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WASHINGTON (AP) — The Trump administration has reached a multi-state settlement with chemical giant Chemours Co. over years-long, illegal discharges of synthetic “forever chemicals” used to make products resistant to water, grease and stains. The settlement is the first by the federal government to resolve enforcement claims against a manufacturer of harmful chemicals known as PFAS.

The Associated Press learned details of the settlement ahead of an announcement expected later Wednesday.

Under the agreement, Chemours will pay a civil penalty of $22.5 million for alleged violations and spend $90 million over 15 years to mitigate PFAS discharges in three states: West Virginia, North Carolina and New Jersey.

Chemours, a spin-off of chemical maker DuPont, also agreed to install PFAS pollution controls for and surface water discharges and air emissions at a West Virginia facility; supply clean drinking water to communities near its West Virginia and New Jersey sites; and implement controls to reduce releases of PFAS and other toxic chemicals from its facility in North Carolina.

Combined, the penalties and relief programs are estimated to cost about $450 million, the Justice Department said.

The settlement allows Chemours to continue manufacturing PFAS for commercial and military applications while preventing future contamination and protecting communities from existing pollution, said Adam Gustafson, principal deputy assistant Attorney General for the Environment and Natural Resources Division.

“The Trump administration recognizes the important role of Chemours for it commercial and military obligations,” Gustafson said in an interview. “The settlement protects public health while preserving that important balance.”

The settlement against a major PFAS manufacturer “delivers on the Trump administration’s promise to make polluters pay and stop PFAS contamination at the source,” said Jeffrey Hall, assistant EPA administrator for enforcement and compliance assurance.

The agreement will greatly reduce PFAS contamination of water, land and air and even begin to mitigate past harm, Hall said. “This settlement brings Chemours into compliance with the law and holds it fully accountable,” he said.

The settlement comes as the Trump administration is expected to propose softening Biden-era limits on “forever chemicals” in drinking water, while delaying but keeping tough standards for two common types of the substance.

The proposal will start the formal process of rolling back parts of the first-ever limits on PFAS in drinking water finalized during former President Joe Biden’s administration. Officials at the time found they increased the risk of cardiovascular disease, certain cancers and babies being born with low birth weight.

The agency is committed to addressing Per- and Polyfluoroalkyl substances (PFAS) in drinking water while following the law and ensuring that regulatory compliance is achievable for drinking water systems, EPA Administrator Lee Zeldin said.

The settlement determined that facilities Chemours operates in the three states have discharged PFAS into the Ohio River, Cape Fear River and Delaware River, respectively, in violation of permits required by the Clean Water Act and state laws. Chemours also violated legal requirements under the federal Toxic Substances Control Act at all three facilities.

As a result of the alleged violations, people living near the facilities were exposed to illegal PFAS, officials said. PFAS are widely used and found around the world, with scientific studies showing that exposure to some PFAS in the environment may be linked to harmful health effects in humans and animals.

The violations continued for over a decade, the Justice Department said. The facilities were previously owned for many decades by DuPont. The settlement announced Wednesday does not resolve DuPont’s liability for past PFAS violations, officials said.

A federal judge last year ordered Chemours to stop discharging unlawful levels of cancer-causing chemicals into the Ohio River from the company’s Washington Works plant in West Virginia. The pollutants endanger the environment, aquatic life and human health, U.S. District Judge Joseph Goodwin wrote in the August 2025 order.

The West Virginia Rivers Coalition had asked Goodwin to require the company to immediately comply with its permit limits after violating them for more than five years.

DuPont, Chemours and another company, Corteva, agreed to pay New Jersey up to $2 billion last year to settle environmental claims stemming from PFAS. The federal settlement does not affect the state case.

The federal consent decree calls for 14 specific treatment systems to reduce PFAS in wastewater, stormwater and groundwater from the West Virginia plant. Chemours will test drinking water near the West Virginia and New Jersey sites and provide treated or alternative clean water.

