Retiring With A Cash Reserve

Many people want to enter retirement with a) investments that may have benefited from years of growth and compounding, b) a manageable debt position, and c) a cash reserve for emergencies. Just how large should that cash reserve be? There is no simple answer to that question because the answer is different for each retiree.

As pre-retirees save and invest, in pursuit of their retirement objectives, they are commonly encouraged to create a portfolio and accept some market risk. After all, keeping too much money out of the financial markets could carry an opportunity cost (lost yields, lost tax benefits). Retirees, however, may wish to maintain a cash reserve to deal with the unexpected. A health emergency may come with significant out-of-pocket costs. An air conditioner or water heater may break down, a storm may damage a roof or cause flooding – and a retiree household may face sudden home repair costs. In these situations, monthly cashflow may be disrupted and having a cash reserve can certainly help.

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W.M. Durham Associates LLC

2010 Raymond Diehl Rd., Ste. 102

Tallahassee, FL 32308

Ph:  850-385-3578

Toll Free:  800-396-3420

Fax::  800-372-3220

Email:  info@wmdallc.com

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W.M. Durham Associates LLC is an independent financial services firm that creates retirement strategies using a variety of investment and insurance products.  Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Any references to protection benefits or lifetime income generally refer to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.  WM Durham Associates LLC nor any of its employees provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

 

W.M. Durham Associates LLC is not affiliated with or endorsed by any government agency, including the Florida Retirement System (FRS).

All material should be regarded as general information.​​
 

2020 W.M. Durham Associates LLC