The Safe Bucket Implementation Guide: From Theory to Practice

Published August 17, 2025 | By Jeremiah Nolen, CRPC®

Over the past week, we've released three crucial episodes in our Safe Bucket Blueprint™ series:

• Episode 4: Building Your Safe Bucket
• Episode 5: Sequence of Returns Risk Solved
• Episode 6: Flip the Switch - Accumulation to Decumulation

Together, these episodes provide a complete framework for implementing the Safe Bucket Blueprint™ in your retirement planning.

Building Your Safe Bucket: The Foundation

The Safe Bucket isn't just another allocation strategy - it's your retirement's foundation.

The Income Floor Concept

Your income floor represents the minimum monthly income needed to cover essential expenses:

• Housing (mortgage, taxes, insurance, maintenance)
• Healthcare (premiums, medications, treatments)
• Food and basic necessities
• Transportation
• Insurance premiums
• Basic utilities

Real Client Example

The Situation:

• Couple, ages 62 and 60
• $800,000 in retirement savings
• Lost $240,000 in 18 months (2022-2023)
• Traditional 60/40 portfolio

The Problem: Their advisor's "stay the course" advice ignored a critical reality: you can't eat long-term averages. When markets crash and you need income, you're forced to sell at the worst possible time.

The Safe Bucket Solution:

1. Calculated essential expenses: $3,000/month
2. Identified guaranteed income: $2,000/month (Social Security)
3. Income gap: $1,000/month
4. Safe Bucket allocation: $450,000 to guaranteed sources
5. Result: $3,000/month for life, regardless of markets

Implementation Steps

Step 1: Calculate Your Income Floor

Monthly Essential Expenses:

• Housing:           $__________
• Healthcare:       $__________
• Food:                $__________
• Transportation: $__________
• Insurance:        $__________
• Utilities:            $__________

Total: $____________________

Step 2: Identify Guaranteed Income

• Social Security:      $__________
• Pensions:               $__________
• Existing Annuities:  $__________
• Other Guaranteed: $__________

TOTAL: $_____________________

Step 3: Determine Your Gap

Income Floor Needed - Guaranteed Income = GAP

$__________ - $__________ = $_____________

Step 4: Build Your Safe Bucket Use the gap to determine how much to allocate to guaranteed income sources.

Sequence of Returns Risk: The Hidden Destroyer

Sequence of returns risk is the retirement killer nobody talks about - until it's too late.

The Mathematics of Destruction

Two retirees with identical portfolios and identical average returns can have completely opposite outcomes based solely on the ORDER of returns.

The Brutal Reality:

• Lose 20% while withdrawing 4% = Need 31% gain to break even
• Lose 30% while withdrawing 4% = Need 47% gain to recover
• Experience this early in retirement = Permanent damage

The Retirement Red Zone

The most dangerous decade of your financial life:

• 5 years before retirement
• 5 years after retirement

Bad returns during this period can destroy your entire retirement plan, regardless of long-term market performance.

Safe Bucket Protection

The Safe Bucket Blueprint™ eliminates sequence risk by:

1. Protecting essential income from market volatility
2. Allowing growth investments to recover without withdrawal pressure
3. Creating systematic rebalancing opportunities
4. Providing behavioral guardrails during market stress

2022 Case Study:

• Traditional portfolios: Down 20-30% with forced withdrawals
• Safe Bucket clients: Income continued uninterrupted
• Recovery position: Optimal for market rebound

The Psychological Transition: From Saver to Spender

The final piece of the puzzle isn't financial - it's psychological.

The Saver's Paralysis

After 40 years of accumulation, your brain doesn't automatically switch to distribution mode:

Common Symptoms:

• Obsessive account checking
• Guilt over normal spending
• Postponing dreams despite having resources
• Living below means unnecessarily
• Anxiety about outliving money (even with adequate savings)

The Permission Structure

The Safe Bucket Blueprint™ creates psychological permission through structure:

Safe Bucket = Core Permission "My essentials are guaranteed. I can't run out."

Freedom Bucket = Flexibility Permission "This money exists to be spent. That's its purpose."

Growth Bucket = Legacy Permission "I'm still building for the future. The mission continues."

Real Transformation

Client Story: Margaret, 67, retired teacher with $950,000 saved

Before Safe Bucket:

• Checked accounts multiple times daily
• Felt guilty about grocery purchases
• Hadn't traveled in 5 years
• Lost sleep over financial anxiety

After Safe Bucket:

• Reviews statements monthly
• Shops without guilt
• Booked Mediterranean cruise
• Sleeps soundly

"For the first time in my life, I have permission to enjoy what I've built."

Putting It All Together

The Safe Bucket Blueprint™ isn't just three separate concepts - it's an integrated system:

1. Build Your Safe Bucket (Foundation)
2. Protect Against Sequence Risk (Security)
3. Create Permission Structure (Freedom)

Together, these elements transform retirement from a source of anxiety to a phase of life you can actually enjoy.

Action Steps

Immediate (This Week):

1. Calculate your income floor
2. Inventory guaranteed income sources
3. Identify your income gap
4. Assess your sequence risk exposure

Short-term (Next 30 Days):

1. Research Safe Bucket funding options
2. Evaluate annuity and bond ladder strategies
3. Review Social Security optimization
4. Consider professional guidance

Long-term (Next 90 Days):

1. Implement Safe Bucket allocation
2. Restructure portfolios for protection
3. Create spending permission framework
4. Monitor and adjust as needed

The Bottom Line

You can't retire with a portfolio. You need a paycheck.

The Safe Bucket Blueprint™ provides that paycheck while protecting against the mathematical and psychological challenges of retirement.

Stop hoping your money lasts. Start engineering guaranteed outcomes.

Ready to implement the Safe Bucket Blueprint™ for your specific situation? Schedule a complimentary consultation to explore how systematic income planning can transform your retirement security.

SCHEDULE CONSULTATION

Jeremiah Nolen, CRPC® is the founder of Next Phase Advisors and author of "Retire with a Paycheck: Think Like a Pension Manager, Not a Day Trader." Watch the complete Safe Bucket Blueprint™ video series on our YouTube channel.