Rob Berger doesn't like dedicating a cash reserve for buying stocks after a crash during retirement. He thinks that's the time to rebalance from bonds to stocks, emphasizing buying low, as you were normally doing during accumulation. He's says that the dual poor performance of both stocks and bonds in 2022 was a 1% occurrence happening only every other century, and shouldn't guide cash allocation.
In retirement, he personally keeps a 3-to-6-month emergency cash reserve and extends it out to one year for "peace of mind". Ideally, he would never touch this last-resort cash, and certainly wouldn't use it to buy depressed stocks.
In my own (retired) case, I have only $12k in cash, but I've recently been adding $2k or more each month from unspent pension money. I like my cash to at least be able to cover the remainder of my income taxes, property taxes and (very high) home insurance premiums, and it's not part of my investment portfolio.
Some large cash holders may want to pair their cash with U.S. large cap stocks, international stocks, and bonds as proposed by Morningstar.
In retirement, he personally keeps a 3-to-6-month emergency cash reserve and extends it out to one year for "peace of mind". Ideally, he would never touch this last-resort cash, and certainly wouldn't use it to buy depressed stocks.
In my own (retired) case, I have only $12k in cash, but I've recently been adding $2k or more each month from unspent pension money. I like my cash to at least be able to cover the remainder of my income taxes, property taxes and (very high) home insurance premiums, and it's not part of my investment portfolio.
Some large cash holders may want to pair their cash with U.S. large cap stocks, international stocks, and bonds as proposed by Morningstar.
Statistics: Posted by pascalwager — Sun Jul 14, 2024 11:21 pm