Planning Retirement? Here’s How the “Rule of Thirds” Can Secure Your Future

Retirement planning is all about balance, making sure you don’t run out of money while still enjoying the life you’ve worked for.

But with today’s rising healthcare costs, inflation, and people living longer, that balance feels harder to achieve than ever.

That’s where the “Rule of Thirds” comes in. It’s a simple retirement strategy financial planners are recommending more often, and it could help you stretch your savings while reducing stress.

 

What Is the Rule of Thirds?

The Rule of Thirds divides your retirement money into three equal parts, each serving a different purpose:

1. One-third for guaranteed income

   • Covers essentials like housing, groceries, and medical bills.

   • Often comes from annuities, pensions, or Social Security.

2. One-third for fixed expenses & flexibility

   • This portion can pay for travel, hobbies, or unexpected family needs.

   • Gives retirees freedom without overspending.

3. One-third for growth

   • Invested in stocks, bonds, or mutual funds.

   • Protects against inflation and keeps your money growing for the future.

Think of it as a safety net plus growth plan: one-third provides security, one-third offers flexibility, and one-third helps your savings outpace inflation.

You might be missing out on benefits, check what’s available to you here!

 

Why Retirees Like This Strategy

For years, many followed the “4% rule”, withdrawing 4% of savings yearly. But with today’s volatile markets, that method feels outdated.

The Rule of Thirds, on the other hand, spreads risk across multiple buckets.

Even if the stock market dips, you still have guaranteed income to cover essentials. And when the market does well, your growth bucket keeps you ahead of inflation.

 

What to Watch Out For

Like any retirement plan, this approach has trade-offs:

• Annuities reduce liquidity: Once you commit money, you can’t easily pull it back.

• Market risk remains: The growth bucket can still rise or fall with the economy.

• Interest rates matter: Your annuity income depends on the rate when you buy it.

That’s why this strategy may work best for retirees who don’t already have a big pension and want a clear, structured way to balance safety and growth.
-
 
Discover more helpful tips and insights at GetSeniorBenefits.net—where we empower you with the knowledge to live your best life every day.