Advisor Urges 2-Year Cash Buffers for Retirees as S&P 500 Hits Highs Every 14 Days
Updated
Updated · The Denver Post · Aug 16
Advisor Urges 2-Year Cash Buffers for Retirees as S&P 500 Hits Highs Every 14 Days
1 articles · Updated · The Denver Post · Aug 16
Summary
Sequence-of-returns risk can do the most damage in the first years of retirement, when withdrawals during a market slump lock in losses and leave fewer assets to recover.
Steve Booren says retirees near record highs should focus less on statement balances and more on income sources, because spending needs continue even when markets fall.
A cash reserve covering a few years of expenses can let households avoid selling long-term investments into a bear market, while dividends can add ongoing cash flow.
Booren cautions that cash is only a buffer, not a full strategy, since inflation can erode purchasing power over a 25- to 30-year retirement.
The broader point: new market highs are common and do not predict a bear market, but retirement plans should still be built to fund life through one.