Plus tier · advanced calculator
Three-bucket drawdown is a Plus-tier tool. Try the math here for free; saving scenarios, AI dispatches against your portfolio, and exports unlock on a paid plan.
§ Calculator · Retirement
Three-bucket drawdown simulator
What this is
Time-horizon bucket strategy. Built to defeat sequence-of-returns risk.
Split your portfolio into three time horizons: cash for 1-3 years of spending, bonds for 3-7 years, and stocks for everything past that. When stocks fall, you draw from cash and bonds, never selling equities at a loss. When stocks recover, you refill cash and bonds from the equity bucket. Lucia / Morningstar / WCI canon.
- ·B1 cash: HISA + GIC ladder. 1-3 yrs of net withdrawal. Boring; that's the point.
- ·B2 income: short-intermediate bonds, bond ladder, dividend payers. 3-7 yrs.
- ·B3 growth: equity / REIT / alts. Everything 10+ years out.
- ·Refill rule: only refill cash/bonds from equity in years when equity was UP. In down years, let B3 recover.
Sanity check
Initial withdrawal rate 6.00%. Above 5% is high-risk regardless of bucket setup. Buckets cushion sequence risk; they don't fix an unsustainable withdrawal rate. Run the 4% rule calc first.
Refill rule
Stress test
Net withdrawal / yr
$72,000
Initial withdrawal rate
6.00%
Bucket 1 sizing
$144,000
Bucket 2 sizing
$360,000
Bucket 3 sizing
$696,000
Ending portfolio
$0
Depleted at year
24
Worst B3 drawdown
100.0%
Bucket balances over time (deterministic)
Year-by-year refill log
Deterministic projection, first 12 years. Balances shown are end-of-year, after withdrawal and any refills.
| Year | Annual withdrawal | Cash bucket | Bond bucket | Equity bucket | Equity return | Refill action |
|---|---|---|---|---|---|---|
| 1 | $72,000 | $76,320 | $376,200 | $744,720 | +7.0% | |
| 2 | $73,800 | $147,600 | $369,000 | $678,189 | +7.0% | refilled B1 ← B2; refilled B2 ← B3 |
| 3 | $75,645 | $76,383 | $385,605 | $725,662 | +7.0% | |
| 4 | $77,536 | $155,072 | $387,681 | $637,801 | +7.0% | refilled B1 ← B2; refilled B2 ← B3 |
| 5 | $79,475 | $80,250 | $405,126 | $682,447 | +7.0% | |
| 6 | $81,461 | $162,923 | $407,307 | $584,542 | +7.0% | refilled B1 ← B2; refilled B2 ← B3 |
| 7 | $83,498 | $84,313 | $425,636 | $625,460 | +7.0% | |
| 8 | $85,585 | $171,171 | $427,927 | $516,190 | +7.0% | refilled B1 ← B2; refilled B2 ← B3 |
| 9 | $87,725 | $88,581 | $447,184 | $552,324 | +7.0% | |
| 10 | $89,918 | $179,836 | $449,591 | $430,186 | +7.0% | refilled B1 ← B2; refilled B2 ← B3 |
| 11 | $92,166 | $93,065 | $469,822 | $460,299 | +7.0% | |
| 12 | $94,470 | $188,940 | $472,351 | $323,580 | +7.0% | refilled B1 ← B2; refilled B2 ← B3 |
Reuses the 4% rule sanity check. Buckets reduce sequence-of-returns risk; they don't change the underlying long-run withdrawal math.
Disclaimer
Educational, not financial advice. Output is generated by an AI assistant using simplified assumptions. Tax rates, contribution limits, and benefit amounts change annually; confirm with a CFP, CPA, or the relevant Canadian regulator (CRA, FSRA, OSC, IIROC) before acting. Bucket calculators are educational frameworks. Real-world allocation depends on tax-account mix (RRSP/TFSA/non-reg), CPP/OAS election timing, and behavioural tolerance to seeing equity values fall.