Early Retirement & Financial Independence Community - View Single Post - Using your Roth as part of your emergency fund--good idea?

crazy connie · 05-17-2007, 04:42 PM

I think that considering ROTH contributions as PART of the emergency fund is fine IF:
1. You have stable employment and are routinely comfortable with LBYM
2. You have a couple of months in basic cash account to cover basic emergencies i.e. a new heat pump, appliance dies, unanticipated major car repairs, flights for family emergency, death of grandparent etc...

I would let go of a lot of stuff or things before dipping into a ROTH but if you have a good employer and do not see a problem on the horizon then it makes sense to me.

The reasoning to me is if you do this... over time your ROTH grows but your cash stash also grows and in a few years the emergency fund is up to where it should be!

05-17-2007, 04:42 PM	#11
crazy connie Thinks s/he gets paid by the post Join Date: Feb 2006 Posts: 1,143	I think that considering ROTH contributions as PART of the emergency fund is fine IF: 1. You have stable employment and are routinely comfortable with LBYM 2. You have a couple of months in basic cash account to cover basic emergencies i.e. a new heat pump, appliance dies, unanticipated major car repairs, flights for family emergency, death of grandparent etc... I would let go of a lot of stuff or things before dipping into a ROTH but if you have a good employer and do not see a problem on the horizon then it makes sense to me. The reasoning to me is if you do this... over time your ROTH grows but your cash stash also grows and in a few years the emergency fund is up to where it should be!