Summary
Experts advise retirees to keep a modest but strategic cash buffer rather than holding excessive savings in low-return accounts. The Money.com article explains that maintaining roughly one to two years’ worth of living expenses in cash—after accounting for predictable income like Social Security—helps cover short-term needs and avoid selling investments during market downturns. This approach supports stability while allowing the rest of a portfolio to remain invested for growth. However, holding too much cash can erode purchasing power due to inflation, so retirees should balance liquidity with long-term investment strategies tailored to their spending, risk tolerance, and income sources.
Money
