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Having readily available cash or cash-like assets on hand is vital in any retirement plan. However, it’s important to determine how much to keep liquid, versus how much to put toward wealth maximization for long-term portfolio return.

Understand your options: You need to be prepared for emergencies, but holding too much cash can be a safe way to lose money in a low-interest rate environment, as your purchasing power is slowly eroded. This article discusses several alternate strategies for maintaining liquidity, which includes:

• Establishing a line of liquidity (often with a checkbook) through your brokerage account
• An equity line of credit (ELOC)
• Whole life insurance policies
• Utilizing certain hybrid investments (such as baby bonds and preferred stocks)
• Utilizing dividend stocks

Keep in mind: This article was clearly written to promote interest in dividend stocks and sell a newsletter, but that doesn’t mean there isn’t value here. What’s missing is an emphasis on how your needs will vary, depending on your life position.

If you have yet to retire, you might only be able to retain three-to-six months’ worth of expenses in an emergency fund. If you’re already retired, you may want to increase that to one-to-two years, given you’re no longer working.

Additionally, you may have extra liquid funds on the sidelines, called 'dry powder', for taking advantage of unique investment opportunities. Unique investment opportunities, especially in real estate, typically happen when the stock market loses significant value, and lines of credit can freeze up as well. As such, I would not promote those options.

My advice: Seek professional guidance, because your liquidity position should be as unique as you are.