In today’s economy, having too much money sitting in a savings account might actually hurt your finances. While it’s still important to have an emergency fund—usually enough to cover 3 to 6 months of living expenses—keeping more than that in cash can mean your money loses value over time. This is because inflation, which is the general rise in prices, is about 2.9% as of August 2025, while most savings accounts only earn about 2% interest. That means your money isn’t growing fast enough to keep up with the rising cost of living. Instead of holding extra cash, experts suggest putting it into smart investments, like stocks or bonds, which can offer better long-term growth.

In times of economic uncertainty and market swings, protecting your retirement savings becomes more important than ever. According to retirement expert Kourtney Gibson from TIAA, the best time to prepare is before a downturn happens—not during one. Gibson recommends making sure your investments are well-diversified, meaning your money should be spread across different types of assets (like stocks, bonds, and real estate) and even within those groups. This helps reduce the risk of losing too much if one area of the market drops. She also highlights the importance of building steady income sources for retirement, so your financial future stays secure even when the economy is shaky.