From Bucket Strategy to Bucket List
We all have wishes and dreams about what we would do in life if we only had the time, the money, and the freedom to be able to make it happen. I’m sure you’ve thought about it yourself from time to time… whether it’s learning a new language or two so that you can travel to distant exotic places, or maybe training for a triathlon while you’re still able to move around gracefully, or even just stay in town to enjoy the comforts of family. Of course, all too often, the rigors of life and work are standing in the way.
This is why retirement can be the perfect opportunity to take another look at those wishes and possibly make some of them come true. Maybe even invent some new ones that you’d never thought of before. It seems like there’s never been a better chance than now, at your retirement, to make it all happen.
Of course, as much fun as all of that is, you’ve got to be able to afford to get there. The last thing you want to do is to run out of money just as you’re starting to enjoy what could be the best part of your entire life. You’ve just retired, you’re still relatively young, healthy, and able, and often times these early years are characterized by high spending. But if you’re withdrawing money from your portfolio to fund your lifestyle and it’s coming from volatile assets that go up and down with the stock market, you could be asking for major trouble. Research has shown that large distributions from portfolios that are going down in value from market declines can cause your assets to become depleted faster than expected – and they may never recover. We call it Sequence of Returns Risk.
That’s why it’s vitally important that your retirement strategy takes these risks into consideration and addresses them. You don’t want to have to cancel your trip to Italy or tell the grandkids you can’t visit for Christmas simply because the markets took a bad turn. You want the source of your income to be there, ready for you, whether the markets go up, down, or sideways – yeah, just like they do all the time.
It’s why we’ve used the Bucket Strategy for all these years. By putting a segment of your portfolio into lower-volatility assets to fund your short-term needs, you’re helping to potentially protect yourself from the risks of outliving your retirement savings.
Information presented should not be considered specific tax, legal, or investment advice. You should always seek counsel of the appropriate advisor prior to making any investment decision. All investments are subject to risk including the loss of principal.
The strategy involves investments subject to risks, fees, and expenses. There is no guarantee that any investing strategy will be profitable, provide protection from loss or meet its stated objectives.
No client or prospective client should assume that the information contained herein (or any component thereof) serves as the receipt of, or a substitute for, personalized advice from Lucia Capital Group, its investment adviser representatives, affiliates or any other investment professional.
Raymond J. Lucia Jr. is chairman of Lucia Capital Group, a registered investment advisor and CEO of its affiliated broker/dealer, Lucia Securities, LLC, member FINRA/SIPC. Registration with the SEC does not imply a certain level of skill or training. Advisory services offered through Lucia Capital Group. Securities offered through Lucia Securities, LLC.