Strategies to Protect Your Assets for a Low-Stress Retirement | The Informed Investor 44

Episode 44: Are you confused about how to meet saving and spending goals at the same time? Conflicts between these objectives may seem daunting as you plan for retirement. If you spend more now while saving less, your financial future may look questionable. If you spend less now to save more for the future, today may seem bleaker than it needs to be. Enter the Bucket Plan. Devised by Jason Smith, the founder of Prosperity Capital Advisors and C2P Enterprises, the Bucket Plan splits wealth management into three buckets—Now, Soon, and Later—based on one’s investment time horizon, volatility tolerance, and income requirements. The Now bucket is for safe and liquid assets that can help meet immediate spending needs and, say, build an emergency fund. The Soon bucket is for preserving wealth with conservative investments that will be needed sooner rather than later but not tomorrow. The Later bucket is for long-term growth and legacy planning. It’s a system capable of handling financial planning for people at all different stages of life. Each bucket has a purpose and seeks to reduce risks so that investors avoid bad decisions that could hurt their long-term plan. How you use this system will depend on where you are in the “money cycle”—the accumulation, preservation, or distribution phases of life. In Episode 44 of The Informed Investor, Dimensional’s Mark Gochnour, Head of Global Client Services, and Jason Smith, a financial professional with more than 30 years of experience, explore how investors can execute their own Bucket Plan as they pursue short- and long-term financial goals. TIME STAMPS 00:00 Intro 02:50 Headlines 03:23 The Bucket Plan 04:44 Now, Soon, Later buckets 07:24 Taxes and legacy planning 09:07 Holistic wealth management 12:33 What’s in the Now bucket? 16:44 How many years’ worth of cash do you need in the Now bucket? 18:26 Why you need a Soon bucket 20:37 What is the Money Cycle? 23:25 Life insurance 29:38 Tax impact of pre-tax retirement s