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By Jonathan Stempel

June 24 (Reuters) – Pfizer has been dismissed as a defendant in a sweeping antitrust lawsuit in which most U.S. states accused dozens of drugmakers and executives of fixing generic drug prices.

In a decision on Tuesday, Chief Judge Michael Shea of the federal district court in Connecticut said the states failed to show that Pfizer and its former Greenstone unit conspired with rivals between 2010 and 2014 to rig bids and allocate customers for six drug products.

These included generic versions of Eplerenone tablets for high blood pressure, Latanoprost drops for glaucoma, and four versions of Clindamycin phosphate for acne.

The states alleged that Greenstone executives exchanged more than 360 phone calls and text messages with the Swiss drugmaker Sandoz to coordinate anticompetitive activity.

But the judge said no reasonable jury could find that New York-based Pfizer directly conspired to fix prices, knew of collusion by Greenstone when asked to approve price changes, or was liable because Greenstone — the authorized generic manufacturer of Pfizer-branded drugs — acted as its agent.

“Greenstone existed for the purpose of selling generic drugs for profit in addition to the strategic value that it provided to its parent company,” Shea wrote. “The states’ contention that it existed for the sole purpose of acting on its parent company’s behalf falls short.”

LAWSUIT COVERS 80 GENERIC DRUGS

The dismissal came in a lawsuit brought by 45 U.S. states, the District of Columbia and four U.S. territories, accusing 36 defendants of conspiring to fix prices of 80 generic drugs, primarily for skin ailments.

Connecticut Attorney General William Tong has led the litigation, and New York Attorney General Letitia James filed papers opposing Pfizer’s dismissal motion.

Tong’s office had no immediate comment on Wednesday. James’ office declined to comment.

Pfizer spun off Greenstone in a 2020 transaction that created Viatris.

In a statement, Pfizer said it was pleased with the dismissal. It also said Greenstone was a “reliable and trusted supplier of affordable generic medicines for decades, and we will continue to vigorously defend against these claims.”

Shea oversees two other antitrust lawsuits by state attorneys general related to generic drugs. Pfizer is a defendant in one of those cases.

(Reporting by Jonathan Stempel in New York, Editing by Louise Heavens)

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By Ashitha Shivaprasad

June 24 (Reuters) – Bullion-backed exchange-traded funds could face renewed outflows if investors continue to increase their bets on interest rate hikes, analysts say — a factor that could pull already falling gold prices lower.

Spot gold prices slipped below a key psychological level of $4,000 per ounce level for the first time since November 2025 on Wednesday, under pressure from a firmer U.S. dollar and growing expectations that interest rates will remain elevated.

“ETF flows are closely linked to U.S. monetary policy, as reflected in the buying and selling of physically backed products,” said Julius Baer analyst Carsten Menke. 

GOLD ETFS STILL SEEING OUTFLOWS IN EARLY JUNE

World Gold Council data shows gold-backed ETFs recorded net outflows of 16 metric tons in May and continued to see outflows in the first half of June, although funds last week registered their strongest weekly net inflows since mid-April.

“While recent inflows suggest selling pressure may be easing, ETF demand is likely to remain less supportive than it was in 2025,” analysts at ING said. 

Standard Chartered in a note said that at current price levels, more than 200 tons of gold in exchange-traded funds are in loss-making territory. 

Higher rates typically weigh on non-yielding gold.

Expectations that the U.S. Federal Reserve will trim interest rates this year were a key factor behind gold’s record-breaking rally in 2025, sweeping spot prices to an all-time high of $5,594.82 per ounce in January.

However, rising energy prices in the wake of the Iran war have fuelled inflation concerns, leading central banks including the Fed to adopt a more hawkish tone and investors to scale up bets on rate hikes, rather than cuts.

