Buckets of Money Strategy

[AlanS]

I recently read the book Buckets of Money by Ray Lucia and wondered what some of the forum members think of his approach to retirement withdrawals. He suggests that at the beginning of retirement you create 3 buckets from your funds available for investment. The first is to cover expenses for the first 7 years of retirement he recommends things such as immediate annuities or laddered CDs. The second bucket is for the time frame of 7 to 14 years and contains income-generating vehicles such as fixed annuities and bonds. The third bucket contains stocks and other long-term growth vehicles. The idea is to live off the safe income from bucket 1 for 7 years, then convert bucket 2 to bucket 1 for the second 7 years and after 14 years start all over using the growth from bucket 3. Assuming that your initial funds are sufficient to put quite a bit into bucket 3, it sounds like a reasonable approach. Any thoughts?

Thanks,
Alan