Importance of Cash Cushion in Retirement Planning Amid Market Risks

This article discusses the potential risks of a stock market crash during retirement, particularly the sequence-of-returns risk. It emphasizes maintaining a cash cushion to cover one to three years' worth of bills before retiring, allowing individuals to avoid selling investments at a loss. Suggested strategies for managing expenses include cutting discretionary spending by 10% to 15% and considering part-time work to generate income. These steps may help protect retirement savings in difficult market conditions, which is crucial for retirees relying on market performance.