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A Conservative Retirement Portfolio in 3 Buckets

Christine Benz (christine.benz@morningstar.com)

Many retired investors are comfortable embracing a healthy equity stake in their portfolios. This Conservative Bucket Portfolio has a more modest goal: preserving purchasing power and delivering living expenses for the retiree who has an approximately 15-year time horizon (that is, life expectancy). To construct a Bucket portfolio, the retiree starts with anticipated income needs for a given year, then subtracts certain sources of income such as Social Security and a pension.