Retirees or those close to retirement face the challenge of managing their savings for their lifetime, no longer having the luxury of building up their savings, and instead, need to withdraw from their corpus. They cannot afford substantial erosion of their corpus as it must cover their expenses. On the other hand, keeping a large portion of their savings in cash or cash equivalents may limit its longevity.
Here's a well-thought-out bucket strategy—segmenting retirement savings into multiple buckets designed for specific time periods and risk levels—can provide growth potential and stability during retirement.
Basics of bucket strategy: Retirees' assets are divided into three buckets: short-term, medium-term, and long-term. Each bucket has its own purpose, time horizon, and risk level.
Bucket 1: Short-term needs (0-2 years)
This is the most conservative bucket, covering immediate and unforeseen expenses in the first two to three years of retirement. Assets in this bucket are kept in cash or cash equivalents, such as savings accounts, money market funds, or short-term bonds. These low-risk investments provide high liquidity, ensuring that retirees have quick access to funds when needed.
Bucket 2: Medium-term (3-10 years)
Denne historien er fra November 13, 2024-utgaven av Mint Mumbai.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra November 13, 2024-utgaven av Mint Mumbai.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
World Bank calls for reforming skills training in India
India must make a coordinated effort to reform and rebrand vocational skill training, besides aligning education with the job market, to leverage its demographic advantage to meet the $5-trillion target for its economy, the World Bank said.
FCPA cases take long to conclude after indictment
For investors keen to know the fate of billionaire Gautam Adani's indictment by US authorities, the watchword is patience.
Short-covering, relief rally add ₹7.27 trillion wealth
Markets up 2.39% to hit the highest in six months, a day after Adani's indictment
Wetter monsoon slows pace of adding new transmission lines
India's addition of new power transmission lines fell by half over a year earlier in the April-October period as a wetter-than-usual monsoon slowed work.
COP29's $1.3 tn fund plan disappoints Global South
The 29th edition of the UN climate change conference in Azerbaijan emerged from a deadlock with an annual climate finance goal of $1.3 trillion for developing countries, much to the disappointment of the Global South.
Jaguar rebrand is pink, diverse and doesn't feature any cars
Luxury automaker Jaguar is betting that a colorful and youthful rebrand will help it successfully launch fully into the electric-cars market.
Services up as manufacturing slows in Nov
The HSBC Flash India Services PMI was at 59.2 in Nov from 58.5 in Oct; manufacturing PMI fell slightly from 60.4 to 60.2
MSMED may protect medium firms too
The Centre may consider including medium enterprises for the protection granted under MSME Development (MSMED) Act, 2006, to resolve payment disputes.
Europe boosts Indian textile exports in FY25
Demand for Indian handloom, apparel partly fuelled by Bangladesh crisis
RBI nudges banks to cut speculative bet in rupee
The Indian central bank, in a rare move, instructed some banks to cut their long positions on the dollar-rupee pair on Friday, seeking to curb speculative positions with the currency at a record low, four bankers familiar with the development told Reuters.
