Customer Reviews

Buckets of Money: How to Retire in Comfort and Safety

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This is not really a book about how to amass your retirement savings, but rather what to do with it when you are retired. The system is simple. You have 3 buckets. In bucket number 1 you put your money for the next 5-7 years. Bucket number 2 is for the next 5-7 year period after that. And finally, bucket number 3 is for the money you will not need for 10-14 years. The book then discusses the proper investment choices for each bucket, how to rebalance them when necessary.

The plan makes sense and seems simple. The only part I was not entirely clear on is when to move items from bucket 3 to bucket 2. Maybe I missed it. In any case, the book was a good read and I plan on reading it again when I get closer to retirement.

I'm looking forward to Ray's next book (the radio show is good too).

I first became aware of Mr. Lucia and his "BrainTrust" (Rick Plum, Rob Butterfield, Jr., and John Dean) when his long-running (14 year) San Diego-based radio show went national and became syndicated with Business Talk Radio at the end of 2000; I thank the day I stumbled upon this sage. The show has become increasingly popular and now airs in around 60 markets. Once limited to the greater San Diego area, this show is now educating people all across the country. This book continues the process of finally bringing Ray Lucia to an even broader audience.

Lucia's show and this book avoid the ridiculous "buy, sell, hold" approach that permeates the work of so many other financial gurus. This is not a "get rich quick" or "doom and gloom" book. Lucia does not pretend to know what direction markets or any individual security is going in the short-term. He sticks to what he knows (and what you need to know). This book is about much more than asset allocation and diversification. It is solid advice based on the prestigious 30-year career of Lucia and his highly competent associates.

If you want books that teach you how to learn how to do a solid fundamental analysis of securities, I recommend the classics by Benjamin Graham, by Peter Lynch, by Philip Fisher, by Louis Engel and about Warren Buffett. If you want a book that takes a refreshing approach and truly carves out a niche by focusing on financial planning, Lucia's book is the book for you. In many ways, Lucia's book is a more relevant read than any of the above mentioned authors.

Believers in an efficient market understand the other authors can only take you so far. Lucia takes you several steps further by sharing financial planning strategies that will work for everybody. This is what is lacking in the vast majority of financial literature. Authors spend too much time trying to tell you how to find the next Microsoft. In the process, they neglect powerful basic and advanced personal finance strategies and investment tools. This is what truly reduces risk and adds value to one's portfolio over time. The vast majority of investors will get more from Lucia's book than any other book they read in their lifetime.

I enthusiastically recommend Lucia as must reading for any investor in any stage of his/her life. This is a great book for a grandfather to buy to read and pass on to his daughter, who can then pass it on to her son. People just starting out will greatly benefit from this book in that it will tell them as much about what not to do, as what to do. More sophisticated and astute investors will benefit from Lucia's empirical study based recommendations on how to allocate and balance one's portfolio. I have acquired more practical knowledge from Mr. Lucia than I have through my undergraduate studies, graduate studies, and other studies combined.

It is a rare and refreshing treat to find someone in this field who not only has such a vast body of knowledge that he is willing to share, but is able to communicate it in such an articulate manner. Lucia not only recommends the right things, but he does things the right way. Lucia is altruistic and passionate. In terms of financial planning savvy, Lucia is by far the best of the financial gurus. In terms of the intangibles, in his words you will find a motivator who cares deeply about his family, his work, and sharing his vast body of knowledge with people from all walks of life so as one of his mottos goes, "You will be successful in your money, your business, and your life."

Lucia may not (yet) get the press and hype of some of the other financial gurus that have television shows, radio shows, and books. However, if you read his book, you will see he is the premier guru in the country. If you don't agree with this comment after reading his book, I recommend you read his book twice and then listen to his radio show.

In some ways this book is like the other books out there: work hard, save money, let it compound. However, he does preach something that no other book I have read teaches. Most people say you save all your life and then you retire, and that is where they end their story. They focus on all the ways to save up enough money to retire and live off the interest. However, for most people that is impractical, and impossible for some. This book on the other hand gives you a good way to think about how to deal with your money in stages, and realize that retirement is not the end of your investing. Easy read, lots of good info, not too many stats to bog you down. Overall, very glad I read it.

I purchased this book 2 years ago, read it and decided I'd actually DO something when we were closer to retirement. Well, now we are 3 months away from retirement, I moved our 401k's to cash this year (before the crash) and thanks to Ray Lucia's ideas, we have enough cash for 12-15 years' expenses and unlike most people in this melt-down stock market, we will not have to postpone retirement. His theory is simple: 3 buckets: a bucket of enough cash to get you thru the 1st 7 yrs of retirement; a bucket of bonds to get you thru the 2d 7 years of retirement; a bucket of growth investments that you won't need for 15 years, which will hopefully get you thru all this market volatility. He does makes specific recommendations for each bucket, but the basic idea is simple and removes the risk of retiring too early and running out of money.

3/2010: My husband and I retired last year, and because of the 3 Bucket book, we did not have to postpone it. It didn't matter to us that the stock market crashed, because we had 15 years' worth of assets to draw from until we needed to pull from the stock market. I have recommended this book to all my friends who are nearing retirement. If you are within 10 years of retirement, you need to read this book and act on it!

