On today’s Intelligent Money Minute, we interview Morningstar’s director of personal finance, Christine Benz on the retirement bucket approach. Christine has been a longtime believer in this retirement bucket strategy. During this episode, Christine defines the retirement bucket approach and highlights the pros and cons of this strategy. The basic idea is securing one to two years of portfolio withdrawals. A critical component of this approach is setting aside cash reserves. Liquid reserves can bring peace of mind to those employing a long-term portfolio strategy. There is some initial risk building this cash reserve, but you build yourself a bulwark that you can spend through as opposed to a depreciated equity holding.

It is important if not vital for retirees to have a plan for liquidity needs. Perhaps setting aside 1-2 years of living expenses in a money-market type of account or investment is best. Perhaps it is utilizing a bucket approach. Without understanding a clients’ needs, wants, and wishes, and having a timeline for when those expenses may occur, your plan and/or portfolio may not be optimized. We’d be happy to have a quick call or coffee with you to start the conversation of how we may best serve you and your family. To get started, please visit investedwithyou.com.

We’ll be interviewing Christine on several podcasts regarding retirement strategies, passive investing, and diversification, so be sure to subscribe to our Intelligent Money Minute podcasts.

Christine Benz Bio

Christine Benz is Morningstar’s director of personal finance and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances and the Morningstar Guide to Mutual Funds: 5-Star Strategies for Success. She holds a bachelor’s degree in political science and Russian/East European studies from the University of Illinois. Christine lives in the Chicago suburbs with her husband, Greg. She is an avid cook, a political junkie, and a long-suffering Chicago Cubs fan. Follow Christine on Twitter.


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