Big Red Bucket Theory: How to Visualize Your Retirement Plan

A red bucket with hundred-dollar bills in it, sitting by a window.

(Image credit: Getty Images)

published 23 July 2025

I've been noodling on a new way to think about retirement planning, and I'd love to share it with you. It's still a work in progress, but I think it offers a helpful, and hopefully memorable, visual for anyone wondering, "When can I retire, and how much do I need?"

So, let's talk buckets. More specifically, one big red bucket.

What is the Big Red Bucket Theory?

Picture a large red bucket. That bucket represents your retirement savings. During your working years, your mission is simple: Fill that bucket. Every paycheck contribution, bonus, tax refund or one-off windfall adds to it.

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The more you put in while you're working, the more you'll have when it's time to retire.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

But once the paychecks stop, the game changes. You stop filling the bucket and start drawing from it to cover your expenses. No second or third buckets, just one. This one bucket has to carry you through retirement.

Retirement expenses: How much will you take out?

Here's the key question: How much money will you need to pull from that bucket throughout your retirement? We're talking about every dollar you'll spend, from groceries and gas to travel and health care.

That gives us two crucial numbers to work with:

The amount in your big red bucket at retirement
The total amount you'll need to take out during your non-working years

Life happens: The leaky bucket problem

Here's where it gets interesting and unpredictable. Life rarely follows a straight line. You might retire early, travel more, help out family or buy a second home. Each of these decisions is like poking a hole in your bucket.

These "holes" cause your retirement savings to drain faster.

On the flip side, working longer, spending less or receiving an inheritance can act like extra scoops of money into your bucket. These variables either accelerate or ease the drawdown on your savings.

Planning for a secure retirement

This is the real work we do as financial advisers, helping you figure out not just how full your bucket needs to be, but how many holes you're planning to drill into it. None of this is inherently good or bad, it's just about understanding the trade-offs.

Want to travel the world in retirement? Great! Let's plan for that extra hole in the bucket. Thinking about downsizing your home? That might patch one up.

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It's all about helping you visualize your future so you can make decisions that support the retirement you want.

So, what's in your bucket?

At the end of the day, the Big Red Bucket Theory is a simple way to understand the cause and effect of your financial choices. You need to know:

How much you have in your retirement bucket
How much you plan to take out
How many holes you might be adding along the way

Answer those, and you're well on your way to building a dignified, sustainable retirement.

As always, stay wealthy, healthy and happy.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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In March 2010, Andrew Rosen joined Diversified, bringing with him nine years of financial industry experience. As a financial planner, Andrew forges lifelong relationships with clients, coaching them through all stages of life. He has obtained his Series 6, 7 and 63, along with property/casualty and health/life insurance licenses. Andrew consistently delivers high-level, concierge service to all clients.