Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 10-10-2010, 11:10 AM   #21
Alan's Avatar
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 18,925
Originally Posted by Meadbh View Post
I keep $5-10K in a personal "high interest" savings account, and $20-30K in a corporate "high interest" savings account. For a significant emergency, I could use that to pay myself a dividend (which would have tax consequences). I also have a HELOC on an investment property and if necessary could raise another $20K there.

Does anyone have an opinion on whether an emergency fund may need to be differently structured in the accumulation and decumulation phases?

So, for example, I am w*rking. Twice a month my pay is deposited in my account. I know what I am earning and I know that the end of year reconciliation will be in my favour. Having the expectation of future cash flows means that sometimes skate "close to the wire" in my personal account, so I check it several times a week and top up from the savings account if needed. But if I were RE, I would want a larger cash buffer.
First year of ER here, and I have a larger cash cushion than at any time when I was working. This is more to hold up to a bear market where I would like to avoid selling equities just to have income. I would like to be able to sell equities at the time of my choosing.

My short term emergency fund is in a bank savings account at present for unplanned large expenditures. The rest of my cash cushion is in I-Bonds, CD's and a VG short term bond fund VBISX.

Retired in Jan, 2010 at 55
Now it's adventure before dementia
Alan is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-10-2010, 11:15 AM   #22
Moderator Emeritus
Nords's Avatar
Join Date: Dec 2002
Location: Oahu
Posts: 26,564
Originally Posted by Meadbh View Post
Does anyone have an opinion on whether an emergency fund may need to be differently structured in the accumulation and decumulation phases?
We keep two years' expenses in cash in a money market account, so we may not really need an "emergency fund"-- it is the emergency fund.

Another option is a home equity line of credit... just write the check to deal with the emergency and figure out the repayment later.


The book written on, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 10-10-2010, 02:45 PM   #23
Thinks s/he gets paid by the post
Gotadimple's Avatar
Join Date: Feb 2007
Posts: 1,498
Originally Posted by Meadbh View Post
Does anyone have an opinion on whether an emergency fund may need to be differently structured in the accumulation and decumulation phases?
I think cash management is significantly different after retirement. First of all, there is the psychological effect -- knowing there is no further salary income to count on. Secondly, managing money becomes a broader concern: there is no deposit to savings each month, and, going over budget could be a problem downstream.

That said, I feel very comfortable with 2 years of living expenses in bank accounts, and CD's. That provides me with the ability to cover an emergency expense without having to re-balance assets and perhaps sell equities to get the cash.

-- Rita
Only got A dimple, would have preferred 2!
Gotadimple is offline   Reply With Quote
Old 10-10-2010, 02:46 PM   #24
Recycles dryer sheets
Join Date: Aug 2008
Posts: 152
+1 Our 2 years cash in liquid account(s) serves as an emergency fund.

Had our first "emergency" a couple of weeks ago. My niece and her DH found their first house to buy. They are required to put down 10%. 5% they must save themselves and the other 5% can come from gifts. They'll have their 5% ready by closing and we are happily providing the other 5%. It felt so good to volunteer the 5% (they never dreamed of asking) and to tell them the checks would be ready as soon as they could drive over.

FurBall is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Emergency Fund mrinvest Young Dreamers 66 06-17-2009 10:50 PM
What if you use up your emergency fund? Amethyst FIRE and Money 16 06-07-2009 12:25 PM
Where to keep my emergency fund? tmm99 FIRE and Money 17 01-05-2009 01:20 PM
Where should I put these emergency funds? Tiger FIRE and Money 9 02-05-2008 08:15 AM
Where should I put taxable after-emergency fund money? Olav23 FIRE and Money 6 03-24-2007 07:35 PM


All times are GMT -6. The time now is 03:25 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.