Confidence in Retirement with Bucket-Based Planning
As discussed on Today’s Business Radio, airing on Twin Cities stations KFAN and KTLK, host Tom Lyons sat down with Joe Grochowski, an senior wealth advisor from Vector Wealth Management, to talk about how bucket-based planning organizes retirement savings into time-based segments, giving clients confidence.
Many investors—especially retirees—are looking for more than strong returns. They want confidence that their financial plan will support their lifestyle, even when the markets are unpredictable. At Vector Wealth Management, we use a bucket-based financial planning approach designed to provide both stability in the short-term and growth in the long-term, helping clients focus on living their lives instead of worrying about short-term market swings.
What Is Bucket-Based Financial Planning?
Bucket-based financial planning organizes your portfolio by time horizon rather than by asset class alone. Instead of thinking about all your investments as one pool of money, we divide them into distinct “buckets” based on when you’ll need the funds. This structure we believe, helps smooth out the bumps of market volatility while ensuring that near-term and intermediate spending needs are covered.
The Four Buckets in Practice
Think of your portfolio as four buckets, each aligned to when you'll use the money:
Near-Term Spending (Now-2 Years)
Very conservative holdings designed to cover day-to-day living expenses. This near-term bucket reduces the need to sell to cover expected spending during market dips.
Stability/Preservation (~ 2-5 Years)
An intermediate segment of moderate and conservative assets meant to hold up against extended volatility.
Growth (~ 5-10 Years)
Diversified growth assets staged with time to recover from interim declines and outpace inflation.
Long-Term/Legacy (10+ Years)
Higher growth potential aimed at sustaining retirement over decades and supporting legacy or charitable goals.
This structure helps ensure immediate needs are planned for while giving longer-term investments the time they need to grow. Since a segment of retirement money won’t be needed for many years, it can ride out market volatility and benefit from the power of compounding.
Why It Works
When the market dips, retirees with a bucket plan know their near-term expenses are already covered. This breathing room helps reduce panic and prevents hasty, emotional investment decisions. Instead of worrying about daily market movements, clients can chose to stay focused on enjoying retirement.
More Than Just Returns
Financial confidence isn’t only about maximizing returns. It’s about aligning money with life goals—whether that means planning a family vacation, giving to charity, or preparing for unexpected expenses. A bucket-based financial planning approach brings structure and clarity to these goals, ensuring that wealth serves its true purpose: supporting the life you want to live.
Getting Started
The first step in bucket-based planning is clarity—understanding how much money you’ll need in the near term, what should be set aside for later, and how your long-term goals fit into the picture. At Vector Wealth Management, we guide clients through that process, mapping out cash flows, lifestyle priorities, and legacy intentions. With a clear framework in place, each dollar has a role and each bucket has a purpose, bringing order and confidence to even the most complex financial situations.
Ready to learn more? Schedule a consultation today.
This content is provided for general information and should not be treated as a substitute for professional advice. Investments involve risk, including the potential loss of principal.
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