If you are retired & receiving SS Income, Annuities, Pensions already, that meets your basic needs - how much cash do you carry in checking?

[swakyaby]

I have a non-interest-bearing checking account with $3k - $5k and use that bank’s reward Visa (card sits in my desk drawer) to autopay recurring monthly bills. The rewards points are used to purchase theater tickets and popcorn. It keeps the account active.

My real working checking account is Fidelity CMA with approximately $10K-$20K linked to a much larger Fidelity mm and Vanguard mm. I never intended to have so much cash sitting in money markets, but the stock market has caused dividends and capital gains to increase my cash holdings. It’s a good problem to have, but a bit embarrassing to admit how cash heavy my portfolio has become.

 

[jazz4cash]

Our monthly bills are about $20K a month, some months are even higher because of lumpy expenses. We don't want to stress over lack of ready cash.

I pay most of my bills from Hi Yield savings that pays ~3% interest. That’s ready cash too. My checking accounts pay between 0 and 0.01%.

 

[jazz4cash]

I'm sure that " could" happen but it seems a bit far fetched to me. Using your debit card at a gas station seems much higher risk to me.

How so? I don’t use debit cards but I didn’t think the vendor would get your account and debit info.

 

[RetiredHappy]

How so? I don’t use debit cards but I didn’t think the vendor would get your account and debit info.

Skimmers can read off the card.

 

[jazz4cash]

Skimmers can read off the card.

That still fits the narrative of risk to funds sitting in checking accounts

 

[RetiredHappy]

That still fits the narrative of risk to funds sitting in checking accounts

Different risk factors.

 

[Koolau]

Not wrong, just unnecessary work...

Sorry for asking, but what is the alternative that requires less w*rk? Something on a phone, no doubt.

 

[ncbill]

People do know one can use an app at most fuel pumps?

I use a BP/Amoco one with a flat per gallon discount.

Currently the highest discount offer is $0.25/gallon off on Fridays.

Payment info stored in the app, no worries about skimmers.

 

[jollystomper]

...

My question is for retirees who already have a steady monthly paycheck in retirement,
and you're able to withdraw from your 401k or IRA in 1-2 days ....
how much CASH do you have in your checking account for emergencies to feel Safe,
in spite of all your monthly cashflow coming in at the beginning of each month?
...

We keep very little. We have checking and savings account at a local credit union where my pension is deposited and our bills are paid from (my paycheck used to be deposited there, and DW is familiar with the bill paying outline here, so I have not yet changed to another bank). Checking account pays no interest and savings pays very little. After the regular are bills paid, we keep <$200-$300 in checking. We keep about $5K in savings.

In 7 years of retirement we have yet to have an emergency that required anything near that to be withdrawn the same day. My "walkaround" cash is usually $50. Same day unexpected expenses are almost always handled by CC. I think the "worst" was a $1000 repair that we had to pay by check. We have high yield savings account from which we can transfer money in 1-2 days, and that works fine for us. For example, we schedule our bills to be paid soon after my pension is deposited. Since we do this about a week beforehand, we know if the pension will cover them or not. If it will not, we schedule a transfer from the high yield savings to be deposited the same day as my pension to cover the bills.

 

[jazz4cash]

People do know one can use an app at most fuel pumps?

I use a BP/Amoco one with a flat per gallon discount.

Currently the highest discount offer is $0.25/gallon off on Fridays.

Payment info stored in the app, no worries about skimmers.

I only know about paying by app at the membership clubs (BJs and Sam’s Club). What are the other apps? Also wrt physical cards there are RFID skimmers that are contactless. (Sorry for contributing to the hijack)

 

[TheWizard]

Sorry for asking, but what is the alternative that requires less w*rk? Something on a phone, no doubt.

I can take a look at my checking account activity and balance on either my smartphone or my PC.
My smartphone is more convenient and I logged into my account earlier to see if my SS payment had arrived yet; it did.

And over the past 30 days, I had fourteen transactions in my checking account, all of which were purely electronic, no paper checks.

Now I could copy all of those transactions into my checkbook register and combine them with the previous balance to get my current balance.
But my credit union has already done that arithmetic so there's essentially no value in my replicating it...

 

[TheWizard]

I only know about paying by app at the membership clubs (BJs and Sam’s Club). What are the other apps? Also wrt physical cards there are RFID skimmers that are contactless. (Sorry for contributing to the hijack)

In the New England area, we have Cumberland Farms gas stations and I get a 10 cent/gallon discount when using their app on my smartphone. Payment is pulled from my checking account automatically...

