# Bucket Strategy

*Retirement & Benefits — Finicade finance glossary*

The bucket strategy splits retirement savings by time horizon: cash for the next couple of years, bonds for the medium term, equities for the long term. Mathematically it's close to a plain asset allocation with rebalancing. Its real contribution is behavioural — knowing two years of spending sits in cash makes it psychologically possible to leave the equity bucket alone through a crash, which is exactly when selling does permanent damage.

**Also known as:** bucketing, time segmentation, cash bucket

**Related terms:** [Sequence of Returns Risk](https://finicade.com/glossary/sequence-of-returns-risk), [Safe Withdrawal Rate](https://finicade.com/glossary/safe-withdrawal-rate), [Asset Allocation](https://finicade.com/glossary/asset-allocation), [Liquidity](https://finicade.com/glossary/liquidity), [Glide Path](https://finicade.com/glossary/glide-path)

Source: https://finicade.com/glossary/bucket-strategy