How much cash should I keep to protect against a market drop early in retirement?

A common approach is holding one to three years of spending in cash or short-term bonds so you can pause selling stocks during a downturn and let them recover. If your portfolio needs to cover $60,000 a year after Social Security, that's roughly $60,000 to $180,000 kept safe. This cash buffer is the front line of defense against sequence-of-returns risk: when markets fall, you spend the cash instead of selling depressed shares, then refill the buffer in good years. Too much cash creates drag on long-term growth, so most retirees size it to their comfort level and refill it opportunistically rather than on a rigid schedule.