Bucketing offers several advantages over annuities in managing retirement income. A key benefit is its adaptability to inflation: as bonds mature, they can be reinvested at higher interest rates, allowing the portfolio to adjust over time. In contrast, traditional annuities typically lock in fixed payouts that may lose purchasing power.

Bucketing also gives retirees control over how income is structured—whether to cover essential or discretionary expenses—and the flexibility to adjust that mix as needs evolve. Annuities don’t offer this level of customization.

Additionally, the glidepath in a bucket strategy can be modified, increasing or decreasing the years of expenses held in safer assets. While annuities provide stability, bucketing stands out for its flexibility, control, and responsiveness to changing financial conditions.