Two Bucket Strategy | RetirePeace
Calculator Guide
Calculators
Home FIRE Calculator Investment Growth Retirement Planner Advanced SWPFeatured 2-Bucket Strategy
Read
Learning Centre Frequently asked questions Calculator Guide
Two buckets · Auto-refill

2-Bucket Strategy Calculator

Split your corpus into an income bucket you spend from and a growth bucket that refills it automatically, with the full year-by-year working below.

See how this calculation works

RETIREPEACE METHOD Built on the RetirePeace Methodology: transparent, year-by-year modelling with inflation, retirement events, one-time withdrawals and evolving income.
Your plan
i
{{ f.desc }}
{{ sym }} {{ f.suffix }} {{ f.abbr }}
i
{{ sym }} {{ bkB1AllocField.suffix }}
Total corpus{{ bkTotalAbbr }}
{{ bkB1Abbr }}({{ bkB1Pct }}%)
{{ bkB2Abbr }}({{ bkB2Pct }}%)
Bucket 1 · IncomeBucket 2 · Growth
Assumptions
i
{{ f.suffix }}
Automatic refilli
Measured in years of planned withdrawals.
Plan durationi
{{ bk.durDesc }}
yrs
Your results
{{ bkRes.headLabel }}
{{ bkRes.headValue }}
{{ bkRes.headSub }}
{{ ft.label }}
{{ ft.value }}
{{ ft.sub }}
{{ bkRes.footnote }}
One-time withdrawals draw from Bucket 1 first, then Bucket 2. Withdrawal adjustments change the recurring income exactly as in the Withdrawal Plan.
No retirement events yet
Examples
▲Increase withdrawal by 10%
●Buy a car
●Medical expense
●Education
{{ ev.glyph }}
{{ ev.title }}
{{ ev.sub }}

Year-by-year working

Every row is a direct calculation. Withdrawals come from Bucket 1, both buckets earn their own return, then Bucket 2 refills Bucket 1 when it drops below the trigger.

{{ bkTableCount }}
▲Increase ▼Decrease ●One-time withdrawal ⇄Bucket transfer
Year Open B1 Open B2 Total Annual W/D W/D % Transfer Return Close B1 Close B2 Close Total
{{ r.yearRel }}
{{ r.yearCal }}
 {{ r.eventMark }} {{ r.openingB1 }} {{ r.openingB2 }} {{ r.openingTotal }} ●{{ r.annual }} {{ r.wdPct }} {{ r.transfer }} {{ r.interest }} {{ r.closingB1 }} {{ r.closingB2 }} {{ r.closingTotal }}
⚡ Changes This Year
{{ c.glyph }}{{ c.text }}

How the two-bucket strategy works

{{ s.n }}
{{ s.title }}
{{ s.body }}

Add retirement event

Event type
Trigger
yr
Adjust withdrawal by (use − to decrease)
%
e.g. +10 raises the monthly withdrawal, −4 reduces it.
Enter a non-zero percentage.
Amount (from Bucket 1, then Bucket 2)
{{ sym }}
Notes (optional)

Understanding the 2-Bucket Strategy Calculator

The two-bucket approach splits a retirement corpus into a near-term income bucket and a longer-term growth bucket. Income is drawn from the first bucket, and the second bucket is used to refill it. The aim is to avoid selling growth assets at a bad moment simply because income is due.

This calculator models that structure year by year, including the automatic refill, so you can compare it against drawing everything from a single pot in the SWP calculator.

What each input means

Total corpus and Bucket 1 allocation
How much you start with, and how much of it sits in the income bucket. The remainder becomes the growth bucket.
Bucket 1 return
The return on the income bucket. This is normally set lower, reflecting safer, more accessible holdings.
Bucket 2 return
The return on the growth bucket, normally set higher, reflecting a longer holding period.
Monthly withdrawal and withdrawal growth
The income taken each year and how fast it rises, matching the SWP model.
Refill trigger and refill target
The trigger is how few years of withdrawals Bucket 1 may fall to before it is topped up. The target is how many years of withdrawals it is refilled back to.
Plan duration and retirement events
The horizon in years or calendar years, plus optional one-time withdrawals or permanent income changes.

How to read your result

Total remaining corpus
The combined closing balance of both buckets at the end of the plan.
Bucket 1 and Bucket 2 balances
Shown separately, so you can see whether the growth bucket was able to keep the income bucket supplied.
Year-by-year table
Opening balances, withdrawal, transfers between buckets, returns and closing balances for each year.

The maths behind it

Each year the inflation-adjusted income is withdrawn from Bucket 1. Any one-time withdrawals are taken from Bucket 1 as well, with any shortfall pulled from Bucket 2. Each bucket then grows at its own return, independently. Finally, if Bucket 1 has fallen below the refill trigger, money is transferred from Bucket 2 until Bucket 1 reaches the refill target or Bucket 2 is exhausted. The closing balances become the next year’s opening balances. As in the SWP calculator, the withdrawal is taken before the return is applied, and the table starts at year 0, so a 30-year plan shows rows for years 0 to 30. Both choices make the projection slightly more conservative and are documented in How RetirePeace calculates.

Assumptions and limitations

  • Every projection applies a single fixed return to each year. Real markets rise and fall, so a portfolio that averages the same return can still finish somewhere quite different, especially once withdrawals begin and a poor run arrives early.
  • Tax, platform fees, fund charges and transaction costs are not modelled. A real-world net outcome will be lower than a gross projection.
  • Returns and inflation are assumptions you choose, not forecasts. The output is only ever as reliable as the numbers you put in.
  • Figures are shown in the currency you select. No exchange-rate movement is modelled.
  • This is general educational information to help you understand your own numbers, not personalised financial advice.

Related calculators

Learn the concepts behind this calculator

The full Retirement Learning Centre covers withdrawals, inflation, FIRE and drawdown strategy, and how RetirePeace calculates documents every modelling convention used on this page.

More questions about assumptions, withdrawals and how these projections work are answered in the retirement planning FAQ.

The calculations provided by RetirePeace are intended for educational and planning purposes only. Investment returns, inflation, and future market conditions are uncertain. Actual outcomes may differ. This is not financial, investment, tax, or legal advice.