What is safe money – and how much of your retirement savings should be protected?

Not all of your retirement money needs to work the same way.

Here is a framework many of our clients find useful.

Think of your retirement savings in three buckets:

Safe money — Protected from market loss.

Generates reliable, guaranteed income. Covers your essential monthly expenses: mortgage or rent, utilities, groceries, healthcare.  

Growth money — Invested in the market.

Longer time horizon. This is your inflation hedge and your legacy.

Liquid money — Cash and short-term savings.

Accessible without penalty. Covers emergencies and near-term spending.

Most people approaching retirement have the vast majority of their savings in growth money. That worked fine when you had 30 years of working income ahead of you. It is a different calculation when you are 7 years from needing to draw that money down.  The question is not whether to take money out of the market. It is which money, and when.

A Fixed Index Annuity is one of the most common tools used to fund the 'safe money' bucket — but it is not the only one.

Our advisers will help you identify the right allocation for your specific income needs, timeline, and risk tolerance.