At Hoffman Financial Group, we get asked this question all the time: “How much cash should I have in my portfolio?”

It’s a good question, but here’s the problem. Cash loses its value due to inflation, which can automatically drag the value of your portfolio down over time.

Think about it this way. How much was your phone bill 10 years ago? What about your TV bill? The money that paid for your bills 10 years ago would only pay a fraction of your bills today. That’s the unfortunate power of inflation.

Remember the euphemism “a penny saved is a penny earned”? That’s not necessarily true in a few years because of inflation. And inflation means if you’re not actively making money, your retirement accounts are actively losing money every day. There is no standing still with your portfolio.

That’s why we believe cash is dead. In fact, we consider cash a potential danger to your retirement future. Because if you’ve parked your money in cash and aren’t putting your wealth to work, inflation will end up bringing down the value of your assets.

But you might ask, “If I’m in retirement and I put my cash to work, doesn’t that mean my money would be at risk?” That’s a great question that everybody needs to ask.

What if you could put your money to work AND be protected from loss at the same time? Market-protected index investing offers you participation in the market while also allowing very conservative risk. A good goal is to make at least 3%-5% on the money you have invested. Our team can help you find the best option for you so you aren’t losing value to inflation.

The truth is you need to be careful with large sums of cash in your portfolio. It can be detrimental not only to your income but also to your future. There are other options you can consider that will not put your market at risk but will allow your money to last longer and beat inflation.

If you’ve got a large amount of cash you’re pulling from, call our office today at 888-239-5880. We want to help put that money to work so you’re in a better position for your retirement.

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