NEW YORK (CNNMoney) -- I'm a 65-year-old retiree who has a comfortable pension and retirement savings that, for now at least, I don't need for living expenses. About a year ago I moved my savings into cash because I was worried about the unstable stock market and the crisis in Europe. I hate to see this money earn nothing, but I don't want to lose it if the stock market dives. Should I leave my savings in cash? Invest it in short-term bonds? Should any of it go into stocks? -- Don S.

Given all the turmoil in the economy and the financial markets the past couple of years, it's not surprising that you want to be careful about keeping your retirement stash secure.

But fleeing to cash to protect your savings is an ill-advised move that can backfire. In fact, in your case it already has.

Since you pulled out of the market a year ago, stocks have gained almost 10%, while bonds have returned roughly 7%. Which means that even the most conservative mix of stocks and bonds would have given you a much better return than, say, a money-market fund, which likely earned less than 0.1% over the past year. So in the short-term at least, your gambit didn't pay off.

As for the long-term, moving to cash and staying put would make your savings safer in the sense that your money will be insulated from the market's gyrations. But there's a big drawback as well.

The returns on secure vehicles like savings accounts, money funds and the like barely keep pace with inflation over long stretches. After paying income taxes on gains, the real value of your savings could actually shrink as you age.

So if a dash into cash isn't the right way to go, what's a 65-year-old who doesn't want to see his nest egg scrambled to do?

Your first move should be to adjust your focus to the longer term. Right now, you're thinking only of how to protect your savings from what may happen in the market over the next few weeks or months.

Based on life expectancy for someone your age, you have a 50-50 chance of living another 20 years or so. And since life expectancy represents only the average life span, you have a good shot at living much longer. So even though you're retired, you should invest as if you'll be doing so for a long time. I generally tell retirees they should plan as if they'll live into their early 90s, longer if they come from a family with a history of longevity.

That means you want to invest your savings in a blend of stocks, bonds and cash that will not only give you some protection from short-term market drops, but enough long-term growth potential to maintain the purchasing power of your nest egg as well.

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Fleeing to cash won't protect retirement savings