The Bucket Plan® Holistic Wealth Management Process

A strategic, structured approach to bucketing assets for today’s financial challenges

People often approach retirement with a simple strategy: Keep some money at the bank and invest the rest, hoping it lasts. But today’s retirees face a more complex set of challenges: market volatility, interest rate risk, and sequence of returns risk, among others. A more sophisticated planning philosophy is required to stretch retirement assets across a lifetime of needs. That philosophy is The Bucket Plan®.

What Is The Bucket Plan®?

The Bucket Plan® is a holistic financial planning process developed by Jason L Smith, CFP®, CEP®, BPC, Prosperity Capital Advisors’ Chief Visionary, Executive Chairman, and Founder. Rather than treating your assets as a single undifferentiated pool, The Bucket Plan® segments your money into three distinct buckets based on your investment time horizon, volatility tolerance, and income needs. Each bucket has a defined purpose, ensuring that every dollar in your plan is working toward a specific goal and that short-term needs never force you to make long-term mistakes.

The Three Buckets

The Now Bucket

The Now Bucket holds your safe, liquid money: the funds you need access to immediately and in the near term. Typically kept in a bank checking, savings, or money market account, this bucket serves three primary purposes: your emergency fund, planned expenses in the early years of retirement, and income for your first year of retirement. Because accessibility is the priority here, this bucket is not designed for growth. The goals are stability and liquidity, not returns.

The Soon Bucket

The Soon Bucket is designed to fund the first phase of your retirement, generally covering a 10-year window. It holds the money you will need sooner rather than later, invested conservatively enough to protect against significant market swings but with an inflationary hedge built in to help your income keep pace with rising costs. This bucket covers living expenses, healthcare, insurance, and other near-term priorities. Because you have already secured the Now Bucket, you are not forced to draw from the Soon Bucket at a market low.

The Later Bucket

The Later Bucket is your long-term growth engine. Because the Now and Soon Buckets have purchased you a time horizon, the Later Bucket can be invested more aggressively in growth-oriented assets. This is the money you will not need for at least 10 years, and it is designed to grow over time, replenish the Soon Bucket as it is drawn down, and ultimately support your legacy goals. Long-term care, estate planning, and wealth transfer strategies are all housed here.

Understanding The Money Cycle

The Bucket Plan® is built on an understanding of the Money Cycle: the three phases every person moves through during their financial life. The accumulation phase is when you are building wealth. The preservation phase is when you are protecting what you have built. The distribution phase is when you are drawing on your assets to fund your life in retirement. Understanding where you are in the Money Cycle is essential to knowing how your buckets should be structured.

The Bucket Plan® Book

The philosophy behind our process is documented in The Bucket Plan®: Protecting and Growing Your Assets for a Worry-Free Retirement, authored by Jason L Smith. It is a practical guide to the three-bucket approach and the planning process our advisors use with our clients every day.

The book has earned wide recognition as a definitive resource in retirement planning:

  • Named a Top 10 Best Retirement Planning Book for 2023 by U.S. News & World Report — the only book in that top 10 that describes a complete financial planning process
  • Named one of the 15 Best Books for Retirement Planning in 2024 by Entrepreneur.com

Comparative assessments and other editorial opinions are those of U.S. News and have not been previously reviewed, approved, or endorsed by any other entities. Jason L Smith and/or Prosperity Capital Advisors did not pay for this recognition or to be part of the assessment.

See How The Bucket Plan® Can Be Your Complete Financial Guide

The Bucket Plan® is the foundation on which every other element of your holistic financial plan is built. Asset allocation, tax management, protection planning, and legacy planning all operate within the bucket framework. When your advisor designs your plan, The Bucket Plan® is the organizing structure that helps ensure every recommendation connects back to your goals, your timeline, and your life.

Frequently Asked Questions about The Bucket Plan®

The Bucket Plan® is a time-segmented approach designed to help manage your assets for immediate, near-term, and long-term needs. Below are answers to some of the most common questions about how it works and how it applies to your retirement goals.

What is The Bucket Plan®, and how does it work?

The Bucket Plan® is a structured financial planning methodology that divides your assets into three buckets — Now, Soon, and Later — each corresponding to a different time horizon and purpose. The Now Bucket holds safe, liquid funds for immediate needs. The Soon Bucket covers the first decade of retirement with conservative, inflation-aware investments. The Later Bucket is invested for long-term growth and eventually replenishes the earlier buckets as they are drawn down. Together, the three buckets ensure that every dollar has a defined role and that your short-term needs are never dependent on the performance of long-term investments.

One of the most significant risks in retirement is being forced to sell investments at a loss to meet living expenses, a problem known as sequence of returns risk. The Bucket Plan® addresses this directly. Because your near-term income needs are covered by the Now and Soon Buckets, the money in your Later Bucket is insulated from short-term market swings. You are never in a position where a market downturn forces you to liquidate long-term investments ahead of schedule.

The Bucket Plan® is most relevant for people who are approaching retirement or already in it, but the underlying philosophy applies at any stage of the financial planning process. If you are in the accumulation phase, understanding how your assets will eventually need to be structured gives your savings strategy greater purpose and direction. If you are in or near the distribution phase, The Bucket Plan® provides a practical framework for generating reliable income while continuing to grow your wealth over the long term.

The Bucket Plan® is the organizing framework for everything else. At Prosperity Capital Advisors, all five pillars of your holistic financial plan — financial planning, asset management, tax management, protection planning, and legacy planning — are built within the context of your bucket structure. Your investments are positioned by bucket. Your tax strategy accounts for how and when you draw from each bucket. Your protection and legacy planning address the Later Bucket’s long-term role. Nothing exists in isolation.

Tax efficiency is built into The Bucket Plan® process from the start. Because different buckets hold different types of accounts — taxable, tax-deferred, and tax-free — your advisor can sequence withdrawals strategically to manage your tax burden throughout retirement. Decisions about Roth conversions, Social Security timing, and charitable giving strategies are all made within the context of how they interact with your bucket structure and your overall tax picture.

The best first step is a conversation with a Prosperity Capital Advisors advisor. They will walk you through a discovery process to understand your current financial picture, identify where you are in the Money Cycle, and begin designing a bucket structure tailored to your income needs, time horizon, and goals. There is no obligation and no generic model. Every Bucket Plan® is built around the specific person in front of us.

Start Building Your Bucket Plan

Whether you are years from retirement or already in it, now is the right time to structure your assets with purpose. At Prosperity Capital Advisors, we’ll walk you through The Bucket Plan® process and build a strategy tailored to your income needs, time horizon, and goals.