Created by Raymond J. Lucia, Sr. CFP^®, the Bucket Strategy™ is an asset allocation philosophy for individuals approaching retirement or those who have already retired. For more than two decades, retirees have used the Bucket Strategy™ to manage their retirement portfolios and work toward their financial goals.

The Bucket Strategy™ segments a client’s retirement portfolio into three general Buckets: Income, Safety and Growth. These Buckets are further classified into five categories: Lifetime Income, Fixed Income, Relative Safety, Growth & Income and Long-term Growth. At the strategy’s core is the concept of matching assets to liabilities. Short-term liabilities or income needs are matched against short-term fixed income assets. Longer term liabilities or income needs later in retirement are matched against long-term growth focused investments. This framework provides for an interactive process between our clients and advisors to design a unique portfolio for each client. Time horizon, risk tolerance, total return assumptions, and number of “buckets” vary client by client based on their unique situation.

A properly designed Bucket Strategy™ uses investments to draw income, when needed, in order to allow time for more risky investments in the portfolio to potentially grow. When implementing investment solutions, we recommend that our clients avoid taking any more risk than their Bucket Strategy™ suggests is appropriate.