What is the 3-bucket retirement strategy?

The 3-bucket strategy divides retirement assets by time horizon: Bucket 1 holds 1-2 years of expenses in cash and short-term reserves, Bucket 2 holds 3-10 years in bonds and income-producing assets, and Bucket 3 holds the remainder in equities for long-term growth. The goal is to never sell growth assets at a loss during a market downturn.

How is sequence-of-returns risk different from average return?

Two retirees can experience the same average annual return over their retirement and end up with very different outcomes. A market crash in years 1-3 of retirement is significantly more damaging than the same crash in years 20-23, because withdrawals during a depressed portfolio remove shares that would have compounded.

Which withdrawal strategy is best?

There is no single best strategy — each trades off certainty, longevity, and flexibility. Fixed dollar provides predictability but ignores markets. Fixed percentage adapts to portfolio size but creates volatile income. Guardrails (Guyton-Klinger) adjust within thresholds. Floor + upside guarantees a baseline. RMD-based ties withdrawals to IRS life-expectancy tables. The comparator on this page shows the trade-offs side-by-side.

What is the withdrawal guardrail rule?

Guardrail (Guyton-Klinger) withdrawals start at a target rate (often 4-5%) and adjust based on portfolio performance. If the current withdrawal rate rises above an upper guardrail (e.g., 6%), spending is cut by 10%. If it drops below a lower guardrail (e.g., 4%), spending is raised by 10%. This dynamic approach has historically supported higher initial withdrawal rates than fixed strategies.

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No — the planner runs entirely on the inputs you set with the sliders. Creating a free Praxion account is optional and unlocks saving your scenario, year-by-year tax-aware projections, RMD pressure analysis, and AI-driven nudges as markets move.

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Retirement Income Planner

Build a 3-bucket strategy, compare six withdrawal policies, and stress-test your plan against the same crashes that hurt real retirees. Everything runs on your inputs — no signup, no email.

3-bucket strategyIncome waterfall6 withdrawal policiesMonte Carlo stressSequence-of-returns lab

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