Put Time on Your Side With This Simple Retirement Strategy

A financial professional recommends thinking in terms of three financial stages — active years, slower-paced years and later years — assigning each one a unique bucket of investments.

By Pete Tychsen, Investment Adviser Representative

published 10 May 2025

in Features

Three alarm clocks lined up against orangish background. — (Image credit: Getty Images)

When you think about retirement, what comes to mind? Is it the excitement of endless vacations and hobbies, or the nagging worry about running out of money?

Regardless of which direction your initial thoughts go, a smart financial strategy can help you have the best of both worlds: reduced worries about finances and the freedom to live your dreams.

One such strategy is “time bucket planning,” which divides your retirement savings into three buckets with the goal of helping you enjoy a more comfortable and fulfilling retirement.

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This article is written by Investment Adviser Representative Pete Tychsen, president and owner of Preservation Financial Group. Pete is passionate about helping clients protect, grow and balance their retirement assets.

Time bucket planning is more than just a way to manage your savings. It's designed to help you maintain financial stability throughout all phases of retirement while keeping your changing needs in mind. It allows you to weather market fluctuations and inflation while securing your lifestyle.

How does time bucket planning work?

With time bucket planning, each bucket is invested according to its unique time horizon and risk tolerance.

Short-term bucket (0-7 years)

Goal. To cover living expenses and lifestyle costs in your early retirement during the “go-go” years.
Characteristics. Low risk and highly liquid (easily accessible). Think cash and cash equivalents, money market accounts, short-term bonds, or CDs.
Example. Imagine you’re traveling across the country in an RV, visiting national parks. This bucket ensures you don’t have to worry about market crashes affecting your ability to fund your trips and daily expenses.

Midterm bucket (7-15 years)

Goal. To provide steady income as you begin to slow down during the “slow-go” years.
Characteristics. Moderate risk, aiming for a balance between growth and income. Investments in this bucket could include a mix of bonds, dividend-paying stocks and balanced funds.
Example. Think of this bucket as your backup plan if you’ve shifted from hiking and travel to a more relaxed lifestyle with grandkids. You need a mix of safe and growing assets to bridge the gap.

Long-term bucket (15+ years)

Goal. To grow your savings for long-term care and the later “no-go” retirement years, when you’re likely to stay home more.
Characteristics. Higher risk, long-term growth. Investments could include stocks, real estate, exchange-traded funds (ETFs) and other long-term growth assets.
Example. If you’re spending your retirement years closer to home, this bucket helps your money account for inflation and supports you as you age.

Why use time bucket planning?

Using a bucket strategy literally puts time on your side. It allows you to build a retirement plan that balances safety, income and growth, while also prioritizing your lifestyle goals.

Your retirement is bound to be more comfortable if you’re confident you’ll have the means to support yourself now and in the future.

You can stress less about spending money in your “go-go” years (while you still want to be active and celebrate your newfound freedom) because you’ll have an opportunity to grow money that’s earmarked for later.

And the strategy is flexible. You can regularly review and tweak the investments in each of the three buckets to fit your risk tolerance and time horizon or a change in your financial situation.

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Another plus is that by spreading your savings across different types of investments, you can reduce the risks associated with market volatility and lower the chances you might have to sell investments during a market downturn.

The downside? It’s not necessarily an easy strategy to implement on your own. Choosing the best investments for each bucket can take time and research. Managing and rebalancing those assets when necessary requires expertise and an ongoing commitment.

If that’s not your thing, I recommend teaming with a knowledgeable financial professional who will do the work for you and look out for your best interests. After all, you want to relax and enjoy the retirement you’ve worked so hard to earn.

Kim Franke-Folstad contributed to this article.

The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

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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As president and owner of Tallahassee-based Preservation Financial Group, Pete Tychsen is passionate about helping clients protect, grow and balance their retirement assets. Though he takes his duties as a licensed financial adviser and licensed insurance agent seriously, he also tries to educate his clients, and future clients, in a fun and engaging way. Pete’s practice, which he opened in 1996, focuses on IRA and 401(k) distribution, tax strategies, asset protection and retirement income planning.