The Buckets of Money Retirement Solution: The Ultimate Guide to Income for Life

Amazon Exclusive: Q&A with Author Ray Lucia

What are some sensible financial goals for someone who is about to retire?
Ray Lucia: Well, the biggest thing today is to have realistic expectations. If you think you’re going to earn 10 or 12% on the stock market and double your money every five or seven years, you might be fooling yourself. So, make sure you have a realistic expectation. Take into consideration when you will retire, when you’ll take social security, and what taxes you might be paying at that time. In the book, Buckets of Money Retirement Solution, I cover each and every one of those topics in great detail.

What are some basic tips for asset allocation and diversification?
Ray Lucia: Never do what I call “reverse-dollar cost averaging.” You’ve all seen the pie chart, and they all look nice and pretty. What individuals do, for the most part, is put their money in this pie chart, and then when it comes to retirement, they do “systematic withdrawals.” That’s a mistake. In Buckets of Money, we systematically withdraw from a safe money bucket, and we don’t reverse-dollar cost average out of the more volatile buckets. This method is covered quite extensively in the book.

The economy is always changing. What are some ways to protect a nest egg in the event of a catastrophe?
Ray Lucia: Right now, you have deflation and inflation working against you. No one knows if we’re going to have one or the other. That’s why you need to have a Buckets of Money strategy: a strategy that locks in long-term interest rates like guaranteed income for life, but is also sensitive to inflation down the road if in fact we have a bond bubble, if in fact we need to have something that grows over a long time period: assets like real estate, stocks and commodities. You really need a bar bell. You need something on the deflationary side and something on the inflationary side to protect you from either one or both.

What are some of the risks to avoid if someone is either already retired, or about to retire?
Ray Lucia: One of the greatest risks is watching too much television and reading into the radio talk shows too much. Most of the people that are pitching you stuff, whether it’s in books or tapes, or late-night infomercials, are really just trying to sell you something. We need to focus on strategy first: on managing taxes and then managing fees. If you do that with a Buckets of Money Retirement Solution, you shouldn’t have to worry about your retirement—ever.