Gold prices have retreated around 29% from January’s peak. [GOL/]

“Rising rate forecasts plus huge AI cash-raising suggest a bullish view of the U.S., if not global, economy,” said Adrian Ash, head of research at online marketplace BullionVault.

“While that doesn’t mean gold is fated to fall, investor attention is most certainly elsewhere right now.”

ETF VS OFFICIAL SECTOR DEMAND

While remaining constructive on gold, some major banks have identified soft ETF demand as a growing headwind to the metal’s further upside. 

Morgan Stanley said its $5,200-per-ounce gold forecast for the second half of 2026 appears increasingly dependent on a revival in ETF buying and evidence that lower oil prices are feeding through to a more dovish interest-rate outlook.

Goldman Sachs also tempered its optimism, lowering its December gold price forecast and reducing its projections for ETF demand. 

Analysts say that while softer ETF demand could weigh on bullion in the near term, central bank purchases — another key driver behind gold’s rally last year — are likely to remain a key source of support. 

“If official sector demand continues to grow rapidly, it can make up for shortfalls in terms of ETF demand,” said Suki Cooper, analyst at Standard Chartered.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Veronica Brown and Jan Harvey)

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BERLIN (AP) — German prosecutors said they carried out raids Wednesday in an investigation of a suspected attempt to disrupt the country’s gas supply, connected to an opaque maneuver in 2022 involving what was Russian energy giant Gazprom’s German unit.

Federal prosecutors said police searched the premises in Berlin of a suspect and another person who isn’t under investigation, along with those of an unidentified company in Frankfurt. They said that there were no arrests.

The suspect, a Russian citizen whose name wasn’t released, is being investigated on suspicion of being an accessory to violating investment rules in Germany’s foreign trade law and an accessory to attempted anticonstitutional sabotage, prosecutors said in a statement.

A few weeks after Russia launched its full-scale invasion of Ukraine in 2022, German officials said the parent company announced that it was withdrawing from the Gazprom Germania unit. They said the buyer ordered its liquidation, which isn’t allowed before a purchase has been approved.

Berlin put a German government agency in charge of Gazprom Germania, thwarting the attempted liquidation. The government said the unit was “of paramount significance” to natural gas trade, transport and storage in Germany. It later nationalized the company, now known as Securing Energy for Europe.

Federal prosecutors said they suspect the sale to a Moscow-based company with no link to the industry and the attempted liquidation were meant to disrupt gas supply in Germany, a backer of Ukraine. The man under investigation is suspected of having supported the implementation of the decision to liquidate Gazprom Germania with that aim, they said.

Germany scrambled to reduce its dependence on Russian gas after the invasion of Ukraine. Moscow cut off its remaining gas supplies to Germany months later.

A few weeks after that, undersea explosions damaged the Nord Stream pipelines, which were built to carry Russian natural gas to Germany under the Baltic Sea.

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WASHINGTON (AP) — U.S. President Donald Trump and Vice President JD Vance say their interim deal to end the war with Iran will deliver a financial windfall to American farmers.

But the Iranians deny it. And in the absence of more details, sanctions experts are flummoxed over exactly how billions of dollars’ worth of Iranian assets would make their way to the American heartland from the escrow accounts where they’ve been locked for years by U.S. sanctions.

A tentative agreement reached last week would reopen the Strait of Hormuz, through which a fifth of the world’s oil and natural gas once passed, and allow Iran to start selling its oil freely again during a 60-day period when the two countries will continue negotiating key issues. The memorandum of understanding also promised to unfreeze Iranian assets.

Trump’s deal has come under fire for failing to address the reasons the president cited for going to war with Iran on Feb. 28, including curbing Tehran’s nuclear ambitions, its missile program and its support for militant groups such as Hezbollah in Lebanon and Hamas in Gaza.

