get out of stocks — move to cash?

Terry Says

OK, I understand your situation and your concern about losing money in stocks.  I don't know your actual age or lifestyle -- OR whether you hope to leave some money to your children or spouse, or grandchildren.  If you get completely out of stocks, you can avoid the risk of loss.  And, depending on your age, you can easily figure out how much of this money you can spend each year.  If you're 75, and expect to live until 90, just divide by 15!  Don't forget to include income from Social Security.  Will you have enough each year to cover your expected expenses -- including projected medical costs? Depending on your lifestyle and your time horizon, you should be able to do the calculation, or go to one of the great online calculators, listed on my home page at https://www.terrysavage.com/. BUT -- and this is a BIG BUT -- that doesn't take into account the possibility that INFLATION could devastate the buying power of your savings.  At just 3% annual inflation, your spending power will be cut in half in less than 24 years!  Yes, your savings will earn some interest, but it will be taxable, and might not keep up with inflation. Similarly, you could take all your money and buy a lifetime annuity from a good insurance company -- guaranteeing you won't run out of money in your lifetime.  But will that fixed check keep up with inflation??  Stocks historically have kept up with inflation, (over the long run), which is why most financial planners recommend keeping at least some money invested in a diversified portfolio of stocks. I'm just pointing this out to show you that going to "all cash" has its own -- different -- set of risks!  Get some good financial planning direction starting  at http://www.campaignforinvestors.org/.