The bucket strategy is a retirement income approach that divides your savings into separate "buckets," each designed to cover expenses over a different time horizon. A typical setup includes a short-term bucket of cash for immediate expenses, a medium-term bucket of bonds or stable assets for the next several years, and a long-term bucket of growth investments for later in retirement.

The idea is to avoid selling stocks during a market downturn by drawing from the more stable buckets first and letting growth investments recover. As you spend from one bucket, you periodically refill it by moving money from a longer-term bucket. This approach can reduce anxiety about market volatility and help retirees feel more organized about their income plan.