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Cash Wedge Strategy

When markets are volatile, it makes a significant difference whether you are accumulating assets or withdrawing from your portfolio. The aim of the cash wedge strategy is to allocate a portion of your portfolio to cash to help meet your current income needs, and diversify the rest of your portfolio so you can benefit from market growth.

Cash Wedge Strategy infographic on a desk

The cash wedge strategy helps protect your retirement income in times of volatility.

Retirement Income Sources

Sources of income, like those from your investment portfolio, are dependent on factors such as how much you have accumulated, the type of investments, how much you withdraw and when.

When markets are volatile, it makes a significant difference whether you are accumulating assets or withdrawing from your portfolio.

Protecting Your Retirement Income

The cash wedge infographic demonstrates how implementing a cash wedge strategy helps to provide a reliable income stream, while also investing for long-term growth that offsets inflation and manages other risks including:

  • Sequence of returns risk
    It helps reduce the risk of having negative returns in your portfolio at the beginning of your retirement and during retirement.
  • Liquidity risk
    The cash wedge strategy increases liquidity so you can manage short-term income needs or unexpected expenses.
  • Volatility risk
    The strategy helps protect part of your portfolio by ensuring your short-term income is not exposed to market declines.
  • Diversification risk
    It allows the rest of your portfolio to be appropriately well-diversified, to meet your long-term income and growth needs.

Everyone’s financial situation is different and this infographic will help start the conversation about long term retirement income planning.

This infographic is included in FreshPlan software and is also available as a print-ready or web-ready piece. For more retirement resources, see these related infographics:

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Several companions calculators help to illustrate various scenarios to help you plan for the year ahead. Companion calculators include:

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