A retirement bucket plan separates money by when it may be needed. This planner offers two buckets by default: Cash and Growth. Switching to three adds Bonds between them. Other savings remain separate in either mode. These are the calculator’s automatic rules, not an exact implementation of a discretionary investment strategy.
Choose two or three pension buckets
Cash holds the selected years of planned pension-funded income. In three-bucket mode, Bonds cover additional years after Cash; Growth receives the remaining pension. The defaults are three Cash years and, when enabled, three additional Bond years. Annual return assumptions are 3% Cash, 4% Bonds and 7% Growth. These editable total-return illustrations include income retained or reinvested; do not add dividend yield on top.
A worked allocation example
Assume immediate retirement, a £500,000 pension, £4,000 monthly gross income, no lump sum, no inflation and no State Pension yet. Three Cash years require £144,000. With two buckets, Growth starts at £356,000. With three buckets and three Bond years, Bonds also starts at £144,000 and Growth at £212,000. Adding Bonds changes the investment mix; it does not create extra money.
Once a £12,000 annual State Pension starts, the pension-funded annual target becomes £36,000. With zero inflation and no State Pension increases, each three-year reserve target becomes £108,000. These are reserve targets, not guaranteed balances: withdrawals and investment returns still change the money available. Before State Pension age, both reserve targets use the full income requirement. They only deduct State Pension once the reserve review age reaches its start age.
With inflation enabled, Cash sums the upcoming selected years and Bonds sums the additional years after Cash. Their targets can differ even when the selected number of years is the same. Cash is allocated first, then Bonds, capped by the pension available. The planner flags reserve gaps rather than inventing funds.
Trace one year’s income
At a £48,000 annual target with £12,000 State Pension, £36,000 remains to fund. If £10,000 of Other savings is available and we ignore investment growth for this example, Other savings pays £10,000 and the pension supplies £26,000. Those pension withdrawals may come from different buckets depending on the year’s rules. Do not add Other savings to your pension balance as well.
In positive Growth years, surplus Cash helps pay income first, then Growth, with Cash and Bonds (if enabled) as fallback. In non-positive years, Cash is preferred, then Bonds if enabled, then Growth outside the protected crash/recovery period. State Pension and available Other savings are used before pension withdrawals.
Annual refills: where the money moves
After the final withdrawal of each retirement year, excess Cash above its upcoming target moves to Growth. In three-bucket mode, Bonds then tops up any Cash gap, even during a downturn; Bonds above its own target subsequently moves to Growth. After a positive Growth year outside scheduled crash/recovery years, Growth fills any remaining Cash gap and then the Bond gap. Two-bucket mode refills Cash directly from Growth when permitted.
For example, suppose Cash has £90,000 against a £108,000 target and Bonds has £130,000 against a £108,000 target. Bonds transfers £18,000 to Cash, leaving £112,000. Its remaining £4,000 surplus moves to Growth. The total pension is unchanged by both transfers. This example isolates the annual review after returns and spending have already happened.
A bond fund can fall in value. The automatic Bonds-to-Cash rule can therefore sell bonds after losses. This calculator does not decide whether such a sale is appropriate for an individual investor.
How this differs from Fritz Gilbert’s approach
Gilbert describes using Cash for spending, periodically reviewing refills and allowing Cash to decline when markets are poor. His sale decisions consider investments’ performance and overall allocation. This calculator instead uses average returns and automatic annual transfers. A positive Growth year permits refills outside the scheduled recovery year even if earlier losses have not been recovered. Read Gilbert’s own explanation for his approach. The projection is a planning illustration, not a forecast of those real-life decisions.
The optional seven-year stress cycle
- Years 1–5 use the normal Growth assumption.
- Year 6 replaces it with −30%.
- Year 7 replaces it with +3%.
- Year 8 restarts the cycle.
The cycle starts at current age, not retirement age. Cash and Bonds retain their own return assumptions. In crash and recovery years, pension withdrawals use Cash, then Bonds if enabled; Growth withdrawals and Growth-funded refills pause. Insufficient available reserves are shown as a shortfall even if Growth still has money.
A +3% gain does not repair a 30% loss: £100 becomes £70, then £72.10 before fees and cash flows. Real markets do not follow a predictable seven-year timetable. Compare the stress scenario with lower ordinary returns and a longer retirement; neither result establishes a probability of success.
Read the age slider and income summary
The slider starts at current age. Balances are measured at birthdays; income normally covers the following year. At the final age, the last year’s payments remain visible. Monthly and quarterly figures are the annual amounts divided by 12 and 4, not a quarterly dealing schedule. The projection applies returns and withdrawals monthly and does not calculate dealing-fee savings.
Other savings arrive once at the selected age, earn their own assumed return and carry forward until spent. A future property sale or inheritance is uncertain: test a delayed receipt or no receipt. The yearly table separates growth, withdrawals and transfers so you can trace the results.
Limits and checks before using a result
The income target is before tax. The separate take-home summary estimates tax using its stated tax-year rules, held fixed throughout the projection. Eligible tax-free pension withdrawals and any selected retirement lump sum are modelled subject to the planner’s assumptions. Pension access, contribution limits, individual protections, mixed starting pension eligibility and trading costs are not fully assessed.
Use your own State Pension forecast and check the start age. Read MoneyHelper’s drawdown guidance. A model cannot establish investment suitability or guarantee that money will last.
Personal Fortune · Updated 8 October 2026. Our approach and corrections.
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