Confidently Withdraw From
Your Retirement Bucket

Good Morning Relaxing Retirement Subscriber,

One of the questions I hear all the time is, is this a good time to be withdrawing money?”

The hidden assumption behind this question is that there are good and bad times to withdraw money from your Retirement Bucket.

The reality is if you have your strategy correct, there is no good or bad time. And, this is precisely what Principle and Guideline #3 is all about.

Over the last few weeks, we’ve dissected The Relaxing Retirement Formula, and most recently began to answer the final question which is where do you position your Retirement Bucket to generate the long term rate of return you need to earn while experiencing acceptable levels of volatility and paying less taxes to the government?

Principle and Guideline #1 was knowing what NOT to invest, i.e. the amount you will be spending in the short run, and getting comfortable with the idea that not every dollar you have should be invested to earn top returns.

Principle and Guideline #2 was developing your answer to THE question: Once you have set aside funds to support multiple years of your anticipated future withdrawals in money markets and short term instruments, what percentage of your Retirement Bucket will you invest in ownership shares of quality companies (equities) vs. fixed income investments (bonds, money markets, CDs, and fixed annuities)? And, then, more specifically, what percentage of the equity holdings in your Retirement Bucket do you need to subject to different asset classes?

Now that we’re comfortable with the first two, let’s jump into Principle and Guideline #3 which pulls #1 and #2 together:

Don’t Get Spooked Into Selling Your Equities During a Correction! When You Withdraw From Your Retirement Bucket™ to Support Your Spending Needs, Tap The Money Market Funds You’ve Already Set Aside Instead of Having To Sell Equities If Markets Are Experiencing a Normal, Customary, (and Temporary) Correction.

The first point I’d like to convey is that this will not work for you unless you’ve carefully followed each step in The Relaxing Retirement Formula so far.

It will seem foreign and counterintuitive to you.

However, if you have, then you already know the amount of money you need to withdraw from your Retirement Bucket each year, and you’ve plotted out the amount you’ll need to withdraw over the next 5 years (at least).

If you’ve done this, and you’ve applied Principles #1 and #2, then you can confidently invest the rest in order to capture the long term returns you need to earn.


What makes us fear a down market is being forced to sell at the wrong time, i.e. when the price of your equity holdings are down.

This is why I receive the question, is this a good time to be withdrawing money?”

The answer to the question is always YES!

If you follow this principle, and you carefully allocate money in short term instruments to support your withdrawal needs, you can confidently invest the rest like a pro knowing that you won’t be forced to sell equity investments to support your income needs when market prices are experiencing a correction.

You will already have the amount of money you need set aside.

On the flip side, if equity prices are up, trim back your holdings to your prescribed mix while freeing up the necessary liquidity to support your withdrawals.

What this allows you to do is confidently spend what you want, and what you planned for while you allow your inflation fighting equity investments to do their job in the long run.

This is the key to successful investing during your retirement years.

Don’t underestimate just how important this is, especially when the overwhelming majority of retirees panic and feel as though they “have” to sell during normal market corrections like we experience every year.

Committed to Your Relaxing Retirement,

Jack Phelps

The Retirement Coach
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(The content of this letter does not constitute a tax opinion. Always consult with a competent tax professional service provider for advice on tax matters specific to your situation.)