Episode 50: Can You Have Too Much Cash? and Planning For The Things You Hope Don’t Happen

how much cash do you need

It’s Episode 50 of the Big Picture Retirement show! It’s also the monthly listener questions episode, where Devin and John answer questions submitted by listeners like you.

The first question is from Stacey in Maine. She asks Devin, “How much cash do I really need?” Now, she’s not talking about paper folding money, but rather money that is easily accessible, like savings accounts. Her financial advisor has recommended 3-6 months of her expenses, but she’d like to have a little bit more.

Devin points out that it really comes down to what keeps you up at night? What will help you feel comfortable?  You can have too much in liquid funds, especially if you need to be generating some income.

Another thing to consider: What are your possible needs for immediate money? Cash needs are quite different for someone who has a reliable fixed income and not a lot of things that could come up. What are the deductibles on your insurance policies, and how much would it cost you to replace a major appliance or one of the major components of your house?

For a working individual who relies on their income, the 3-6 months rule of thumb is usually pretty good. But if you’re already in retirement, and have a set income, then 3-6 months expenses might be too much.

The second question has a surprising answer. Ron, from Portland, wants to know what to do with his personal trust now that the beneficiaries are responsible adults. Does he still need this estate planning tool, or can he just have the trust terminate at his death?

John thinks that Ron is falling into a common trap. John’s two rules:

  1. Never, ever plan for today’s circumstances are today, and
  2. Never plan for a current situation that you hope continues

Instead, you should plan for the future, and you should plan for situations that are different from today. There are so many things that could happen:

  • Ron could outlive one or more of the beneficiaries
  • Any of the marriages could end
  • The beneficiaries could become disabled
  • They may have personal liability

John’s solution: to adjust the trusts to include some safeguards, and make the beneficiaries the trustees of their own trusts.

On a side note, Devin asks John, “How often should folks have their estate plans reviewed?” John believes once a year, or any time there is a major change. Perhaps it’s just a phone call or an email to check in. Some of this is based upon your age and stage in life.

Highlights include:

  • The security of items in your safe deposit box
  • Where John keeps his cash money
  • The unintended consequences of leaving inheritances to folks directly

Resources mentioned in this episode:

Devin and John’s free ebook:

Don’t forget to subscribe to the show, and leave a rating and a review!

Do you have a question for Devin and John?  Send them to  They’ll do their best to