Ep 22: Is Having ‘Cash’ Good or Bad

The Concept:

Of course we all want to have a healthy bank account and feel the security of knowing we have money at our disposal. Having plenty of cash on hand can help in the event of an emergency but building up your account too much can actually be a detriment to your retirement. Let’s talk about the situations where cash can be a benefit and the times when it can hurt you.

Click the timestamps below to skip around to specific topics in the episode.

The Reality of the Matter:

We all love to open up our bank statement and see a nice, healthy number staring back at us. It gives us a sense of comfort and security.

But when it comes to retirement planning, is having cash a good thing or bad thing?

That’s what we want to discuss on this episode of the Retirement Reality podcast. Mike Kojonen will explain the pros and cons to having a lot of cash in your portfolio. Sure, it’s great to have that money on hand for emergencies or large purchases but what about the long-term growth you’re missing out on?

Mike will explain how having too much cash can slowly cause you to go broke over time because of inflation. And if you’re someone that worries about putting that money into the market because of the volatility, Mike has shares some other options that might be available to you. Making money work for you rather than against you is an important part of having the retirement you want.

Along with the conversation about cash, we’ll also get Mike’s thoughts on the IRS increasing contribution limits for retirement accounts and whether this is significant for individual planning. And we’ll have some time at the end to answer a listener question about downsizing and using that extra money to retire early. Is that a good idea?

It’s all on this episode and you can listen now. Thanks for checking out the Retirement Reality Podcast. We’ll talk to you again next week.

[2:12] – In the News: IRS increased contribution limits for retirement accounts. How significant is this news?

[4:14] – It’s all about the Benjamins. Let’s talk cash.

[4:47] – What are some of the reasons you want to keep cash on hand?

[7:20] – Then when is it counterproductive to have too much cash?

[8:56] – How we work with clients on determining how much cash they need to have.

[11:23] – Does fear drive a lot of those decisions to hold onto cash?

[13:28] – What are some of the other investments outside of the market that people can put their cash in?

[15:56] – Mailbag Question: I can sell my house right now for $500,000 and I only owe $100,000. I’m only 57 so I could sell the house and use that extra cash to retire early. Is that a good idea?



Related Content:

Do You Need to Be Debt Free to Retire?

5 Critical Estate Planning Mistakes to Avoid

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