Many retirees solve uncertainty by holding decades of expenses in low-yield debt, which protects against risk but quietly limits growth and spending. This treats all retirement years the same, even though they’re not. Early retirement is flexible—you can adjust spending or earn income if needed. The final years are not.

A better approach uses two safety buckets. The first is a rolling 5-year reserve to support the initial 20 years—at any point, the retiree keeps about five years of expenses in safe assets, replenishing it from the portfolio when markets are favorable. The second is a fully pre-funded late-life bucket, set aside at retirement to cover the final 10 years. This money is ring-fenced and untouched, ensuring protection regardless of market performance.

This is a reasonable alternative to the strategy of holding all future expenses in debt from the very beginning. Instead of over-allocating to safety upfront, it targets protection where it’s truly needed—while allowing the rest of the portfolio to grow.