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Buckets of Money

January 19, 2016

Retirement changes where your income comes from. When you began working, your income likely came from a paycheck, where you received your gross pay with taxes and deductions withdrawn. The amount you deposited each month was your net income.

Retirement is different. It is a stage of life where you receive passive income from your gathered assets rather than primarily from a paycheck.

People choose to return to work after retirement for many reasons, including health insurance, to cover unexpected costs that have arisen, and some return to work because they want something to do. The people who must continue to work in their later years likely have less passive net income than they have in expenses.

We know you envisioned your later years in life in a certain way and the feelings you have about your final decades of life carry a lot of emotion. We want you to have the retirement of your dreams, and we want the legacy that you build over your lifetime to positively impact those that you care about.

That’s why we’re here to tell you the tough news: Retirement lifestyle is determined by your income, not your assets.




It is never too late to get started planning for your future. But it is ideal to take each decade of your working years to build multiple Buckets of Money that you can lean on later in life for passive income.

Perhaps the Bucket(s) that you rely on for your lifetime income should have nominal risk, allowing you to rely on a certain amount of guaranteed income projected for your future. Social Security is a guaranteed income stream for those who meet the qualifications. It also has the potential to be maximized so that you can receive that lifetime benefit at your maximum allotment of monies, with relatively little risk.

Other examples of income producing Buckets of Money are Pensions, non-tax qualified IRAs, 401(k)s, 403(b)s, and Annuities. When these Buckets are used in tandem with your Social Security income benefit, they can often result in higher lifetime income yield, than when drawing down each account without a strategic plan, whenever a need arises for you or your family.




The key is knowing when and how to tap each of the buckets so that they do work together without unintended consequences. That is why you hire a qualified financial professional who specializes in building streams of income from your assets. Some Buckets of Money can be turned on and off, and some cannot be turned off once they’ve begun.

Even some of the most reliable streams of income can have restrictions built into them so it’s important to hire a qualified financial advocate who knows your personal situation. A qualified financial professional, such as a Certified Financial Planner™, should understand the intricacies of all of these types of accounts- securities and insurances, alike. Income recommendations of this type need to be personalized for you specifically, as every person and every family’s financial situation is unique.