Malinda Williams | Jul 10 2025 13:00
When you retire, your investment focus shifts from growing your wealth to generating reliable income that can last the rest of your life. One of the most effective ways to manage this transition is through the bucket strategy — a simple yet powerful framework that helps balance growth, income, and stability.
If you’re in or near retirement in Sumter, Columbia, or Florence, South Carolina, understanding how to structure your savings with this approach can help you feel more confident about your financial future.
What Is the Bucket Strategy?
The bucket strategy divides your retirement savings into three distinct “buckets” based on time horizon and purpose:
- Cash Bucket (Short-Term) – This holds money you’ll need in the next 1–3 years for living expenses, emergencies, or planned purchases. It’s typically kept in checking, savings, or money market accounts for stability and liquidity.
- Income Bucket (Mid-Term) – This includes low- to moderate-risk investments like bonds, fixed annuities, or dividend-paying funds. It’s designed to replenish your cash bucket every few years.
- Growth Bucket (Long-Term) – This holds stock-based or growth-oriented investments meant to outpace inflation and provide income later in retirement.
Each bucket serves a clear purpose — helping you manage volatility while keeping your income flowing no matter what happens in the market.
Why It Works
The biggest fear for many retirees in Sumter and surrounding areas is running out of money or having to sell investments during a downturn.
The bucket strategy addresses that by giving you a plan for when
and where
to draw income:
- Short-term cash prevents forced sales in bad markets.
- Mid-term assets create steady income replenishment.
- Long-term investments have time to recover and grow.
This approach blends psychology and math — giving retirees both financial stability and peace of mind.
How to Set Up Your Buckets
The right balance depends on your retirement timeline, risk tolerance, and other income sources such as Social Security or a pension. For example, a retiree in Sumter or Columbia might use:
- 2 years of expenses in the cash bucket
- 5–8 years in the income bucket
- The remainder in the growth bucket
This balance can be reviewed annually with your financial advisor to ensure it adjusts for inflation, interest rate changes, and evolving lifestyle goals.
A Quick Example
Imagine a retired couple in Florence, SC, with $600,000 in retirement savings:
- $80,000 in Cash (for near-term expenses)
- $200,000 in Bonds & Dividends (for mid-term income)
- $320,000 in Stocks (for long-term growth)
When markets dip, their living expenses come from the cash bucket. When markets recover, they refill it from their growth bucket — creating a sustainable system that adapts over time.
Key Benefits
- Smooths out retirement income through all market conditions
- Reduces stress during market volatility
- Helps preserve long-term growth potential
- Encourages disciplined withdrawals instead of emotional decisions
Start Planning Your Buckets
Every retiree’s situation is unique — and the right allocation depends on your income needs, lifestyle, and comfort with risk.
If you’re nearing retirement in Sumter or nearby communities like Camden or Florence, now is the time to build a strategy that fits your life and gives you confidence about your income.
Ready to take the next step?
Contact us today to discuss a personalized retirement income plan
and see how the bucket strategy can help you create reliable income that lasts.