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Investing Specialists

How Has the Retirement Bucket Strategy Performed?

A lean 2015 illustrates the merits of employing a short-term bucket alongside a long-term portfolio.

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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.