At NewMaker Financial, we know that our clients’ primary concern with the future surrounds the concept of “Where is my money going to come from?” or “How will my cash flow work?” We know how important it is to have an income stream that is going to suit your lifestyle as well as sustain you for the future. The issue with traditional portfolio models is that they tend to be too simple to fully accommodate your vision. Boilerplate solutions generally do not provide independence, Therefore, our method for retirement income planning — simultaneously accessible and sophisticated — is known as a “Buckets” or “Time Segmentation” strategy.

The Buckets strategy is, at its core, an income strategy. It uses time-segmented “mini” portfolios to designate the right level of risk-to-reward ratio with the appropriate future timeframe. In other words, your portfolio will be split into 3 main segments – short, intermediate, and long term. The longer the time frame, the more aggressive and growth-oriented the investment. Conversely, the sooner you need the money (short-term bucket), typically the more conservative investment.

How does the income work? You’ll have a combination of pension, social security, dividends, and interest to satisfy your spending needs. Anything beyond that will be covered by your short-term bucket, which is intentionally designed to be safe, liquid, and available. Over time, your short term bucket will be replenished by the more moderate, intermediate term bucket, which in turn will be replenished by the more growth-oriented, long term bucket.

As your advisor, it’s our job to ensure we keep your Buckets balanced, and that means keeping to the age-old investment adage of “buy low, sell high!” When your growth bucket experiences a good year, we harvest gains and use those funds to replenish your conservative bucket. Therefore, we are constantly refilling your short-term “spending” bucket with the goal of organically creating an increasingly more conservative portfolio over time.