Lashing back at critics Tuesday on his Truth Social media platform, Trump said U.S. farmers would get a payday: The U.S. Treasury Department, he wrote, would release the Iranian assets “into escrow, controlled by the U.S.A., and will be used for the purchase of food and medical supplies, exclusively from the United States, including Corn, Wheat, and Soybeans from our great American farmers. These are things that are desperately needed by Iran.’’

Vance, who spoke about the proposal after high-level talks in Switzerland, and Trump say that any frozen funds and assets held outside of Iran will be used to buy U.S. crops.

But the Iranians deny that’s part of the deal. A spokesperson for the Iranian Foreign Ministry, Esmail Baghaei, said any agricultural purchases would be based on “prices and quality,’’ not terms dictated by Washington.

“It is interesting that the philosophy and goal of the war, which was the destruction of the Iranian civilization and the collapse of Iran, has become enriching American farmers,” Baghaei said.

Iran’s ambassador in Geneva, Ali Bahreini, rejected Vance’s contention that the U.S. and Qatar would dictate how Iran uses unfrozen funds. “Iran is the only country who decides what to do with those assets,” he told reporters.

A U.S. official dismissed the contradiction, asserting that Iranian leaders were speaking to their domestic audience. The official spoke on condition of anonymity because they were not authorized to speak on the record.

Joseph Glauber, a research fellow emeritus at the International Food Policy Research Institute, said Iran was unlikely to abandon its other trade partners on food.

Iran’s major suppliers include Brazil, India, Turkey, the European Union, Canada, Australia and Argentina, he said. Trump’s demand to buy from the U.S. would “create some hard feelings with some of our competitors.”

Under previous sanctions, the U.S. has required that money foreign countries spend on imports from Iran — such as South Korean purchases of oil and Iraqi purchases of Iranian electricity — be locked in escrow accounts and typically released only if the Treasury approves and if the proceeds go toward “non-sanctionable’’ items such as food and medicine.

On Monday, the U.S. Treasury approved the sale of Iranian oil, petrochemicals and petroleum products through Aug. 21. It did not mention any escrow accounts.

Richard Goldberg of the Foundation for Defense of Democracies, who coordinated efforts to put diplomatic pressure on Iran in the first Trump administration, said in a post on X that he would welcome “a clarification that Iran is actually restricted to only buying U.S. agricultural products.”

Richard Nephew, senior research scholar at Columbia University’s Center on Global Energy Policy, said it’s unclear what the new U.S.-Iran agreement actually means for releasing restricted Iranian assets.

Could the U.S. require that the assets be used to buy American farm products?

“Well, we can try!’’ Nephew, who helped design Iran sanctions in the Obama and Biden administrations, said by email. “All you really need to do is to tell a foreign bank that they can move the money but only to a U.S. bank to buy soybeans or whatever.”

Banks do not have to comply, he said. If they refuse, the U.S. could sanction them as well.

But it’s rare for the U.S. to conduct itself that way, he added, “in part because we don’t usually like to give the impression that we treat national security issues as a cash grab.”

___

Associated Press writers Josh Boak and Michelle L. Price in Washington contributed to this report.

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BERLIN (AP) — A problem with a communications system forced Germany’s railway network to halt all trains late Tuesday, leaving passengers stranded across the country.

Trains were held at stations and would-be travelers stood in long lines at information desks as they tried to figure out how to get to their destinations.

The main national railway operator, Deutsche Bahn, said shortly before 1 a.m. — nearly 2 1/2 hours after it first reported the outage — that the problem had been resolved and service was resuming “step by step.”

The company said there was a nationwide problem with the GSM-R digital communication system, which is used for internal communication on the railway network. It later said that the cause had been identified, but didn’t specify what it was.

The Bild newspaper quoted Deutsche Bahn CEO Evelyn Palla as saying that they “were able to stabilize the situation with an emergency system.”

Deutsche Bahn said during the outage that it was giving taxi and hotel vouchers to passengers and, where possible, making available trains at stations for travelers to sit in. It apologized for the situation.

