Retiring in 2026? Here's How Much Cash You Should Have on Hand.

Core Insights - Individuals preparing for retirement in 2026 face critical decisions regarding Social Security claims, Medicare enrollment, and investment portfolio management [1] Investment Strategy - Many retirees consider reducing stock exposure to minimize portfolio volatility, but this may be a mistake as stocks are essential for long-term growth [2] - Maintaining a stock investment is crucial to ensure sufficient withdrawals from retirement accounts like IRAs or 401(k) plans [2] Cash Reserves - It is advisable for retirees to keep cash reserves equivalent to two years of living expenses to weather potential stock market downturns [4][5] - For example, if annual expenses are projected at $60,000, maintaining $120,000 in cash is recommended [4] - This strategy allows retirees to avoid selling investments during market declines, thereby preserving their savings [5] Cash Management - Cash reserves should not remain idle; retirees are encouraged to utilize high-yield savings accounts or CD ladders to earn interest on their cash [6] - The amount of cash needed should be influenced by portfolio composition, Social Security benefits, and individual risk tolerance [6]