What Is Safe Money in Retirement Planning?

By Brent Meyer — SafeMoney.com Founder & Editor Reviewed by Licensed Financial Professionals  |  SafeMoney.com — Trusted Since 2011  |  Updated Regularly Quick Answer: Discover what safe money means in retirement planning. Learn how to protect your savings with guaranteed solutions. Explore more at SafeMoney.com. Chances are you have heard of “ safe money ” at some point. From financial talk shows and radio commercials to television broadcasts and retirement seminars, it’s a concept that is all over the place. “Safe money” is commonly defined as the money you can’t afford to lose. But for those of us approaching retirement, what does that mean in real-world terms? Many advisors explain safe money in investment terms. For example, it could mean discussion of “safe money investments,” or vehicles with less exposure to market volatility. A downside with this approach is its investment planning focus . We have discussed how retirement planning should emphasize monthly income over asset values in its goal-setting. After all, retirement is a life stage in which we draw on a nest egg and other income sources for income – wealth we have accumulated over many years for this timespan. So, when discussing “safe money” in retirement, we shouldn’t frame it in terms of only the possibility of money losing value. Here’s a quick look at what “safe money” – or money you can’t afford to lose – looks like when we frame it in the discussion of retirement income planning. This can help bring greater clarity to the planning process for a secure, financially confident retirement future. The Basis of Retirement Income Security Let’s consider this in the context of income security, first. When it comes to retirement, Americans may have financial goals for two critical junctures: The span of their retirement years, and The point when they transfer their wealth to loved ones upon passing away. During the retirement years, we want to have the financial resources to live comfortably. It is a matter of having money for lifestyle expenses, or what it costs monthly to maintain our desired style of living. Of course, there are other expenses besides monthly living costs. Vacation getaways, traveling for family events, helping grandchildren or family members with college education costs, or personal retirement luxuries are some miscellaneous expenses. In the case of wealth transfer, financial goals may be two-fold: replacing the lost income of the deceased party for