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Mark Cuban's 6-Month Rule Every Near-Retiree Should Follow Right Now

Get the rule to reduce risk in retirement.

By Josh Koebert , Edited by Laura Hohenstein

Updated Aug. 17, 2026

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Shark Tank notable Mark Cuban has a savings rule he thinks everyone should follow, and it can help you if you find yourself in a jam. This advice isn't just for those hedging against layoffs or catastrophic health events. It can keep anyone from making permanent (and possibly costly) money moves under pressure.

Learn about his cash-stash rule, why it's essential to include in a retirement plan, and how you should keep that money secure until you need it.

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What is Cuban's six-month savings rule?

Cuban says to keep at least six months of income in accessible cash. That way, you aren't thrown into poor decision-making from a job loss, move, or other unexpected problem. If you're within a few years of retiring, it's an especially useful rule, as it becomes a buffer against health costs, home repairs, inflation surprises, and even market downturns.

With fewer years to recover from mistakes, the buffer helps you remain calm and carry on with your original retirement plan in place.

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Why retirees need even more cushion

This six-month rule isn't retiree-specific, but it's even more applicable. Specific risks that show up later in life threaten to drain your bank account in ways beyond simple "emergency fund" needs. As you get close to retirement, you'll have fewer years to earn income, get raises, and make market miscalculations. So, while you don't have to do everything perfectly, there's less flexibility for the size and timing of your withdrawals.

Another factor to consider is the sequence-of-returns risk. If the market falls early in retirement and you continue selling investments to use as spending money, you might lock in losses and permanently reduce your portfolio. This cushion, ready to go when you reach retirement, reduces that risk.

How to size the cushion

Some experts consider Cuban's six-month rule to be a floor rather than a ceiling. If you aim for a full year of essential expenses, you'll have even more peace of mind in case of job loss or health surprises.

Use this simple method to figure out how much you'll need. First, calculate essential monthly expenses only, such as food, rent/mortgage, utilities, insurance, transportation, debt, and health care costs. Don't include travel, gifts, shopping, or eating out at restaurants. The goal is to cover bills that would force a bad decision if you found yourself without enough money.

Take that number and multiply it by six for your minimum cushion. That's the number to start with, and if you want even more flexibility, work to put away up to twelve months.

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Where to put the money

Cash should be liquid, easily accessible when needed, and relatively protected. Good examples include high-yield savings accounts, money market funds, and short-term CDs. These earn some interest, preserve principal, and still allow you to make withdrawals if necessary.

Carefully review the terms and conditions for each option, however. Some accounts (like CDs) don't let you take all the money out without penalty, and different banks offer different interest rates for more compounding power.

The highest rates are not always the best choice if the bank creates delays in getting your money, charges fees, or adds confusion when your money is needed most.

Keep the cash separate

Another smart move is to keep the reserve in a separate account from your everyday checking or savings accounts. This keeps it from being spent on routine bills. You can label it in your budget software as "retirement safety cushion" or "buffer" to remind you what it's for.

Check it at least once a year to make sure it still aligns with your anticipated expenses. As costs rise over time, you may need to adjust this amount upward. It's also a good time to review allocation between a savings account, money market fund, or (if you don't need it for a few months) a CD.

Why liquidity matters more than the highest return

The six-month reserve's job is to be available, not offer the highest growth. For near-retirees, the main value of cash is that it can be used right away without dipping into the portfolio. Compared to money in stocks or long-term bonds, this cash can be accessed immediately, without waiting for a sell-off, and you don't have to time the market to get the most cash.

Sound boring? It should. The cushion's job is to keep a retiree from making a rushed, irreversible decision because the only available money is tied up elsewhere.

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Bottom line

The five years before retirement are the "danger zone" in that, if you don't have enough cash for emergencies, you may need to change your retirement plan altogether. Workarounds include trimming spending, delaying withdrawals, and postponing discretionary purchases during a downturn.

However, a proper cash reserve reduces surprising retirement mistakes and keeps you from going too far from your original plan. For this reason, it's more than an emergency fund; it's a timing tool that helps your retirement portfolio survive the first shaky years, when damage is hardest to undo.

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