Quote:
Originally Posted by KCUnited
Sounds like you should just keep in the MM part of your ROTH.
The Roth IRA as an Emergency Fund
The advantage of putting emergency savings into a Roth IRA is that you don’t miss the limited opportunity to make that year’s retirement contribution. You can only contribute a few thousand dollars to a Roth IRA each year, and once a year passes without a contribution, you lose the opportunity to make it forever. However, accessing these funds should be your last resort...
The part of your Roth IRA contribution earmarked as your emergency fund doesn't belong in stocks, bonds, or mutual funds like a typical retirement contribution. It belongs in a liquid account (meaning cash or something that can easily be converted to cash and that earns interest) that can be withdrawn from at a moment's notice without losing principal. |
Perfect, that's exactly how I see it. Needed to see it thought out like that though. Thanks for finding!
I'll max my contribution this year but leave the chunk I'm putting in now in a money market fund until my actual emergency savings is back to level. When it gets there, this chunk will get invested.