Tiered Emergency Fund

[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]

What’s the $17,000 in savings for?

[nebraskaguy85]

The $17,000 is my emergency fund ($15k is 6 months worth of expenses).

[zag00]

fill a Roth IRA - $6k. Would pull from your $17k and replenish throughout the yr.

[sailaway]

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]

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]

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.