 

[jazz4cash]

In the New England area, we have Cumberland Farms gas stations and I get a 10 cent/gallon discount when using their app on my smartphone. Payment is pulled from my checking account automatically...

Thanks. I found one for Shell that I can link to 5% cashback credit card. I found others but reluctant to link to any third party apps like Gas Buddy or Upside. Main benefit for me is convenience.

 

[Gumby]

I'm retired. I don't need to do things as quickly as possible, and I hate being tethered to a phone. In my life, the only real use for my phone is to get the two factor authentication code, which is why it sits almost permanently next to my desktop computer. I never carry it around.

 

[Out of Steam]

Except for an unusual expense, we never have more than $7K in checking. Another $7K or so is in a savings account at the same bank. While that savings amount is growing, we don't plan to let it increase much more.

If need be, we can move money from a high-yield savings account in a few days.

 

[jazz4cash]

OP used the term checking account but I’d substitute the term “spending accounts”. Growing up all mom and dad had were checking and savings accounts at the bank or credit union. I remember in the ‘80’s mom got something called a money market account that was not a local account. Back then passbook passbook saving accounts at banks paid ~5% but S&L accounts paid a bit more. Checking paid 0%. Those rates were regulated and everybody paid the same IIRC. Now days we spend from regular or high yield savings and money market accounts as if they were checking accounts.

 

[SnowballCamper]

The maximum in the checking account would be two monthly "paychecks". After each paycheck the excess is transferred out to savings or brokerage, depending on the next planned lumpy expense.

 

[Finance Dave]

We keep about $12-$18k in checking. That covers about 3 months of spending when combined with my modest monthly pension. Given that I can get funds from FIDO within about 2 days, there's not much sense in keeping any more in checking (bank pays 1%, FIDO pays ~4.1% currently - FZDXX).

 

[Original Wally]

Around $30k in checking. Plus another CD (subject to a penalty if w/draw early) of $25k. Savings account of $7k. AND another $10k in a different credit union - all liquid.

In Vanguard, almost all invested out. Nil cash account.

If a HUGE item came up, sell some bonds or something, I suppose.

We GENERALLY run $500-$1,000 positive each month from CalPERS pension + Social.

Follow up: DW Molly & I just had a finance committee meeting. Will move probably around $55k of our roughly $70k cash to VG - should pick up around $1.6k a year in additional income. To keep liquidity will probably keep it in a short CD ladder - 3/6/9 & 12 month maturities. <- depending on the yield curve, maybe mostly really short. Thanks t OP for the post. I have been lackadaisical about cash management.

 

[audreyh1]

Sorry for asking, but what is the alternative that requires less w*rk? Something on a phone, no doubt.

Quicken on my laptop tracks all that for us. We write very few checks. 0 or 1 per year the last few years. Thus year we wrote a few more for the house builder plus DH wrote his first QCD check. All our monthly bills are paid via automated electronic billpay, and even the occasional ones usually have a way to pay online.

I usually enter them in Quicken but even if I don’t they get downloaded as part of the transactions downloaded into Quicken.

Also all the regularly scheduled annual and monthly electronic bills are scheduled as regular occurring bills in Quicken, and I just need to confirm payment and adjust the amount if needed.

 

[Jerry1]

We keep around $10K in the checking but we also keep a good amount in a savings at the same credit union which, while paying some interest, doesn’t pay a lot more than the checking account. I should probably adjust the balance, but I like having a ready supply of cash available and separate from my brokerage in case something happens where I can’t access the brokerage account. Given that our needs are met with SS and pension, the amount in the credit union is about 3 - 4 years of expenses over and above or current income.

 

[Time2]

To much, but I don't care.
Before we started SS, I would do my maximum IRA withdrawal staying the 12% tax bracket. put about a years spending into checking and put the rest into a Roth Conversion. Then just spend it down over the year. We started this year with $7,000 in checking. I transferred $40k in March, I thought we were buying a truck, we didn't. We started SS in April, as of today I have $41.5k. SS seems to be covering our expenses! It is probably a good time to write a $19,000 gift to my son, he is still way behind his sister after we paid her dental school tuition. Glad this thread gave me a timely reminder.

 

[YellowSubmarine]

I carry between 4-$7,000 in checking. This account is also my electronic bill pay for nearly everything. Also SS and my fracking royalty payments go there directly.