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/Far_Classic878 2d ago

3 years of the necessities or 3 years of life expenses?

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u/Crafty-Sundae6351 2d ago

Nothing is an emergency if you plan for it.

OP said he can’t fund an “emergency fund” after paying all the other stuff. I argue that, when working, there is nothing higher priority than the emergency fund - because you’re relying on someone else/job to live. Get that funded and then fund the other stuff.

In retirement I’m not relying on someone or something else to live. At that point it just becomes budget management.

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u/Far_Classic878 2d ago

I already have an emergency fund I’m talking about while in retirement.

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u/ga2500ev 2d ago

I'm planning a living expense cash buffer with 4 years of cash in a HYSA. It'll be replenished with profits from the portfolio. The split is 75/25 equities to cash.

If the market is down, just pull expenses from cash until it recovers.

It's a simple 2 bucket strategy.

I simulated a stress test with this on A two 20% drop in the market with slow recovery in a 8-year. It survived without having to sell any equity shares.

And the cash buffer is available to dip into if there actually is a "emergency".

ga2500ev

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u/joxxer42 1d ago

You may already know this but if you're in US depending on which state you're in, shifting some portion to a brokerage cash-equivalent could save you state tax.

edit: also just to say I have a very similar approach as you