Bucket strategy calculator

Free, no signup. Split a retirement portfolio into cash, bond and stock buckets by years of spending, see the allocation that results, and test it across 1,000 simulated markets.

Updated October 14, 2026 · By Berkay Kolay

The calculator

Portfolio ($)

Annual spending ($)

Social Security and pensions a year ($)

Years of spending in cash

Years of spending in bonds

Bucket 1: cash$72,0007% of the portfolio

Bucket 2: bonds$288,00029% of the portfolio

Bucket 3: stocks$640,00064% of the portfolio

Withdrawal rate3.6%10.0 years of spending outside stocks

The portfolio covers $36,000 a year after other income. Holding 2 years in cash and 8 in bonds leaves 64% in stocks: in effect a 64%/36% stock and bond portfolio with a spending reserve.

Run 1,000 market paths

Success rate80%1000 seeded paths

10th percentile ending$0

Median ending$1,137,865

90th percentile ending$4,432,205

How the retirement bucket strategy works

Bucket 1, cash: one to three years of spending in cash or a money market fund. You spend from here, so a market fall never forces a sale.
Bucket 2, bonds: the next several years of spending in high-quality bonds, which refill bucket 1.
Bucket 3, stocks: everything else, invested for growth over the long run and used to refill the bond bucket after good years.

Spending is what the portfolio has to cover after Social Security and pensions, so other income shrinks the cash and bond buckets you need.

Refilling the buckets

The rules for moving money down decide how the strategy behaves. A common one is to refill cash from bonds every year, and bonds from stocks only after stocks have gained, so you never sell stocks after a fall. Without a rule like that, a long bear market can empty the bond bucket and force sales at the bottom anyway. The sequence of returns calculator shows why the first years of retirement matter most.

What a bucket plan really is

A bucket plan is an asset allocation with a story attached: the total of cash, bonds and stocks is what earns the return. Its real value is behavioral. Seeing years of spending set aside can make it easier to leave stocks alone in a crash. The band in the calculator tests the blended allocation, which is what the market sees.

Assumptions

The band runs 1,000 paths for 30 years with spending rising 2.5% a year. It uses long-run nominal assumptions for the blend: cash 3.0%, bonds 4.5% with 6% volatility, stocks 7.0% with 17% volatility, and a stock-bond correlation of 0.1. It does not model a particular refill rule. Not financial advice.

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Frequently asked questions

What is the bucket strategy in retirement?

Splitting a retirement portfolio by when you will spend it: one to three years of spending in cash, several more years in bonds, and the rest in stocks. You spend from cash and refill it from the other buckets.

How many years of cash should I keep in retirement?

Most bucket plans hold one to three years of the spending the portfolio has to cover, after Social Security and pensions. More cash means less to sell in a downturn, but a lower long-run return.

Is the bucket strategy better than a fixed allocation?

The buckets add up to an ordinary stock and bond mix, and that mix sets the returns. The value of buckets is behavioral: seeing years of spending set aside can make it easier not to sell stocks in a crash.

How do you refill the buckets?

A common rule refills cash from bonds each year and bonds from stocks only after a year when stocks gained. Without a rule like that, a long bear market can empty the bond bucket and force stock sales anyway.

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