At Berlin’s central station, Reyna Ghoshal and a friend were trying to get back to Munich after a trip to the German capital and saw “unhappy faces” as they arrived at the station.

“The train conductor was very nice, but he was just like, ‘we don’t know,’” said Ghoshal, who is from Atlanta. She said that “we booked a bus for 8 a.m. just in case, but generally we don’t know what’s going on.”

In recent years, complaints about train delays and disruption in Germany have become increasingly frequent.

Government-owned Deutsche Bahn has started conducting thorough but disruptive overhauls of major routes after years of underinvestment in a bid to improve its performance.

The German railway system has on rare occasions in the past halted all or most trains, but because of storms rather than for technical reasons.

GSM-R, short for Global System for Mobile Communications–Railway, offers voice and data services needed to operate railways, including communication between train drivers and control centers.

According to the European Union Agency for Railways, it has been introduced across Europe since 2000 as a common standard for railway operations.

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WASHINGTON (AP) — A U.S. official told The Associated Press on Tuesday that one of Anthropic’s artificial intelligence models had identified vulnerabilities in highly sensitive and secure U.S. government computer systems during a testing exercise.

The official, who spoke on the condition of anonymity to discuss the matter, said Anthropic had teamed up with U.S. intelligence agencies to conduct tests using the company’s Mythos model. It had identified certain vulnerabilities within hours, but that does not mean the model was able to exploit them within that time, the official said.

The official said the testing was done through an Anthropic initiative called Project Glasswing, which brought together tech giants and other companies in hopes of securing the world’s critical software from “severe” fallout that the Mythos model could pose to public safety, national security and the economy.

Democratic Sen. Mark Warner of Virginia had briefly mentioned the testing during a June 11 hearing before the Senate Committee on Banking, Housing, and Urban Affairs. Warner had said, “This tool broke into almost all of our classified systems, not in weeks but in hours.” He attributed the information to the head of the National Security Agency and U.S. Cyber Command, who is Gen. Joshua Rudd.

The NSA declined to comment on the matter in an email. An Anthropic spokesman also declined to comment.

Despite the recent cooperation between Anthropic and U.S. agencies to test for vulnerabilities, tensions between the California company and the Trump administration have been growing. Anthropic has raised concerns over how the U.S. military would use its AI, while the administration has restricted the use of some of Anthropic’s models.

The administration issued a directive earlier this month requiring Anthropic to prevent foreign nationals from using its latest artificial intelligence models, known as Fable 5 and Mythos 5. Anthropic released Fable widely earlier this month. That model is a limited version of the more advanced Mythos, to which the company has tightly limited access due to cybersecurity fears.

The directive came 10 days after President Donald Trump signed an executive order to establish a framework for the federal government to vet the national security risks of the most advanced AI systems for up to a month before their public release. Participation by AI developers would be voluntary, the order said.

Anthropic said it disabled the models for all of its customers to comply with the administration’s directive. The AI giant said it did not believe the steps taken by the government were warranted by the concern it flagged about a potential security issue.

A group of cybersecurity executives has also asked the Trump administration to lift its directive, saying the move could help U.S. adversaries more than it hurts them. More than 100 cybersecurity experts and leaders from companies including Adobe and Nvidia told the government in a letter that Anthropic’s Mythos models are “quite good” at finding flaws in software and weaponizing exploits — but they are ”not uniquely good at these tasks.”

Many of the letter’s signatories said they regularly use other foundation and open-source models for security audits and training. The letter said it is dangerous to take away the best cyber defense capabilities “without a good reason” when America’s adversaries are rapidly advancing.

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By Ernest Scheyder

LAS VEGAS, June 23 (Reuters) – Rio Tinto. expects its lithium business to grow faster than its copper, iron ore and other divisions as it works to triple production by 2028 for the electric vehicle and battery storage markets, an executive said on Tuesday.

