Christine Benz

“My takeaways A bucket strategy—holding cash reserves that can be used to meet living expenses in periods when the long-term portfolio has lost value—can provide valuable peace of mind for retirees in periods of market volatility. Bucket portfolios are eminently customizable: Retirees can use their anticipated portfolio spending to determine how much to drop into their cash bucket as well as their bond allocation. Ideally, a retiree would hold between seven and ten years’ worth of portfolio withdrawals in cash and high-quality bond assets. For retirees who are planning to cover any long-term expenses out of their own coffers, a fourth bucket, earmarked for long-term care and segregated from the spendable portfolio, can help provide peace of mind. Retirees who have multiple accounts—traditional tax-deferred, Roth, and taxable—will want to factor in their planned sequence of withdrawals from those accounts when determining the asset allocation for each sub-portfolio. Accounts that will be earlier in the spending queue, usually taxable holdings, should be more conservatively positioned, whereas those that will be later in the queue, such as Roth, should be more aggressive and stock-heavy.”
― Christine Benz, How to Retire: 20 Lessons For a Happy, Successful, and Wealthy Retirement

“So prioritize leaving Roth assets to human beings. Prioritize leaving tax-deferred assets to charity.”
― Christine Benz, How to Retire: 20 Lessons For a Happy, Successful, and Wealthy Retirement