The 2008-2009 market crash and resulting bear market have been absolutely brutal to new retirees and soon to be retirees alike. For those in my age set (about 30 years out from retirement) it serves as a poignant lesson of what can go wrong.

To Mary Beth Franklin, editor of Kiplinger’s magazine, it also suggests a new way to view near retirement and post-retirement investing. It puts emphasis on what she calls “Reliability of Income”. Mary Beth suggests that retirees divide their assets into 3 buckets:

Bucket 1:

25% in laddered CDs or short-term, immediate payout annuities. This will generate safe income for the 1st 5 years.

Bucket 2:

50% in bonds and broad based stock market index funds or ETF’s for intermediate goals. A portion of this money moves into bucket 1 in 5 years.

Bucket 3:

25% invested in stocks, commodities and real estate for long term growth. A portion of this money will move into bucket 2 every 5 years.

By rebalancing every 5 years, this method ensures that you are shielded from crashes like the one we just experienced, because you still have that 25% to live on for the next 5 years that is unharmed. By the time you need that money in buckets 2 and 3, the market will have rebounded at least somewhat.

• How Often Do You Rebalance Your Investments? I had always heard that investors should rebalance their portfolios at least once a year, maybe twice a year and at the same time every year. But I never heard that everyone should rebalance at the same time of year, yet that's exactly the basis of a recent Wall Street......
• 3 Tips to Make Your 401(k) Work for You. Morningstar has a terrific article (available to free members) titled Three Tips to Make Your 401(k) Work for You and I love it! Here's a brief sample of why: It's surprising there aren't many calls in the press to ditch the automobile. After all, think of all the dumb things......
• 5 Reasons Why Retiring Baby Boomers Won't Cause A Stock Market Decline. There's been talk about the "coming stock market crash" for years now, and one of the presumed causes is retiring baby boomers suddenly selling their stocks en mass. The reason seems sound enough. Baby boomers are no longer working and saving for retirement, and once their golden age arrives they......
• A Sample ETF Portfolio for Alternative Investments. If you're looking for an ETF portfolio that provides exposure to assets other than stocks and bonds, you may want to check this out. The ETFs in this portfolio (from Kiplinger's magazine) are anything but the boring, old index funds that got the ETF started. The funds cover commodities like......
• Mutual Fund Monday. I'm down with the flu this week, which means I'm taking it easy - but not too easy. I'm catching up on some reading and found some nuggets of knowledge regarding mutual funds that you may not already know about and you may enjoy reading. So, without further ado (because......

• Building a Retirement Emergency Fund Let me start by saying that a retirement emergency fund is different from the "cash flow" emergency fund that Dave Ramsey, Suze Orman, and many others have been counseling us all to have. Every book and article on basic personal finance cautions baby boomers and other working adults to have......
• Have We Been Sold A Bunch Of Lies About Money? Here lately I find myself often reflecting on the current status of our economy, and wondering when and how things will shake out.  My 401(k) has been demolished.  Family member's 401(k)s have been demolished, even those in target retirement funds that should have been comprised of more conservative options based......
• Retirement Income from an Inflation Indexed Annuity Inflation is the great killer of long-term retirement dreams. Inflation is also a great unknown. When it will hit, how hard, and for how long is difficult to predict. This can add significant complexity to retirement planning. Many of us want to simplify, not add complexity and cost. Eliminating Retirement......
• Index Fund Investment FAQ I believe index funds should form the core of everybody's investment portfolio.  There is a time and place for actively-managed mutual funds, to be sure, but I believe they should play a supporting role to the index-fund-dominated lead.  The following index fund investment FAQ is meant get you acquainted with......
• Annual Financial Performance Review It's the beginning of a new year and new decade and therefore time to update the Mr. and Mrs. ToughMoneyLove financial performance metrics. All of our investments collectively gained 24.06% for the year (as a percentage of our cost basis) and 5.86% in the 4th quarter. Our average annual return......