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50% of CRNAs Are Going to Retire Over The Next 10 Years! The Hierarchy of Retirement Needs

50% of CRNAs Are Going to Retire Over The Next 10 Years! The Hierarchy of Retirement Needs

March 23, 2018

Even though money is fungible, we often categorize our money into different buckets, be it by types of spending or time frame. We also tend to mentally prioritize our income and assets, focusing first on covering our current income needs, then to our existing assets, and lastly to our savings for future needs.

This may help explain why bucketing strategies have long been popular.

The Bucketing Strategy

In this strategy, a retiree household assigns one-third of its savings to equities, one-third of its savings to fixed-income investments, and another third of its savings to cash. Each of these “buckets” has a different function.

While everyone’s buckets will be different because every person’s risk tolerance and needs are different, the bucket approach generally features a bucket for cash and income, a bucket for assets or conservative investments, and a bucket for future income and growth investments.

Why the Bucket Strategy Can Help

Bucket strategies like this may help because they coincide with how our minds like to place our assets into different categorize. Most often, we tend to bucket our wealth into three buckets: current income, current assets, and future income.

This can be helpful because, even if your money is fungible, you’re still likely to react differently if you feel your wealth decreasing in one of the buckets. For example, if you start to feel your wealth is shrinking, the first and most obvious step may be to cut back on current expenses. Or, one may feel dissatisfied with their wealth if they don’t have a reasonable amount of assets on hand, regardless of the size of their income.

Whether we realize it or not, this bucketing approach implicitly prioritizes current income followed by current assets and, lastly, future income. Generally speaking, people struggle to feel satisfied with longer-term buckets if the more immediate ones aren’t satisfied.

For anyone who took Psychology 101 in class, this may remind you of Maslow’s hierarchy of needs. Maslow believed people have a motivational hierarchy of needs that must be satisfied in a particular order, starting with physiological and safety needs followed lastly by self-fulfillment needs.

In a way, the retiree has a similar hierarchy of retirement needs that he or she strives to fulfill in a specific sequence.

Fulfilling the Hierarchy of Retirement Needs

It may be helpful for retirees and pre-retirees to consider how they can tackle each level in this hierarchy. If we look at the figure above, we see that the first need to address is current income.

It’s difficult to feel confident in your future retirement if you aren’t satisfied with your current income, which includes your spending cash flow, your paycheck, and any passive income. This means that before you can focus on your future retirement income, you need to have a handle on your current income and spending.

Next, once people believe they have a handle on their current income, many want to feel satisfied with their assets, from their savings account to money market accounts. For many people, this may include their emergency reserve to cover any unexpected expenses they can’t comfortably cover with their paycheck.

It seems that only once people have a handle on their current and short-term expenses can they start to focus on and feel confident in their future income and retirement lifestyle.

What Does This Mean For You?

While everyone’s needs and level of comfort vary, this hierarchy of retirement needs may be a helpful guide as you think about your future retirement.

When looking at these buckets, which concerns you the most? What is the first step towards greater confidence in your future? At CRNA Financial Planning®, we specialize in helping CRNAs plan for and navigate their retirement. Whichever bucket or hierarchy level is currently concerning you, we encourage you to contact us to see how we may be able to help. Call our office at 855.304.3748 or email Or, schedule a free 15-minute introductory phone call now.

About Jeremy Stanley

Jeremy Stanley is the founder of CRNA Financial Planning® as well as CRNA Tax Associates®. He has been providing advice and guidance for Certified Registered Nurse Anesthetists (CRNA) for over two decades. As a CERTIFIED FINANCIAL PLANNER™, Jeremy has met rigorous certification and professional standards set by the CFP® Board. He is committed to adhering to the principles of integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence when dealing with clients.

Jeremy is also the author of The Wealthy CRNA and A CRNA’s Life After Anesthesia. The Wealthy CRNA features insights into becoming a financially successful CRNA and how to start planning for your financial future, and has been prior approved for up to 4 Class A CE credits by the AANA. A CRNA’s Life After Anesthesia serves as your financial roadmap for a smooth emergence into retirement. It reviews recent changes in the CRNA industry along with the new rules of retirement and the final steps of legacy planning. This book has been prior approved by the AANA for up to 2 Class A CE credits.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.