Mike and Lori weren’t sure if their current investments would be enough to fund the dream retirement they were hoping for in 10-years.
The 2008 Market Correction had hit their overall financial portfolio hard. While their investment accounts had gradually regained value, Lori expressed concern that if anything similar might happen again before or during their retirement, it could prove quite disruptive to their lifestyle. At the same time, Mike was concerned they hadn’t saved enough. So they decided to seek advice.
An Investment Strategy That Made Everyone Happy
They came to Buttonwood, wanting safety and growth over the next 10-years, which at first seemed conflicting. But their goal was clear for us: We needed to implement a combined cash-flow, tax, insurance and investment strategy that would have the flexibility to absorb market risk. Our answer: The Bucket Approach.
The Bucket Approach
Bucket #1 contained safe Investments. This is the bucket that provided ongoing cash-flow in retirement. Subsequent buckets incrementally increased risk and housed growth investments focused on the creation of future income. This risk management strategy allowed us to control potential downside while maintaining the ability to grow assets over time.
Because Mike and Lori had a decade until retirement and their current cash flow was adequate, we de-emphasized the first bucket and allocated more of their investments to the other buckets. As they come closer to retirement, we will accelerate the first bucket by shifting some of their higher-risk investments into more conservative options.
To discuss more in depth our Bucket Approach, give us a call at: (816) 285-9000.