Ashley Temer is a Financial Representative with Northwestern Mutual who helps professionals, families, and business owners plan for financial security. She’s here for your “Money Minute.”
Do you have cash reserves for your retirement? The purpose of a cash reserve is to provide you with the income you need to meet your living expenses and is a key component of your retirement portfolio.
Your retirement savings can funnel into your cash reserves from income-producing annuities, dividends & interest generated by investments, and liquidating investments at opportune times. Cash reserves can also come from other income sources such as cash value life insurance, social security, or a pension.
Once established, you can choose to withdraw funds from your cash reserve on an on-going basis to create a regular income stream. Some benefits of establishing a cash reserve are the case provides a reliable, steady income. This offers liquidity and flexible access to your funds, and it helps you avoid having to sell investments in a down market.