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OK, bucketeers. If you follow any flavor of a 3-bucket Lucia-like plan I have two questions I have not quite figured out:
1. Would you consider TIPS as a bucket 1 or bucket 2 type asset? It has qualities of both to me; some volatility but locked in income potential regardless of inflation, etc.
2. Same question for Wellesley-like funds; it's a hybrid/balanced fundthat I'm perceiving as a B2 investment, yet like many such funds it has up to 40% real stocks so part of it is a bucket 3 investment. Since the stocks are dividend-producing I am keeping it all in B2 rather than slicing it up. Agree?
The more I play with the concept the more I like 3 buckets. I was hung up on the idea of sequentially depleting B1 then B2, but now that I'm seeing B2 as a more flexible "money sink" or buffer, it seems to work out well for me. I'm also simplifying greatly in my Bucket 3 and it's starting to feel quite comfortabe.
I see no magic in buckets but it keeps me thinking clearly as to asset allocation with a nice peace-of-mind bonus.
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Rich
Tampa, FL (ESR-bound. Really. I mean it. Seriously.)
As if you didn't know..If the above message happens to contain medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any medical purpose whatsoever. Consult your own doctor for all medical advice.
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