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During your working years, it’s important to have cash savings for unplanned expenses. These could run the gamut from home repairs to medical emergencies to a period of unemployment.
But what if you’re retired and are therefore relying on your savings and investments to fund your lifestyle? In that case, the guidelines for keeping cash on hand change quite a bit.
Here’s what you need to know before you retire.
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Why do retirees need cash?
In the context of retirement, cash can mean funds in a checking or savings account, or certificates of deposit (CDs) —essentially, money that’s shielded from market fluctuations.
Here are some reasons you’ll need cash as a retiree.
1. You’re living off of savings now
While Social Security offers income, the average benefit of $1,918 per month may not cover all expenses. Once that’s spent, cash allows you to handle surprises like car repairs or home maintenance without selling stocks or draining your savings.
If you want to grow your savings more efficiently, you can so just that with a high-yield cash account like the one offered by Wealthfront.
Wealthfront is a financial services platform offering a range of products, from automated investing to cash accounts. The Wealthfront Cash Account offers 5.00% APY — that’s 10x the national average.
With full access to your money at all times, Wealthfront also offers fast (and free) transfers to internal Wealthfront investing accounts, as well as external accounts
To get started, you can fund your cash account with as little as $1 and start stacking up your savings.
To compare all the best savings options, you can check out Moneywise’s Best High Yield Savings Accounts of 2025 to find some savvy savings options that earn you more than the national average of 0.4% APY.
Like the sound of high-yield account rates?
Then you might also be interested in exploring certificates of deposit (CDs). A CD is a low-risk savings option that can yield interest comparable to, or even higher than, the top savings accounts. The trade-off for this higher rate is that your money stays locked in the account for a set period.
With SavingsAccounts.com you can shop and compare top certificates of deposit rates from various banks nationwide.
Their extensive database shows the most competitive rates, with daily rate updates and personalized recommendations based on your risk preferences and time horizon so you can find the right CD to meet your retirement savings goals.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
2. You will face unplanned expenses
For workers, an emergency fund doesn’t just safeguard against a job loss. It can also be the ticket to covering surprise expenses without going into debt. And being retired doesn’t make you immune from surprises.
Many retirees face home repairs as their properties age alongside them. Your monthly Social Security check may not be enough to replace a water heater, or cover hospital expenses if you encounter a medical emergency.
If you’re concerned that Medicare might not cover your expenses, there are other insurance options you can consider.
Long-term care insurance offers coverage for the costs of in-home assistance, nursing homes or assisted living facilities.
Without proper planning, paying for long-term care could deplete your retirement fund. In many cases, the burden of paying for care often falls on family members – potentially straining their finances.
When considering long-term care insurance, GoldenCare offers different options based on your needs, including hybrid life or annuity with long-term care benefits, short-term care, extended care, home health care, assisted living, and traditional long-term care insurance..
If your health is excellent, you may be able to cover your health care expenses with relative ease. If you have multiple health issues, it’s a good idea to stockpile extra cash in case your bills start to mount at a time when it’s not advantageous to tap your investments.
3. You want to protect yourself from investment losses
You may have the majority of your retirement savings in a portfolio of investments that include stocks, bonds, and mutual funds. The upside of holding these investments in retirement is that they can continue to generate growth, giving you access to more money. The downside is that their value can change based on market conditions.
If you have a riskier portfolio more concentrated in stocks, then you may want more cash on hand to balance that out. If your portfolio is largely bonds, you might get away with less cash, since bonds are less volatile than stocks and can provide predictable interest payments that you can use as income.
If you’re optimizing your investments for stability, gold is typically more stable than stocks during economic downturns and recessions. In fact, gold has increased in value sevenfold over the last 100 years.
Opting for a gold IRA gives you the opportunity to hedge against market volatility by allowing you to invest directly in physical precious metals rather than stocks and bonds.
These days, you don’t even have to go to a bullion shop to buy precious metals. There are plenty of online platforms that offer a wide selection of gold and silver bars and coins and fair pricing.
Priority Gold is an industry leader in precious metals, offering physical delivery of gold and silver. Plus, they have an A+ rating from the Better Business Bureau and a 5-star rating from Trust Link.
If you’d like to convert an existing IRA into a gold IRA, Priority Gold offers 100% free rollover, as well as free shipping, and free storage for up to five years. Qualifying purchases will also receive up to $10,000 in free silver.
To learn more about how Priority Gold can help you reduce inflation’s impact on your nest egg, download their free 2025 gold investor bundle.
How much cash should you aim for in retirement?
Just as there are different opinions when it comes to building an emergency fund for your working years, the guidance varies over how much cash you might need in retirement.
Remember that it’s never a bad idea to speak with a qualified financial advisor.
Based on your expenses, needs, and investment portfolio, services like Advisor.com may help you find a financial professional who can strike the ideal balance in your portfolio so you have enough cash on hand without going overboard.
WiserAdvisor matches you with vetted financial advisors suited to your unique needs. Getting connected with an advisor through their platform is free and easy — just answer a few questions about yourself and their algorithm will match you with advisors, with no obligation to hire.
You can browse your advisor matches with WiserAdvisor’s comparison tool and book a free consultation.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
