The three-bucket approach animation

Written and accurate as at: 12 August 2020

When devising an appropriate retirement plan, important consideration is given to mitigating certain retirement-related risks, and providing for your lifestyle needs and wants throughout your retirement years. Importantly, there can be several strategies employed in this regard.

One such strategy is the three-bucket approach, which involves constructing an investment portfolio with short, medium, and long-term buckets. These buckets aim to leverage the relationship between risk versus return (pegged to your specific time-frames and cash flow requirements) while still applying the principle of diversification and risk profiling.

This animation illustrates the three-bucket approach in further detail. Please note: This strategy may or may not be appropriate for you. Importantly, we can help devise an appropriate plan based on your financial situation, goals and objectives.