The problem it solves
If all your retirement money is in equity and the market falls 30% in your first year of retirement, every withdrawal sells units at a low and the corpus may never recover: the sequence-of-returns risk. If it is all in fixed deposits, inflation eats it over thirty years. The buckets give you both: safety for the money you need soon, growth for the money you need later.
The three jars
| Bucket | Holds | Filled with | Pays |
|---|---|---|---|
| Income | 2 years of expenses | Liquid and short-duration debt funds | Your monthly expenses, from day one of retirement |
| Stability | The next 5 years | Hybrid, conservative and debt funds, EPF/PPF when received | Refills Income in bad years |
| Growth | Everything else | Equity funds | Refills both in good years |
Building the buckets: five years before retirement
Until five years before your retirement date, everything grows together. Then, every quarter, the app moves a small amount from Growth to Stability, and in the last two years to Income too, so that on the retirement date the jars are full. It only moves money in a good market (the funds near their highs), so nothing is sold in one go or at a low. Each quarterly step is shown with the fund names and amounts; you make the switch and record it.
Running it: the yearly rules
| The year was | What happens |
|---|---|
| Good (market near its high) | Growth sells a little to refill Income back to 2 years and tops up Stability. |
| Bad (market down) | Growth is left alone. Stability refills Income instead. |
| Recovery (back near its high after a fall) | Growth refills both Income and Stability. |
| A long fall (years) | Stability keeps at least 2 years of expenses safe. If Income cannot be refilled, the app warns you so you can spend a little less for a while. |
The idea in one line: you never have to sell equity in a crash, because the next seven years of expenses are already safe.
What the app does
- Create a retirement goal; the corpus comes from today's expenses, inflation and a safe withdrawal rate (see goal-based investing).
- Tick the money for goals. Your equity funds fill Growth, hybrid and debt funds fill Stability, EPF and PPF count in Stability but are never switched; when they are paid out you record where the money went.
- Open Buckets today on the goal: the three jars with their current amounts and the date filling starts, and How buckets work for the rules with pictures.
- From five years out, each quarterly step appears on the goal and in the daily email. After retirement, each month's income and each yearly refill appear the same way.
Buckets and SWP
A systematic withdrawal plan is the mechanism: the monthly expense is an SWP from the Income bucket's liquid fund. The SWP calculator shows how long a corpus lasts at a given withdrawal; the buckets decide which fund the withdrawal comes from so that equity is never the source in a bad year.
Your buckets, your funds
Growth, Stability and Income filled from the funds you hold, with the next quarterly step.
Your actual funds, EPF and FDs fill the jars. Every year of the plan becomes a step like this.
Last updated 15 Oct 2026 · by Jagadeesh Manne, who built Capital Friends for his own family.
Plan retirement with your real portfolio
Capital Friends turns this calculation into a plan: it counts your existing funds, EPF and FDs, shows the SIP still needed, and runs the three-bucket withdrawal strategy on your own money. Free, data in your Google Drive.
Frequently asked questions
How many years should the income bucket hold?
Two years of expenses in liquid or short-term debt funds, so that no withdrawal depends on the market. The stability bucket holds the next five, so seven years of expenses are safe at any time.
When does the app start filling the buckets?
Five years before your retirement date, every quarter, in small steps and only in good markets. Before that everything stays in the growth mix.
What happens in a market crash after retirement?
Growth is left alone. Income pays your expenses; Stability refills Income. Only when the market is back near its high does Growth refill the other two.
Where do EPF and PPF go?
They count towards Stability but are never part of a switch or sell step. When they are paid out, you press Received and tell the app which fund the money went to.
Does the app execute the switches?
No. It shows each step with fund names, units and amounts; you place it with your AMC or broker and record it.
Read next
Goals on a road, funded from the money you already have, moved to safety on time.
Corpus you need at retirement and the SIP to reach it.
How long a corpus lasts with monthly withdrawals.
Everything that is not a fund: gold by weight at today's rate, the house with its loan.
Calculators use the inputs you enter and standard formulas; results are estimates, not guarantees. Returns from mutual funds, stocks and other investments are not fixed and can be lower than assumed. Capital Friends is a tracking tool and is not a SEBI-registered investment adviser; nothing here is a recommendation to buy or sell any security.