warren buffettWhen Warren Buffett speaks, we listen, and the latest edition of AARP The Magazine—always a particularly solid read for its tips-laden Money Report—has 10 lessons gathered from the legendary investor on building a retirement portfolio. The excellent article by Dan Caplinger begins with this lesson:

Hold plenty of cash for emergencies—and for opportunities

”If you’ve ever gotten into an unexpected financial jam, you know how useful a rainy-day fund can be. And making the transition from a career to retirement requires a big adjustment. Your cash needs evolve as you grow older. Rather than relying on a regular paycheck, retirees have to count on Social Security and whatever cash their nest egg generates. Set up a larger emergency fund so you can better weather any financial tempests. And, as Buffet has, tap the fund as needed to take advantage of lucrative investment opportunities—when most other investors cannot.

“Be patient with your cash, and you’ll always be in a position to take action and invest at the best possible time.”