Bucket Strategy Calculator
Allocate savings across short, medium, and long-term buckets.
Split a portfolio into near-term cash, medium-term bonds, and long-term growth buckets based on target allocations. Educational tool, no signup required.
What this tool does
Enter total portfolio and target percentages for cash, bonds, and growth. The tool shows the amount per bucket and years of spending each covers.
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Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Bucket strategy is a drawdown approach that separates money by time horizon. Cash bucket covers 1-2 years of spending. Bond bucket covers 3-10 years. Growth bucket is everything else and funds the long term. The goal is to avoid selling growth assets in a downturn when cash is available instead. A 500,000 portfolio with 40,000 annual spending, split 10/30/60, gives 1.25 years of cash, 3.75 years of bonds, and 7.5 years of growth assets by spending count — roughly 12 years of total cushion.
Quick example
With portfolio total of 500,000 and annual spending of 40,000 (plus cash bucket of 10% and bond bucket of 30%), the result is 12.5 years. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.
Which inputs matter most
You enter Portfolio Total, Annual Spending, Cash Bucket %, and Bond Bucket %. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.
What's happening under the hood
Apply percentages to portfolio total to get each bucket. Divide each bucket by annual spending to show years-of-runway per bucket. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.
How to use this beyond the first run
Re-run the calculation once a year. Life changes — pay rises, new expenses, interest-rate shifts — and the figure that looked right 12 months ago often isn't today. Annual recalibration keeps the plan honest.
What this doesn't capture
The calculation assumes a steady savings rate and a stable interest rate. Real saving journeys include emergencies, windfalls, and rate changes — especially in easy-access products. The figure is a direction of travel, not a guarantee.
Bucket strategy produces a per-bucket allocation based on the inputs provided.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Apply percentages to portfolio total to get each bucket. Divide each bucket by annual spending to show years-of-runway per bucket.
References
Frequently Asked Questions
Typical split?
When do I rebalance?
Does this replace the 4% rule?
What about inflation?
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