I really enjoyed reading Ray's book, and it helped me to understand the "Buckets" philosophy he talks about on the radio. It's a great retirement strategy, although you do have to be somewhat disciplined at saving to make it all work properly. It also requires you to take money from only about 5% of your portfolio each year, which some people may or may not be able to do, so if you're used to taking huge chunks of cash from your savings each year you might not be able to follow it. It seems rather foolproof (which I like), and while it doesn't promise huge returns on your money (it's very conservative), it does make sure that you never run out of money even if we run into another "bad run" in the stock market. I wish I read it two years ago, but that's the breaks.

I also enjoy his radio show, he's much better than that boring Ramsey guy that follows him. Maybe I'll get the nerve to call in one day and ask a question to the Braintrust!

This is an excellent book for the beginner to the more sophisticated person to consider when managing your retirement funds. Ray gives thoughtful insight into the potential investment strategies for three different "buckets of money". The difference in the 3 buckets is the time horizon the funds will be needed and the various amounts of investment risk that could be assumed in each time period.

His plan makes amazing sense and I have utlized it successfully in my personal retirement plan (I am 46 & retired) and my mother's (who is now 70 1/2). I have listened to Ray's business talk show for the past several years and also seen him speak at a free weekend morning seminar in Portland, OR. His personal judgement and that of his "brain trust" is safe, sound and easily followed.

I have purchased this book for myself and multiple family members/friends for their consideration. It has always gotten favorable reviews. I just purchased his newest book, "Ready..Set..Retire: Financial Strategies for the Rest of Your Life". I am anxiously awaiting it's delivery for any new information he has to share!

Recommended even to other CPA, financial planers, and insurance agents. Ray's personality shoots through the pages make it a "Fun" book to read. I can't believe I used the work fun, but it is appropriate. Helpful illustrations allow those negligent in retirement planning to understand the importance of "Bucketizing" (read the book). If you enjoy his radio show you will find the book beneficial as well.

This book introduces a new way of how to handle the vexing problem of dealing with the ups/downs of the stock market while winding down your retirement savings. While I'm not buying into the exact plan presented by Mr Lucia, I am planning on a variation of his plan utilizing annuities as part of the bucket plan.

What this book does in introduces you to some of the problems you may encounter when dealing with the stock market and winding down you assets in retirement. The real gem in this book isn't the exact details of the proposed plan presented in the book, but the basic concept and the things you need to consider on how to use the various tools to deal with the surprises the market is going to present to you in your retirement and how to make sure you don't run out of funds before you die.

Here is a list of some of the books I have read in preparing for retirement, and a one-liner, and ranking for each. I will order them in the order I would read them:

1. The AARP Retirement Survival Guide: How to Make Smart Financial Decisions in Good Times and Bad (Julie Jason)
Rank: 5/5
Summary:Real good overview and introduction to the many considerations for retirement.

2. Buckets of Money: How to Retire in Comfort and Safety (Raymond Lucia)
Rank: 4/5
Summary: Interesting concept on planning for retirement. Although I'm not sure I will use the plan Raymond lays out here, I think the general concept is a real good idea on how to think about tapping your assets as you plan for retirement.

3. Annuities For Dummies (Kerry Pechter)
Rank: 4.5/5
Summary: Great details on the highly complex subject of annuities, a critical tool for your retirement planning to alleviate longevity and market risk.

If you read the books above, I don't think there is a need for reading the books listed below since either they don't have the depth, or have already been covered in sufficient detail in the books above.

The Bogleheads' Guide to Retirement Planning (Various Aurthors)
Rank: 3.5/5
Summary: I think this book tries to cover a little to much, and as a result has topics that I don't think are appropriate for the retirement planning. Since the book attempts to cover so many topics, it really doesn't give real good details on any one topic. I think of this book, more as an executive summary for the various topics it covers.

Can I Retire? How Much Money You Need to Retire and How to Manage Your Retirement Savings, Explained in 100 Pages or Less (Mike Piper)
Rank: 2.5/5
Summary: What do you expect for 100 pages? Although the author does seem to stay on-topic in this book, its just to broad to really give you any actionable information. Perhaps a decent book if you are just wading into the whole concept of retirement and don't want to put alot of thought into details(IE the big picture). This book does not answer the question it poses in the title.


Hope this helps
James

I enjoy Ray's work. His book walks you through the financial planning process and clearly illustrates how it is done right. The first step of the process is factfinding and educating. The second is suggesting solutions. Ray's mastery of the process shines through and provides enough information to help you get started with your own plan.

So much has been written on how to accumulate assets from retirement, using dollar cost averaging, asset allocation and focusing on long-term returns. But when you retire the rules change - short term market volatility can destroy a portfolio in the draw down stage and dollar cost averaging is an awful withdrawal method. Ray's "Buckets of Money" method offers a logical approach to break down a long term retirement goal (30+ years) into shorter "investment" timeframes. Read this before you retire!