How Has the Retirement Bucket Strategy Performed?
A lean 2015 illustrates the merits of employing a short-term bucket alongside a long-term portfolio.
The drought continues for investors aiming to wring any type of yield from high-quality bonds, not to mention cash.
Although the Federal Reserve raised short-term interest rates by 0.25% in 2015--and is likely to do so at least two more times in 2016--that was a drop in the bucket. Cash yields remain stubbornly close to zero, and high-quality bond yields are just about 2%-3%--hardly a subsistence level for most retirees.
Christine Benz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.