Wealth Advisors Push 3.8% Cash-Yield Targets as Inflation Erodes Savings

1 articles · Updated · The Wealth Advisor · May 26

April inflation near 3.8% is forcing wealth advisors and RIAs to reposition client cash, warning that balances earning less than that rate are losing purchasing power even if nominal account values hold steady.
Federal Reserve data show the national average savings rate remains below 1%, leaving many households deeply negative in real terms and exposing retirees, emergency reserves and short-term allocations to steady erosion.
Advisors are steering clients toward higher-yield cash vehicles, with many high-yield savings and money market accounts offering roughly 3% to 4%, while laddered CDs can lock in elevated rates for defined liquidity needs.
The shift reflects a broader planning change: cash is still a safety asset, but advisors increasingly frame it as carrying inflation risk and as a drag on long-term wealth if left idle in low-yield bank accounts.

With inflation at 3.8%, has holding cash in a traditional bank account become the riskiest investment of all?

Are high-yield savings accounts truly safe, or are savers trading inflation risk for other hidden dangers?