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances” (Wiley, 2010). Benz is also co-author of “Morningstar Guide to Mutual Funds: 5-Star Strategies for Success,” a national bestseller published in 2003, and author of the book’s second edition, published in 2005. Before assuming her current role in 2008, Benz also served as Morningstar’s director of mutual fund analysis. She has served as editor of several of Morningstar’s publications over the years, including Practical Finance, Morningstar Mutual Funds, and Morningstar FundInvestor. She has worked as an analyst and editor at Morningstar since 1993. Benz has a bachelor’s degree in political science and Russian/East European studies from the University of Illinois at Urbana-Champaign.

Attend this seminar to learn:

  • How the “right” withdrawal depends completely on market history.
  • How to customize asset allocations based on expected cash-flow needs.
  • How to extract cash from portfolios and maintain the portfolios’ asset allocations throughout retirement in a tax-efficient manner.
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