Here’s How Much Cash You Should Have Available When You Retire

It is difficult to predict the amount of money that retirees will need to prosper in golden years. There are healthy costs, housing costs and grocery stores that must be observed – and this is without setting a budget for any rewards or other estimated expenses. Everyone differs slightly when it comes to knowing exactly what they will need during retirement years.

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The famous financial expert SUZE Orman has a recommendation that can help to direct retirees when calculating the needs of the future. Here is the advice I gave in a recent episode for women and money about the amount of retirement.

Before many people retire, they evaluate what is in their retirement accounts to get an idea about how much they must spend in the coming years. Orman highlighted that these accounts are subject to the health of the stock market, so that they can significantly decrease at any moment.

Orman said in the podcast: “It is not always that the arrows decrease and the bonds rise, or the bonds decrease and thus the stocks rise. Sometimes everything can decrease,” said Orman.

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To protect himself from the fluctuations of the stock market, Orman recommended that there is no less than three to five years of living expenses in an account that can be easily spent without the need to sell any shares or bonds.

This can be a retirement account, verification account, or high -return savings account. The important factor is that its amount is not affected by the stock market. In this way, if the market is disrupted, you still have part of the money that is not affected and accessible to living expenses.

It recommends this because if the stock market takes a huge decrease, it may take three to five years to recover.

Orman said: “If you really want to be on the safe side, it will be five years.” “If you just want to play it until you have at least three years, well, you can do it too. You may divide it and do four years.”

For those planning to retire in the near future and try to build this cash reserve, Orman recommended looking at the individual portfolio and seeing stocks that do not work well.

“The markets are very high at the moment. If you know that you will retire soon, you will take them from the stocks that you did not perform, or you will not do in your opinion … and do so from there,” I suggested.