Actually, I wasn't thinking about cash to hold, but rather about cash to live on for a while.
Exactly. I started modifying my retirement portfolio two years before my "planned departure" date (early last year) and to get my cash/income position set.
As far as retiring based upon the current market, I look at that as a bit of "short-term" thinking (IMHO). I made the plan, executed the plan (invested 25+ years for retirement and modified my portfolio along the way to reflect the "stage" I was in). During that 25+ year period, there was a lot of times that I said to myself (OK, I listened to other folks ) that it was a good time "not" to retire.
In reality, I know that "these times" would come. I made plans for that (several years of income in a MM fund - which is secondary to my SPIA and VA disability income) and a healthy dose of equities for my "early retirement years".
Looking back, would I have retired May 1, '08 (I actually retired May 1, '07) during this "challanging investment period"? I believe the current "situation" would have not changed that decision. Why I say that is now that I'm in "early retirement", do I get nervous and question myself and say "I should have worked another "X" years"? The answer comes quickly, simply. NO
If you have a (good) plan, you execute it. If not, you hold on till you have a retirement plan you can feel comfortable with, regardless of the market conditions now, and in the future.
Sorry about not keeping with the OP's question (inflation/retirees) but I thought this was appropriate since it referred to the "cash comment" and no, inflation has very little to do with my "retirement life" (answered previously)
- Ron