I keep 20 percent of my retirement savings/investments in a cash equivalent (money market). When I hit 45 years of age (ahem), I’ll start shifting slowly but surely to 40 percent cash by the time I’m 65.
The market will not always go up. Cash works like toddler-floaties when the market goes down, especially fast. It keeps your chin just above water. So even as many of us get encouraged by the market’s recent Miracle-Gro climb up, protect yourself just enough on the road to retirement. This too shall pass but remember, may we all be blessed enough to live through several more recessions because history says they’ll a’come.