A Strategy for Playing The Back Nine

10 Sep 2015

You might think of life as like a golf course: You have the front nine and the back nine. Some advisors in the financial services industry focus on helping people accumulate money. That is, they’re on the front nine. But a huge question is how do you get that money out, with respect to tax efficiency. That’s critical. And that is playing the back nine.

An important concept to keep in mind when playing the back nine is what is known among many financial professionals as a “bucket strategy.” According to one distribution strategy, you need three primary categories, or buckets, of money when you retire. You need to have

  1. Taxable money
  2. Tax-deferred money
  3.  Tax-free money

Then, you need to develop a strategy for taking the money out of each bucket based on circumstances that range from personal ones to the economic and political forces that drive interest rates and taxation.

Honestly, it’s pretty easy to play the front nine quite well, be careful not to place so much time and energy there that you are tired and rushed later. Make sure you focus your efforts on the strategy you need to master the back nine as well.


Brad Berger
Brad Berger

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