Retiring soon? A three-bucket strategy may be just the ticket for your bucket list.
Last Update Date: 05-10-2026
Published by Mint
Abhishek Kumar's role: Wrote this article
Abhishek Kumar wrote this Mint column explaining how retirees can divide their corpus into short, medium and long-term buckets, and how to review and refill them over time.
What Abhishek Kumar said
What goes into each of the three retirement buckets?
I divide the corpus by when the money will be needed. The first bucket covers the opening two or three years of spending, including surprises, and sits in cash or near-cash such as savings accounts or short-term debt, so it is always on hand. The second covers roughly years three to ten in bonds, bond funds or balanced funds, which earn a little more and help keep pace with inflation. The third is for ten years and beyond, invested in diversified equity to grow through a retirement that may run twenty to thirty years.
Why bother with buckets instead of one balanced portfolio?
Mostly for behaviour. With a few years of spending already parked safely, a market fall does not force me to sell equity at the bottom, and I am less tempted to make a panic decision I would regret when markets recover. The buckets also let me choose where to draw from: in a down year I lean on the short- and medium-term buckets, and in a strong year I take profits out of the equity bucket and use them to refill the other two. Keeping equity in the long bucket also gives the plan some defence against inflation.
How do I set up and maintain a bucket strategy?
I would start by estimating expenses for each period — the first two to three years, years three to ten, and beyond — using conservative numbers and adding an emergency reserve. Then allocate: liquid, low-risk assets for the first bucket, a moderate-risk mix of fixed income or balanced funds for the second, and diversified equity for the third. After that, review the buckets about once a year and rebalance them back to their intended sizes, booking gains from the long bucket in good markets to refill the near-term one.
Should the bucket plan ever change once it is set?
Yes. A deep market fall, an unexpected medical bill or a change in how you want to live can all shift what each bucket needs to hold, so I treat the allocation as something to revisit rather than fix for life. I would also work through the changes with an adviser, so the buckets stay matched to your goals and your tolerance for risk as circumstances change.
In our words, from what he said in the piece. General information, not personal advice.
More of Abhishek's views on retirement
The column explains the bucket approach to managing money in retirement. Savings are split into a short-term bucket for the first few years of expenses, a medium-term bucket in debt and balanced options, and a long-term bucket in equity for growth. It covers how to size each bucket, rebalance once a year and refill the near-term buckets in good market years.
Publisher source
Retiring soon? A three-bucket strategy may be just the ticket for your bucket list.