A lot of retirees are wondering how they should react in the current economic crisis. My “Top Five” list of things for retirees to consider (or at least what I’ve told my retired parents) includes the following:
1. Some of your portfolio should be in cash. For years, long before this crisis broke, Vanguard’s experts and others have recommended that retirees consider holding 6-12 months’ worth of annual expenses in a money market or other liquid account. More than 6-12 months may be appropriate only if you’re really risk-averse or extremely pessimistic.