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Navigating the future can be tricky for Canadians. Especially if you are getting ready to retire, or already retired.

On the one hand, markets can be unpredictable, running smoothly one day and choppy the next.

On the other, you may need to stay in those markets to make your retirement savings last. Nowadays Many Canadians are living 20-30 years or more in retirement.  

So you might be asking yourself, how can you create a more stable and sustainable income over all those years? How can you balance your cash withdrawals, while growing your savings so they’ll last?

There is a solution that can help you with both of these goals. It’s a different way of thinking about your investments in retirement.

It’s called the bucket portfolio strategy. It’s where you split your savings into three buckets, based on when you’ll need your money. Let me show you how it works.

The long-term bucket is for growth, not income. It’s where you’ll hold investments over many years. Now this is important – because when you have time on your side, you can choose investments with higher growth potential, like equities. And the growth you get here can help top up your other two buckets as you spend your retirement savings.

For your mid-term bucket, this is where you’ll hold your income-generating investments, like bonds and mutual funds. You could also have some more conservative equities here for a bit of growth.

What’s the purpose of this bucket? It does two things for you:

It can help to reduce the effect of any short-term market swings on your savings. If you tend to worry about sudden changes in the stock market – this bucket helps with that.

It creates cash flow that will go into your short-term bucket when you need it for spending.

The short-term bucket holds cash and short-term investments for your regular withdrawals and any emergency funds you may need. It’s the most conservative of the three buckets since you want your money to be there when you need it.

With a bucket portfolio, you’re more likely to have the right blend of potential growth and cash flow in your portfolio. It’s like a three-legged stool, perfectly balanced.

And that adds up to two important advantages:

First, your money will likely last longer.

Second, you’re more likely to stick with your plan as you enter and live out your retirement.

And that’s exactly what a retirement plan is all about.

If you’re interested in learning more about bucket portfolio strategies, talk to your advisor. They can help you decide if this approach is right for you.

On the other, you may need to stay in those markets to make your retirement savings last. Nowadays Many Canadians are living 20-30 years or more in retirement.

So you might be asking yourself, how can you create a more stable and sustainable income over all those years? How can you balance your cash withdrawals, while growing your savings so they’ll last?