While everyone would like to build a bulletproof plan as they prepare for retirement, factoring in all the variables can be a daunting task. There’s definitely some guesswork involved as people try to answer unanswerable questions like:

  • How long might you live?
  • How healthy will you be?
  • Will interest rates be rising?
  • How about inflation?
  • Will the value of your home hold up?

That's why financial planning experts say asset allocation—determining how much you should have in short-term cash, including money market and savings accounts, as well as longer-term cash accounts like certificates of deposits (CDs)—has never been more important.

Obviously, for people in their 20s and 30s, retirement planning, by definition, is a long-term process. But as people move into their 40s, 50s, and 60s, allocation questions become more urgent. Looking for a good place to start? Try AARP's Retirement Calculator.

Some experts say the older you are, the more likely you'll benefit from a using money market accounts or CDs as a retirement tool. "When my clients are about three to five years away from retiring, I have them start to move some of their longer-term investments into cash, which they keep in money market accounts, savings or CDs," Chris Long, CFP, of Long Financial Planning, Chicago, told Ally Bank in an interview. "They'll need access to cash in retirement. And by regularly doing this, we don't have to worry about them having to sell an investment when the market is down. The idea is that if there is a downturn in the market, they'll be fine. They can just continue with their retirement plans, and wait for the market to recover without having to sell anything."

With consistently competitive CD and money market interest rates across the board, as published by Bankrate.com, Ally Bank might be the perfect place to create some retirement plan synergy. Learn more about our Ally Bank Money Market Account and the full line of CD accounts we offer. Visit Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559).

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