The Bucket Approach for Investing in Your 50s

Planning for retirement is not as simple as it was for your parents. Retirement income used to be a three-legged stool: pension, Social Security income and savings. Recently, companies have been doing away with pension plans and Social Security does not cover nearly enough of an individual's retirement income needs.

Most savers are in their peak savings ability in their 50s, and it's important time to build your buckets efficiently. To better balance your retirement savings, you should diversify your tax positioning. This can be done by contributing to three "buckets": taxable, IRA (pre-tax) and Roth (post-tax).

The Taxable Bucket

Any money that is in your taxable bucket reaches your account after