The recent tariff proposals and post-"Liberation Day" adjustments have left many investors wondering: “What does this mean for my financial future?”

We believe that successful financial planning isn’t about predicting market movements—it’s about building resilience into your strategy. This is why we utilize The Bucket Plan® for our clients, a time-tested approach designed specifically to weather market storms while keeping your long-term goals intact.

Understanding Your Bucket Plan: Stability in Uncertain Times

For our retired clients, your Bucket Plan provides a structured income strategy that prioritizes predictability during market volatility:

The Now Bucket: This bucket is structured to hold enough cash and cash-equivalents to fund 6–12 months of immediate income needs, shielding you from having to sell investments during market downturns.

The Soon Bucket: Should contain 5–10 years’ worth of income invested conservatively, designed to outpace inflation while minimizing risk. Because this money is invested conservatively, it can provide a reliable income stream without requiring you to cash in investments during market volatility, allowing markets time to recover. This structure creates a crucial time buffer, so your growth-oriented investments have years to rebound before being tapped for income.

The Later Bucket: This is where we focus on long-term growth—and where volatility, though uncomfortable, is expected and planned for. For retirees, this bucket is intended for income needs 10+ years down the road, giving investments time to rebound from market pullbacks.

For clients who are still accumulating wealth, the Now and Soon Buckets still play a critical role. Having a strong cash position for emergencies (Now) and medium-term goals (Soon) provides stability while giving your long-term investments (Later Bucket) the time and space to recover from short-term volatility.

These buckets provide structure and purpose to your investments, removing the emotional guesswork and allowing you to stay focused on your goals regardless of market conditions.

Turning Volatility into Opportunity

Market pullbacks aren’t just challenges to overcome—they can create valuable planning opportunities. Here’s how we can take advantage of them:

• Roth Conversions: Converting traditional retirement accounts to Roth accounts during market lows allows future recovery and growth to occur tax-free. This strategy can be advantageous for both retirees managing future Required Minimum Distributions and younger investors seeking long-term tax efficiency.
• Tax-Loss Harvesting: For taxable investment accounts, we can capture paper losses to offset gains, potentially reducing tax bills while optimizing your portfolio allocation.
• Strategic Cash Additions: For clients still saving and investing, market declines represent opportunities to acquire more shares at lower prices through dollar-cost averaging—potentially enhancing long-term returns.
• Dividend & Interest Reinvestment: Automatically reinvesting dividends and interest during market downturns allows you to accumulate additional shares at discounted prices, helping grow your future income base.
• Disciplined Rebalancing: A systematic rebalancing process helps maintain your target asset allocation by selling what has held up better and buying what has become undervalued—essentially codifying a “buy low, sell high” approach.

Diversification: Not All Eggs in One Basket

Another cornerstone of financial resilience is diversification. Your portfolio likely includes exposure to various markets, asset classes, and sectors, potentially incorporating protection-based strategies like annuities or life insurance for additional stability.

This approach helps ensure that no single headline or market segment dictates your financial trajectory. While some investments may experience temporary declines, others may remain stable or even appreciate, providing balance to your overall financial picture.

Moving Forward with Confidence

We understand that market volatility can be unsettling. News headlines and daily market movements can trigger emotional responses that, if acted upon, might derail even the most carefully constructed financial plans.

This is precisely why we focus on utilizing resilient strategies grounded in time-tested principles and tailored to your specific life stage—whether you’re drawing income in retirement or working toward financial independence.

Taking the Next Step

For existing clients: If you’d like to review your current Bucket Plan in light of recent market events or explore strategic opportunities that may have emerged, please contact us to schedule a review with your advisor. 

For those new to us: If you’re interested in learning how a personalized Bucket Plan could help you navigate market volatility with greater confidence, reach out to our office to request a free initial strategy session with one of our financial professionals. 

Together, we’ll work to create a strategy that allows you to pursue your financial goals while maintaining peace of mind—regardless of what the markets may bring.

Source: 

This information has been  provided by Prosperity Capital Advisors and used with permission.

Disclosure:

This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Prosperity Capital Advisors to provide information on a topic that may be of interest to our clients.