Bucket Strategy for Withdrawal Sequencing

The bucket strategy for withdrawal sequencing divides your retirement savings into three tiers: short-term cash for 1-2 years of expenses, medium-term bonds for 3-5 years, and long-term equities for growth. This design ensures you never sell stocks during a market downturn, preserving your portfolio value. In a typical bear market, this approach reduces sequence-of-returns risk by about 40% compared to a single-bucket allocation, beating #5's HSA strategy for income reliability even though it lacks tax advantages.