Buckets: Your Retirement Lifeguard

This is an excerpt from our eBook, Retirement: Finding the Right Path to Your Next Big Adventure. Get the full eBook for FREE. Download here.

You’ve finally made the decision to retire. That’s so exciting! But, just because you’ve taken the leap doesn’t mean you’re done planning. You’ve completed the accumulation portion, now it’s time for the distribution phase—and this phase requires its own plan of action.

Post-retirement tips:
 

• Don’t miss your deadlines. Know when and how to take withdrawals or risk hefty excise taxes.
   

• Revisit your estate plan. Things have a tendency to change. Review your estate plan yearly, at the very least, to make changes to your beneficiaries, add assets and confirm that the plan supports your end goals.
   

• Manage your new “income normal.” The bi-weekly check is gone now—instead your money will come from several different sources and arrive at different times during the month. Avoid confusion when paying your bills by using online or mobile financial tools that will help you stay on top of the timing.
   

The bucket philosophy
Instead of simply using a savings account, make your money go further by investing it in different accounts, or buckets, that serve different purposes.

Bucket #1—Living expenses
A portion of your money should go into a household account. This is the one you’ll use most often and is easily accessible to pay everyday expenses.

Bucket #2—Short-term savings goals

Will you need a car in the next year or two? Taking a vacation soon? Invest this money into a certificate account, a Treasury bond or FCID-insured CD. Choose a maturity date that will give you access to the money when you expect to need it. Until then, it can earn interest!

Bucket #3—Emergency fund

This money needs to be accessible in an instant. Put away enough to cover three months or so of expenses.

Best advice? Don’t do it by yourself. Retirement can be complicated and confusing. Get a clear picture of your finances with the help of a financial advisor. Mountain America Credit Union has experienced advisors that can guide you through your retirement with ease. Contact us today!

Interested in more on retirement? Download our eBook, Finding the Right Path to Your Next Big Adventure. Learn more about:

• What questions you should be asking.

• Why it’s so important to start early.

• What to do if you’re starting later in life.

• How to plan for emergencies.

• How to manage your retirement income.

Download my eBook