Lili,

If you are still reading this thread:

The Bucket Strategy in its simplest form:

Bucket 1: A Money Market Account with sufficient funds for one years' worth of expenses.

Bucket 2: A mix of Equities/Equity Funds/Bonds/Bond Funds. From this bucket the retiree, at the beginning of the year, sells enough shares from funds that are worth more than they were at the beginning of the previous year to refill Bucket 1 for the coming years' expenses. If equities and bonds were both showing negative returns many following this strategy would sell only on the bond side.

Many people who employ the Bucket Strategy believe Bucket 1 should have enough $$$ to cover five years of living expenses. Yes, before you ask, that would be five years of cash or cash equivalents. The reasoning being that five years of Cash Reserves should make it unnecessary to sell equities in a prolonged Bear Market.

Billym