The world’s second-largest mining company jumped into the lithium sector last year when it bought U.S.-based Arcadium, a deal that brought access to mines, processing facilities and deposits across four continents, as well as a customer base that includes Tesla.

Rio has been integrating those assets amid a lithium price crash caused in part by Chinese oversupply, a market malaise that forced a wave of industry layoffs and has only begun to abate in recent months.

Rio is now working to open mines in Argentina and Canada that it believes can be economical should prices drop again, Jérôme Pécresse, head of the company’s aluminum and lithium business unit, told Reuters on the sidelines of the Fastmarkets Global Lithium, Battery and Critical Materials Conference in Las Vegas.

The company plans to produce at least 61,000 metric tons of lithium this year and have the capacity to produce 200,000 metric tons by 2028, should the market demand it.

“We want to show that we can build on time and on budget,” said Pécresse, a former General Electric executive who joined Rio in 2023. “That’s taking up 90% of my time.”

He stressed that Rio aims to only bring online low-cost assets to supply customers that want long-term contracts, many of which have price floors and ceilings to protect both miner and buyer.

Still, he acknowledged that the lithium market is in a growth phase compared to other major global commodities, a reality borne out by lithium’s rapid transformation from a niche material to a high-demand economic building block.

“It’s a market that is trying to find itself, in a way,” he said.

Pécresse, who sits on Rio’s executive committee, declined to comment on any potential merger aspirations between Rio and Glencore, citing a six-month standstill regulation that expires in August.

NEW TECH

Much of Rio’s growth will come from the company’s investment in direct lithium extraction, which was a key reason for the Arcadium buyout.

Pécresse said he expects one of Rio’s DLE projects to launch within a few years. He added that Rio is not currently eyeing buyouts of other lithium projects.

“We’re pretty happy with the Arcadium assets,” said Pécresse, who noted that he personally drives a hybrid vehicle. “We have a clear roadmap to get to 200,000 (metric tons per year of production) by 2028.”

While the Arcadium buyout and that growth could make Rio one of the world’s largest producers of the battery metal, Pécresse said that is not his goal. Albemarle is the top global producer.

“We don’t have a strategy to be number one or, say, number three,” he said. “Our strategy is to have a set of assets that are big enough to give us relevance with customers.”

(Reporting by Ernest Scheyder; Editing by Cynthia Osterman)

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June 23 (Reuters) – U.S. Treasury Secretary Scott Bessent said on Thursday that the Trump administration aimed to build enough supply chain capacity to allow critical industries to withstand economic shocks, pandemics, wars, coercion from adversaries and other foreign chokepoints.

Bessent told the Economic Club of New York that supply chain resilience “does not require every component to be domestic from beginning to end. That would be unrealistic and unnecessary.”

But in a speech invoking Alexander Hamilton’s call for a newly independent United States to develop manufacturing self-sufficiency, Bessent said supply chain security “requires diversifying away from dangerous concentrations. And that we build enough capacity at home to ensure that the American people are never at the mercy of a foreign chokepoint abroad.”

Bessent also said that, after decades of growing trade deficits, the U.S. was a nation now more aware of its economic interests, and more prepared to protect them.

Partner countries should expect “a nation that insists on reciprocity. That shields its firms from discriminatory treatment. Secures its critical supply chains. Enforces sanctions and combats illicit finance,” Bessent said. “A United States, in short, that will not allow economic policy to grow detached from national strategy.”

Bessent also said the U.S. should support financial innovation that strengthens the dollar, improves efficiency, expands access and preserves the integrity of the financial system, but he did not outline any specific policies to achieve that. He added that the U.S. would insist that new technologies meet U.S. standards for transparency, security, consumer protection and law enforcement access.

(Reporting by David Lawder; Editing by Edmund Klamann)

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An important job in the two or so years leading up to retirement—right up there with figuring out your healthcare coverage and winding down your work activities—is building up a cash cushion. In addition to being there as a source of funding when you eventually retire, cash has the salutary effect of providing a buffer if  you retire earlier than you expected  due to unforeseen circumstances.

