How much cash should I keep in retirement?
No rule sets the right amount. A cash reserve exists so that near-term spending, known bills and taxes can be paid without being forced to sell investments at a bad time.
The amount is a planning judgment based on how much of your spending other income already covers, upcoming large expenses, tax payments, RMD timing, how the rest of the portfolio is invested and how comfortable you are with market swings.
Holding more cash adds stability but gives up potential growth. Holding less keeps more invested but makes withdrawals during a decline more likely. A reserve does not remove investment risk, and it cannot ensure that nothing will ever need to be sold during a downturn.
Reviewed by Bay Area Wealth Advisors. Last reviewed 2026-10-02. Educational information only — not individualized financial, tax or legal advice.