Calculator
Retirement bucket size calculator
Enter your spending, Social Security and how many years you’d like covered. We size your cash bucket and show how each bucket size held up in past markets.
4 years of withdrawals from savings, about 10% of your $2M. The other $1.8M stays invested for growth.
- Your bucket size
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What this means
A 4-year bucket at your spending holds about $200,000, counting only what Social Security doesn’t cover. Withdrawals come from the bucket, and it’s refilled from investments only after they recover to near their previous high, so a market drop doesn’t force you to sell low.
In past 30-year retirements, a 4-year bucket paid 83% of the withdrawals that followed a down year entirely from cash. Without a bucket, a typical retiree sold investments right after a down year about 8 times; with this bucket, about once. A 7-year bucket raises the cash share to 92%, but each extra year of cash also earns less than stocks over long periods.
No bucket covers every downturn: the longest slumps, like the 1930s and 1970s, outlasted even large buckets. The right size is a trade-off between peace of mind and growth. Many planners use 2 to 5 years, and pairing a bucket with guardrails covers the long slumps by spending a little less instead of holding more cash.
How the bucket strategy works
The bucket strategy splits savings in two. A safety bucket holds the next few years of withdrawals in cash and Treasury bonds (in our model, half Treasury bills and half 10-year Treasuries). A growth bucket holds everything else, mostly in stocks. You spend from the safety bucket and refill it from growth when markets are doing well.
The point is behavioral as much as financial: when stocks crash, your next few years of spending are already set aside, so you don’t have to sell investments at a loss to pay the bills.
Sizing it to what you actually withdraw
Size the bucket to withdrawals from savings, not total spending. If Social Security covers $30,000 of an $80,000 budget, the bucket only needs to cover $50,000 a year. And if Social Security starts in a couple of years, the bucket needs less for the years after it begins. The calculator handles both.
When to refill
In our model the bucket is refilled only when the growth bucket is within 5% of its previous high. After a crash, you live on the bucket while stocks recover. The chart above shows how often each bucket size got retirees through history without selling right after a down year.
Assumptions
- The bucket holds the next 4 years of withdrawals: spending minus Social Security.
- Bucket money is half Treasury bills and half 10-year Treasuries. The growth bucket is 80% S&P 500 and 20% Treasuries.
- The bucket is refilled only when investments are within 5% of their previous high. Results use every 30-year stretch since 1928.
New to a term? See the retirement income glossary.
Common questions
How many years should be in a retirement cash bucket?
Most planners suggest two to five years. In U.S. history, longer buckets reduced forced selling after down years, with smaller gains beyond about five years.
Does a bucket strategy reduce returns?
Cash and short-term bonds usually earn less than stocks, so a large bucket can drag on long-run growth. The trade-off is avoiding forced sales in downturns.
Should the bucket be in cash or bonds?
Our model holds half in Treasury bills and half in 10-year Treasuries. Many retirees use high-yield savings, money market funds, CDs or short-term Treasury ladders.
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How we calculate this
We size the bucket from your next years of withdrawals, then run the two-bucket strategy through each 30-year stretch of history: withdraw from cash, refill from the growth bucket only near its high, and record every year after a stock decline in which a withdrawal had to come from investments.
Data: S&P 500 total returns, 10-year Treasury and 3-month Treasury bill returns as compiled by Aswath Damodaran (NYU Stern), and CPI-U inflation from the U.S. Bureau of Labor Statistics, 1928–2025 (2025 preliminary). Read the full methodology and limitations.