The "cash bridge" may be one of the most expensive retirement mistakes nobody talks about.

Many advisors recommend holding 2–5 years of cash in retirement so clients don't have to sell investments during market declines.

On the surface it sounds logical:

"Keep cash on the sidelines and avoid selling when markets fall."

Safe? Maybe.

Efficient? Often not.

Here's why:
1️⃣ You're locking in a loss against inflation
Cash may feel stable, but stability isn't the same as preservation. If inflation averages 3–4% and cash earns less, purchasing power quietly erodes year after year. You don't see the loss on a statement. But your future spending power sees it.

2️⃣ The opportunity cost can be enormous
Every dollar sitting in cash is a dollar not compounding.
The problem? Some of the market's strongest days historically occur shortly after its worst days. Miss those periods and long-term retirement outcomes can change dramatically.

3️⃣ It doesn't eliminate sequence risk — it often delays it
Eventually the cash bucket gets depleted. Then what? Retirees may still need to sell assets later, except now they've potentially sacrificed years of compounding along the way.

4️⃣ Cash is often used as a substitute for portfolio design
A stronger approach isn't simply adding more idle cash. It's building a portfolio designed for multiple economic environments and structuring withdrawals intelligently.