The Three-Bucket Retirement Method I'm Following: Foundation, Growth, and a Heavy Income Tilt

I did not invent this. I have been following the three-bucket retirement method taught by Doug The Retirement Guy on YouTube, and I want to walk through it the way I actually use it, not the way it sounds on a whiteboard.

The idea is simple once you say it plainly. You split your money into three jobs instead of one pile. A foundation bucket is cash you never touch for investing, just dry powder so a bad month does not force you to sell something at the wrong time. A growth bucket is plain index money that keeps compounding for the years further out. An income bucket is the paycheck bucket, funds built to pay you something every month without you selling shares to make that happen.

That income bucket is where covered call funds like SPYI and QQQI live for me. I already wrote up the mechanics of those funds, the NAV erosion risk I watch, and the Goldman Sachs deal with NEOS on a separate page: covered call ETFs for retirement income. This page is not that page. This page is the three-bucket frame that decides how much money goes into that income sleeve in the first place, and why my split looks nothing like a textbook 60/30/10.

The three buckets, in plain English

Doug's version, the way I heard it, breaks down like this:

• Foundation. Cash and cash-like holdings. Not for growth. It exists so you are never a forced seller.
• Growth. Index funds you leave alone. VOO and QQQM class funds, the boring stuff that just tracks the market.
• Income. The bucket that writes you a check. Covered call ETFs and dividend funds you can live on without touching the growth bucket.

Doug talks about an age-50 shape as an example, something like 5 percent foundation, 60 percent growth, 35 percent income, then sliding that mix toward more income as retirement gets closer. The point of the method is not one magic ratio. The point is that every dollar has a job, and the mix moves as your own timeline moves.

Why my mix is not Doug's age-50 mix

Here is the part I want to be honest about, because I have seen people read a video like this and think they should copy the exact numbers. I am not restarting at age 50 with a 60 percent growth bucket. I am much closer to the finish line than that. My locked target, as of September 16, 2026, is roughly 90 percent income and ballast, 8 percent growth, 2 percent cash. People shorthand that as 90/8/2.

That is a heavier income tilt than even Doug's own near-retirement example, which he describes as sliding toward something like 10 percent foundation, 15 percent growth, 75 percent income. Mine leans further into income because I need the monthly paycheck now, not in ten years, and because I had already done a year of homework on covered call funds before I ever framed it as three buckets. If you are 50 and just starting to think about this, your shape should look a lot more like Doug's age-50 example than mine. Match the system, not my percentages.

I am not a financial advisor. I am not telling you to run 90/8/2. I am telling you what I locked in for my own situation and why.

The income bucket: the paycheck

This is the biggest bucket for me by design. It holds SPYI and QQQI, the covered call pair I cover in detail on the covered call ETFs page, plus SCHD as the slower, dividend-growing ballast that does not write options at all. SCHD is not there to be exciting. It sits in the income bucket because it pays a steady, growing dividend and does not need the option-writing machinery to do it.

I also moved some money out of QQQI and into GPIQ inside my Rollover IRA, roughly $40,000, about 712 shares, as a way to spread the covered call sleeve across more than one fund family instead of leaning on NEOS alone. That is a move I made for my own book, not a recommendation that you buy GPIQ.

The growth bucket: still small, still there

Eight percent is not nothing, it is just not the main event anymore. That slice holds plain S&P 500 and Nasdaq-100 index exposure, VOO and QQQM class funds, plus a KBR 500 index position I already hold. I moved roughly $42,000 out of QQQI and into VOO to build this bucket up. The job of this money is simple: keep compounding quietly in the background so I am not entirely dependent on distributions if I live a long time.

The foundation: cash I try not to touch

Two percent sounds small, and it is, but the point of this bucket was never size. It is the buffer that keeps me from ever needing to sell an income holding in a rough month just to cover a bill. I am still working toward the target here. As of my last count, my unique account book sat around the $917,000 mark after the QQQI moves into VOO and GPIQ, and I have roughly $15,000 more I want to route into cash, likely FDRXX, to finish filling this cushion. I have not pulled that trigger yet. There is no rush on it.

What I am skipping on purpose

Part of following someone else's method is deciding what you leave out. I am not buying annuities. I am staying away from the ultra-high-yield names that chase a headline number, the Russell 2000 covered call pair like RYLD included, because that category is exactly where the yield-eats-your-principal problem I flagged on the covered call page shows up hardest. I also looked at an international fund called OVF and ruled it out for now. None of that is a verdict on those products for someone else. It is just not where my three buckets need help right now.

Fine print

Credit where it belongs: the three-bucket framework here is Doug The Retirement Guy's, and I linked his video at the top of this page because I want you watching the source, not just my summary of it. My percentages, my fund picks, and my moves are my own situation, researched for months, not a model portfolio for you to copy. If you are moving real money around buckets like this, talk to a fiduciary first. Yields, fund lineups, and my own numbers will change. This is what I am doing, not advice to do it too.