Bucket Strategy Calculator
Enter the portfolio, spending and bucket sizes to see the blended return.
Blended portfolio return
β
Enter values above
Cash bucket
β
Bond bucket
β
Equity allocation (%)
β
Years of spending covered
β
Portfolio lasts (years)
β
Worked example
With the default inputs shown below, this calculator returns the following results:
| Input | Value |
|---|---|
| Retirement portfolio ($) | 500000 |
| Annual spending ($) | 35000 |
| Cash bucket (years of spending) | 2 |
| Bond bucket (years of spending) | 5 |
| Cash return (%) | 3 |
| Bond return (%) | 4 |
| Equity return (%) | 7 |
| Inflation rate (%) | 2.5 |
| Result | Value |
|---|---|
| Blended portfolio return | 5.39% |
| Cash bucket | $70,000 |
| Bond bucket | $175,000 |
| Equity allocation (%) | 51.00% |
| Years of spending covered | 14.3 |
| Portfolio lasts (years) | 20 |
Values shown are produced by this page in your browser; change any input to update them.
How to use the Bucket Strategy Calculator
- Retirement portfolio ($) β default 500000
- Annual spending ($) β default 35000
- Cash bucket (years of spending) β default 2
- Bond bucket (years of spending) β default 5
- Cash return (%) β default 3
- Bond return (%) β default 4
- Equity return (%) β default 7
- Inflation rate (%) β default 2.5
- Press Calculate to update the results instantly.
Frequently asked questions
Because sequence-of-returns risk is real. Cash and bonds let you fund spending through a bear market without selling equities at depressed prices, which is what turns a temporary fall into a permanent loss.
The classic answer is two to three years of spending in cash and a further four to six in bonds. The rest stays in equities to do the long-run heavy lifting.
Annually, or whenever equities have had a strong year. Selling into strength to top up the cash bucket is one of the few reliable rules in retirement planning.