A woman once came to my office and opened her checkbook, telling me she had about $300,000 in her account. I asked why she felt she needed that much in a checking account.

“I have it there for emergencies,” she explained.

Few of us need access to all of our money at one time. Holding on to $300,000, a large amount of liquid assets, is often squandering potential. The price of liquidity is a low rate of return, and low growth means that inflation may overtake you.

Don’t Overlook This Big Retirement Risk

Keeping direct access to all of your cash is a depression mentality: Some of those who endured hard times held on so tightly to their money that they sacrificed growth and eventually succumbed to the ravages of inflation. Remember your Grandma saying, “A dollar doesn’t buy what it used to buy?”

Be wary of the depression mentality as you approach retirement. If you have a hard time letting go of your liquidity, a financial advisor (www.familywealthadvisory.com) can help by creating a written retirement income plan that spells out the details and strives to make you feel comfortable with your potential future income growth.