Fixed Asset Allocation (FAA) treats every dollar the same, regardless of what it's meant for. Whether the money is needed for essential living expenses, medical costs, or a discretionary house upgrade, FAA applies one broad allocation rule and offers no way to reflect the importance or flexibility of different goals.

The bucket approach, however, is goal-sensitive. It allows retirees to decide what percentage of a future expense must be fully protected. For example, a retiree planning to buy a house can choose to cover only 50% through a safe bucket and keep the rest in growth assets, while ensuring essential retirement expenses are covered 100%.

This flexibility is a major advantage.