A Bucket Plan to Go with Your Bucket List
Posted by Jeffrey Budzinski on August 20, 2024
John and Mary are nearing retirement, and they have a lot of items on their bucket list. Longer life expectancies mean John and Mary may need to prepare for two or even three decades of retirement. How should they position their money?1
One approach is to segment your expenses into three buckets:
- Basic Living Expenses— Food, Rent, Utilities, etc.
- Discretionary Spending — Vacations, Dining Out, etc.
- Legacy Assets — for heirs and charities
Next, pair appropriate investments to each bucket. For instance, Social Security might be assigned to the Basic Living Expenses bucket.2
For the discretionary spending bucket, you might consider investments that pay a steady dividend and that also offer the potential for growth.3
Finally, list the Legacy assets that you expect to pass on to your heirs and charities.
A bucket plan can help you be better prepared for a comfortable retirement.
Call today and we can develop a strategy that may help you put enough money in your buckets to complete all the items on your bucket list.
Jeffrey M. Budzinski, CFS®, Director of Wealth Management, may be reached at 716-856-3300 or jbudzinski@lumsdencpa.com.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.
Citations
1. John and Mary are a hypothetical couple used for illustrative purposes only. Diversification is an approach to help manage investment risk. It does not eliminate the risk of loss if security prices decline.
2. Social Security benefits may play a more limited role in the future and some financial professional recommend creating a retirement income strategy that excludes Social Security payments.
3. A company’s board of directors can stop, decrease or increase the dividend payout at any time. Investments offering a higher dividend may involve a higher degree of risk. Keep in mind that the return and principal value of stock prices will fluctuate as market conditions change. Shares, when sold, may be worth more or less than their original cost.
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Jeff has been in the financial services industry for over 20 years. He is a Certified Fund Specialist® from the Institute of Business and Finance and has passed his SIE, Series 6, 7, and 63 exams as well as holding Life, Accident, and Health insurance licenses. He is experienced in qualified plan design as well as custom income strategies and cash flow. Jeff also has significant experience with insurance planning as a strategy to protect wealth and future generations. Jeff has studied modern portfolio theory, which is vital to efficient portfolio modeling, allowing for mean-variable analysis with a mathematical framework that is consistent with individual risk factors.