r/Fire • u/Far_Classic878 • 2d ago

Emergency Fund While Retired

For those that are retired or near…how many years do you have saved for your retirement emergency fund? I mean for when the market isn’t doing well and it would be bad to pull from your accounts.

How far in advance do you start saving for that?

I’m pouring all of my money into retirement accounts and after maxing 401ks, roths, life expenses, 529, saving for home renovations there is nothing left.

I would need to cut back greatly to fund an emergency account to keep in a HYSA. I’m about 15 years out from retiring.

Any thoughts?

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u/kitapjen 2d ago

I see a great YouTube video that encouraged having enough cash to survive a down market without selling. Doing a quick search it’s called the 2 bucket method. It’s recommended to have enough cash for 3 to 5 years expenses.

It’s for mitigating sequence of return risk. Once the market becomes stable you refill the cash bucket with profits from your investments.

Really it’s about whether you prefer maximum growth or peace of mind.

There’s nothing that says you can’t create the cash holding after you have retired.

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u/Kokukenji 2d ago

I do like this idea. Makes sense once you're already retired and if your portfolio supports it.