With all the good news in the stock market and the economy (except for a hiccup here and there) it is easy to assume that we are sitting at a point in history that is ideal for the person about to retire.

I take an entirely different viewpoint. I believe we have finally reached the worst time in history to retire! With interest rates near all-time lows, and the stock market near all-time highs, the world has flipped for those planning retirement. The ideal situation would be the opposite of today: there would be HIGH interest rates on bonds, with plenty of low-priced stocks to buy…and social security wouldn’t be on it’s way to insolvency. (the government estimate is that by 2034, 16 years from now, the Social Security trust funds will be gone.)
..But that’s not how things are. Bond rates are skimpy, and the market is getting old. With all of this, today’s Baby Boomers may be retiring into one of the worst possible financial environments ever! Predicting the next ten years of stock market performance should be done with caution.

History is a wise teacher when it comes to understanding how the market works over longer periods of time. In the short run, anything can happen. In the long run, things are much more predictable if your strategy is sound and based on prudent principles.

Which is why financial bucketing works well for those trying to get a handle on their cash flow and investments in retirement. The key is recognizing that your cash flow and your investments are two separate things. If you dip into your growth investments for income in retirement, you could find yourself selling on the dips and ruining your chances of having all the income you need for life in a separate bucket.

Every investor knows that diversification is important, but for many people that seems to mean getting more mutual funds so that things are nicely “spread out.” In my book Smart Is The New Rich, I refer to this idea as a D.U.M.B. mistake: “Diversifying Under Misguided Beliefs.” Spreading things out might make you feel good, but it is not proper diversification. The IQ Wealth Safer Bucketing system works from a principle of dividing your money into four basic buckets:

1) Cash (money market equivalents, liquid immediately)
2) Fixed Income (preferable insurance backed income, guaranteed for life)
3) Growth Investments (The more income you have in bucket 2, the more aggressive you can be in bucket 3. I recommend keeping it real with dividend payers and carefully selected growth stocks. For more visit www. BlackDiamondDividend.com
4) Outcomes (with this bucket, bucket 4, we address long term care, tax strategies, estate planning, and life insurance if desired)

With an intelligently laid out bucketing plan, I believe you will feel more secure and organized about your finances. You will see the path forward and own the vehicles that have the right stuff to get you there.

If you would like to see how the Safer Buckets™ system can work for you, let’s get on the calendar soon.

Best Selling Author and Kiplinger Contributor, Steve Jurich

Steve Jurich is a financial advisor, Kiplinger Contributor, and daily radio host on Money Radio in Phoenix. His program, MASTERING MONEY, can also be downloaded on podcast with the free MASTERING MONEY App, and by clicking here.