Evaluating Investments - Question 21

How much do you recommend I maintain in cash for quick access? I am 63 years old.

A good rule-of-thumb is to maintain three to six months’ worth of living expenses in cash or money market funds. As one becomes older, there is a tendency to maintain larger amounts in cash. You should maintain an amount that you feel comfortable having in cash. Some retirees take this to an extreme and maintain two to three years' worth of living expenses in cash or money market. It's probably not a good idea to maintain this much money in cash or money market funds because it will not grow as fast as the rate of inflation.