Is your retirement plan in place?
The market may influence many to second-guess their retirement timing. Learn how to protect your hard-earned money and retire with success on your terms.
As you approach retirement, ensuring your financial security becomes a top priority. You’re finally envisioning all the things you can do in retirement that you never had time for such as catching up with old friends and spending time with the grand kids. However, you also might be stressed if your portfolio is retirement ready and prepared for a market decline. Fortunately, there are ways to help you prepare for the market’s unknowns as you approach retirement.
A popular strategy that many use is known as the ‘three buckets’ withdrawal strategy. This strategy allows you to divide your investments into three distinct buckets, each serving a specific purpose aligned with your unique financial needs.
Bucket 1: The Near Future (2-5 years)
This bucket is all about immediate needs, covering the next 2-5 years of your retirement journey. Whether it's funding vacations, handling unexpected expenses, or maintaining your lifestyle, you can allocate money here to ensure stability and peace of mind. Investments in this bucket include cash, term deposits, and some bonds—assets known for their low volatility and capital preservation characteristics.
Bucket 2: The Medium-Term (5-10 years)
For funds that won't be required in the next 2-5 years but will play a role in the subsequent 5-10 years, you have Bucket 2. While it carries a slightly higher level of risk, it ensures that it stays clear of the wild market swings. This bucket may include some fixed-income assets with moderate risk, aiming to maintain a balanced and steady growth path. Additionally, you can periodically move income from Bucket 2 to Bucket 1, which keeps Bucket 1 topped up.
Bucket 3: The Long-Term (10 years and beyond)
Looking ahead to the long-term financial goals, Bucket 3 is all about potential growth and maximizing returns. Here, this strategy embraces higher-risk investments, such as stocks, managed funds, ETFs, real estate, and more. While these assets might experience fluctuations, they are strategically chosen for their potential to deliver impressive returns over a 10-year horizon or more.
Do You Have a Strategy?
With so much uncertainty and so many investment options available, retirees shouldn’t have to do it alone. At York Wealth Management, our commitment to you is to provide a comprehensive retirement strategy—one that balances stability with growth potential. By diversifying your investments across different time horizons and risk levels, we aim to help you navigate market fluctuations with confidence. Your retirement should be a time of fulfillment and peace of mind, and we're here to ensure that your financial portfolio is well-prepared to support you throughout this journey. Feel free to reach out to me for a personalised conversation today.
Until next time.
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York Wealth Management Pty Ltd ABN 46 605 610 679 is an Corporate Authorised Representative of Samuel Allgate Investments Pty Ltd AFSL No. 420170; Financial Adviser Authorised Representative Number 001007979.
This article has been prepared without taking into consideration any investor’s financial situations, objectives or needs. Accordingly, before acting on the advice in this article, you should consider its appropriateness to your financial situation, objectives and needs. Every reasonable effort has been made to ensure the information provided is correct, but we cannot make any representation nor warranty as to the accuracy, completeness or currency of that information. To the extent permissible by law, no responsibility for any errors or misstatements is taken, negligent or otherwise. SAI or its authorised representatives may also receive fees or brokerage from dealing in financial products, see the Financial Services Guide for information about the services offered available at York Wealth Management.