Tiered Emergency Fund

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nebraskaguy85
Posts: 14
Joined: Thu Jun 25, 2020 6:59 pm

Tiered Emergency Fund

Post by nebraskaguy85 »

37 Male - Nebraska, Divorced with 1 son
Income $95k-$110K
I currently do 10% pre-tax into my 401k with a 3% safe harbor match and 7% profit share still vesting. No other retirement or investing yet.
No debt, and rent apartment.

I have just under $17k in a local credit union savings account, should I peel back down to $10k in savings, and have the other $7 in a different savings vehicle?

I welcome any thoughts and opinions, thank you.
delamer
Posts: 13960
Joined: Tue Feb 08, 2011 6:13 pm

Re: Tiered Emergency Fund

Post by delamer »

What’s the $17,000 in savings for?
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
Topic Author
nebraskaguy85
Posts: 14
Joined: Thu Jun 25, 2020 6:59 pm

Re: Tiered Emergency Fund

Post by nebraskaguy85 »

The $17,000 is my emergency fund ($15k is 6 months worth of expenses).
zag00
Posts: 338
Joined: Wed Oct 29, 2014 3:15 pm

Re: Tiered Emergency Fund

Post by zag00 »

fill a Roth IRA - $6k. Would pull from your $17k and replenish throughout the yr.
sailaway
Posts: 5115
Joined: Fri May 12, 2017 1:11 pm

Re: Tiered Emergency Fund

Post by sailaway »

nebraskaguy85 wrote: Fri May 13, 2022 12:19 pm The $17,000 is my emergency fund ($15k is 6 months worth of expenses).
It sounds like you should leave this as is and start investing further income according to your desired AA. Whether that means you continue to accumulate cash to buy ibonds, start a Roth IRA, etc., will depend on your overall plans. If you choose to buy ibonds, once your first purchase is at least a year old, you could move more cash into other investments, if that fits your overall plan.
Mike Scott
Posts: 2472
Joined: Fri Jul 19, 2013 2:45 pm

Re: Tiered Emergency Fund

Post by Mike Scott »

You sound like a possible candidate for a Roth IRA emergency fund... https://www.bogleheads.org/wiki/Roth_IR ... gency_fund

You could put 6K in now and 6K next January 1 as long as you stay under the income limit. If you have HSA eligible insurance, you could wash health care costs through an HSA for tax savings there as well.
delamer
Posts: 13960
Joined: Tue Feb 08, 2011 6:13 pm

Re: Tiered Emergency Fund

Post by delamer »

nebraskaguy85 wrote: Fri May 13, 2022 12:19 pm The $17,000 is my emergency fund ($15k is 6 months worth of expenses).
You could eke out more interest with a CD ladder, maybe.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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