The 3 Money Buckets



  • This is your safe and liquid money. People use it for short term needs and to pay bills
  • Typically bank accounts, checking accounts, savings accounts and money market accounts
  • They don’t pay a lot of interest, but that’s OK because their job is to be safe and liquid.


  • This is your Growth With Risk money.
  • This is mutual funds, stocks, variable annuities, bond funds, preferred stocks, ETFs, gold and things like that
  • They can go up in value and they can go down in value
  • Most IRA and 401k accounts are RED money because they have mutual funds in them


  • This is your Personal Pension money
  • GREEN accounts guarantee your income and guarantee your principal
  • These are usually annuity contracts issued by insurance companies.

At This Stage Of Your Life, What Percentage Do You Think You Should Have In Each Bucket?

Write down the percentages that you come up with on a piece of paper.

Then we will do the next step.

Here’s an example of how to figure out your “Current” 3 Money Bucket percentages.

Click on the image to make it bigger.Yellow Green Red ExampleHere’s blank copy of this worksheet that you can print…. 3 Buckets Of Money Worksheet

Why is this important?

Because just like a carpenter uses the right tool for the job, (hammer, drill, saw), it’s important to use the right Retirement Planning Tool to do the right job.

Anxiety and frustration happen when you are using an investment tool for a purpose it’s not designed for.

  • Use a checking account to pay bills, NOT for long term growth.
  • Use mutual funds and stocks for long term growth NOT for guaranteed retirement income
  • Use annuities for guaranteed retirement income NOT for trading and maximum growth potential


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