As you build out your Bucket portfolio, here’s some guidance on the amount, source, and location of those liquid reserves.

Your cash bucket should consist of one to two years’ worth of portfolio withdrawals, not living expenses. That’s because at least some of your living expenses will likely be coming from outside your portfolio— Social Security or a pension, for example. And the composition of those cash flow sources may well change throughout your retirement.

To set up your Bucket 1 initially, think through your cash flow sources for the first few years of retirement. Let’s say a 66-year-old wants to retire in two years and expects that he’ll need to spend $80,000 per year, in total, from his $1.5 million portfolio, at that time. He wants to delay filing for Social Security until age 70, so all of his spending will come from his portfolio in those first few years of retirement. After that, roughly half his spending needs will come from Social Security.

If he wanted to be conservative, he could build a cash cushion consisting of $160,000—his years 1 and 2 portfolio withdrawals. His Bucket 2—high-quality bonds—would consist of eight years’ worth of portfolio withdrawals, which at that point will be $40,000 per year (his $80,000 total spending less Social Security income). The remaining $1 million and change could go into a globally diversified equity portfolio.

In addition to thinking through the size of your liquid reserves bucket, it’s also worth considering the “where” of it. Will you hold cash in your taxable accounts, tax-sheltered accounts, or some in both? To help answer that question, you need to consider your  sequence of withdrawals in retirement.

Taxable accounts are often first in the queue for retirement withdrawals because their ongoing tax costs are higher than those of tax-sheltered accounts. (In a taxable account, you enjoy long-term capital gains tax treatment on the sale of appreciated winners you’ve held for more than a year, but ordinary income is dunned at your higher ordinary income tax rate.) But some retirees may benefit from spending from their tax-deferred accounts early in retirement, with an eye toward reducing future required minimum distributions and tax bills. This is a good spot to get advice from a financial or tax adviser. Armed with the knowledge of where you’ll turn for your spending in the first part of your retirement, you can then figure out where best to hold your liquid reserves.

Once you’ve determined how much of a cash bucket you plan to set aside and where you’ll hold it, the next step is figuring out how to build it up. Ideally, you’d give yourself a couple of years to enlarge your cash position rather than having to find the money just before retirement. Many people moving into retirement will have a few options.

Additional savings: For preretirees who are still saving, a logical way to begin bulking up cash is to direct new contributions into cash. Say, for example, the aforementioned retiree is making the maximum allowable 401(k) contribution of $32,500 and putting another $8,600 into an IRA. By directing two years’ worth of contributions to cash in those two accounts, he could arrive at nearly half his target cash allocation ($82,200 of his $160,000 target) by the time he reaches his retirement.

Bonuses and inheritances: If you’ve recently received a surprise cash injection, the assets are a logical source for bulking up cash reserves. They’re probably already in cash and in a taxable account.

Rebalancing: Trimming equities and adding those assets to cash and bonds provides a twofer for people closing in on retirement: It reduces risk and helps cover cash flows for the first few years of retirement. This kind of selling can trigger a tax bill, so get some tax advice and/or concentrate rebalancing in tax-sheltered accounts to lessen the impact.

Reducing risky positions: Even if your portfolio’s asset allocation doesn’t need adjusting, you may still have problematic holdings in your portfolio: the employer stock you know you should scale back on, the individual-stock portfolio that’s duplicative of what’s in your mutual funds, or the costly active fund that hasn’t earned its keep relative to an inexpensive exchange-traded fund. Such holdings can be ideal sources when building up your cash reserves, just mind the tax consequences if you’re selling them from a taxable account.

_____

This article was provided to The Associated Press by Morningstar. For more retirement content, go to https://www.morningstar.com/retirement.

Christine Benz is director of personal finance and retirement planning for Morningstar and co-host of The Long View podcast.

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