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 6.33%. 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
$76,000
Initial withdrawal rate
6.33%
Bucket 1 sizing
$152,000
Bucket 2 sizing
$380,000
Bucket 3 sizing
$668,000
Ending portfolio
$0
Depleted at year
22
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 | $76,000 | $80,560 | $397,100 | $714,760 | +7.0% | — |
| 2 | $77,900 | $155,800 | $389,500 | $639,540 | +7.0% | refilled B1 ← B2; refilled B2 ← B3 |
| 3 | $79,848 | $80,627 | $407,027 | $684,307 | +7.0% | — |
| 4 | $81,844 | $163,687 | $409,218 | $585,848 | +7.0% | refilled B1 ← B2; refilled B2 ← B3 |
| 5 | $83,890 | $84,708 | $427,633 | $626,858 | +7.0% | — |
| 6 | $85,987 | $171,974 | $429,935 | $516,968 | +7.0% | refilled B1 ← B2; refilled B2 ← B3 |
| 7 | $88,137 | $88,997 | $449,282 | $553,156 | +7.0% | — |
| 8 | $90,340 | $180,680 | $451,701 | $430,322 | +7.0% | refilled B1 ← B2; refilled B2 ← B3 |
| 9 | $92,599 | $93,502 | $472,027 | $460,444 | +7.0% | — |
| 10 | $94,914 | $189,827 | $474,568 | $322,942 | +7.0% | refilled B1 ← B2; refilled B2 ← B3 |
| 11 | $97,286 | $98,236 | $495,923 | $345,548 | +7.0% | — |
| 12 | $99,719 | $199,437 | $498,593 | $191,410 | +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.