Part 5/8:
When planning for retirement, especially for those aged 50 or older, it’s essential to distinguish between different types of investment accounts based on when funds will be needed. Here are some strategic guidelines:
The Bucket Strategy
The "bucket strategy" is a popular method for managing retirement savings. It involves splitting your investments into different "buckets" based on timeframes when the funds will be needed:
Short-Term Bucket: This strategy focuses on immediate expenses. Ideally, this fund should consist of stable, liquid investments that provide enough income to cover living expenses.
Medium-Term Bucket: This account is designed for income needed in the next five to ten years, balanced for moderate growth with relatively lower risk.