Quentin Fottrell

Mon, May 12, 2025, 9:33 AM5 min read

A while back, I had people coming unglued on me when I suggested retirees should have three to five years of savings in a money-market fund or CDs. Suze Orman said a “just-in-case” fund should not be tied to the market, so you won’t have to sell investments if things go sideways.

Orman, on her podcast, spoke about accessing money during retirement. “What if the market has crashed at the time that you want to do that? Because it’s not always that stocks go down and bonds go up or bonds go down and, therefore, stocks go up.”

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She said it can take three to five years for the stock market to drop and return to its previous level after a significant downturn. “So if you really want to be on the safe side, it’s five years,” she said. “If you want to just play it so that you have at least three years, OK, you can do that as well.”

Apparently, I’m in good alignment with experts. What do you think?

MarketWatch Reader

Don’t miss: ‘Retirement is within my grasp’: I’m 57, my 401(k) is dropping and I’m feeling anxious about a recession. What can I do?

If life has taught me anything, it’s that anything can happen. Anything. It’s pretty scary, if you care to think about it too much. If we were constantly living in a three-to-five-year emergency-fund frame of mind, for example, we’d probably never get out of bed. Of course, that does not mean we can’t plan for worst-case scenarios, and it would be nice to have a cushion with that much support.

Some readers might have built up three to five years of savings through sheer hard work, low-cost living and, perhaps, a spell of high earning. It’s nice when it happens (if it happens) but along comes a need to have a new car, a down payment on a home, or an elderly relative who needs long-term care and doesn’t have a house to sell, and the money seems to go as quickly as it arrives.

I listened to part of the podcast you referenced in your letter. Suze Orman was speaking about taking money from lower-performing investments in order to build up those cash reserves and/or a little from higher-performing investments, so you’re not going to get stuck having to withdraw large amounts of money from your investments in a down market.