“You need a clear bucket plan to avoid sequence of returns risk and minimize your tax bill. Here’s what I mean: when markets fall during the first few years of your retirement and you’re forced to sell investments while they’re down to fund living expenses, it will permanently damage your portfolio. That’s called sequence of returns risk—and I think it’s the most overlooked threat to retirement success. A well-structured bucket plan solves for that by dividing your money into three categories:
- Now (0–1 years): Cash and liquid reserves for predictable expenses. This keeps you from tapping investments when the market’s down.
- Soon (2–10 years): Stable, income-generating assets for near-term needs. Think of it as your bridge to long-term growth.
- Later (10+ years): Stocks and long-term growth assets designed to beat inflation and support your future self.”
