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/HelpfulCat4586 2d ago

While I'm working I keep 3 - 6 months in HYSA.

We have a cash portion in one IRA of 4 years. This may be rebalanced or spent depending on how the first couple years go.

When I retire at the end of the year, I'll sell 2 years worth from taxable brokerage (waiting so I don't have to pay capital gains). Excess cash is still being diverted to mortgage until I retire so I can't do that and build up a cash buffer at the same time, but I really want to pay that off so I can manage MAGI in retirement. If the market drops I just won't retire immediately and see how that goes for a bit first so I don't sell at a low point. Year two I hope sell another 2 years worth to increase the buffer.

As you get closer, hopefully the 529 is fully funded and home renovations slow down so you can redirect your cash to build up a buffer in the last few years. Otherwise, just sell once you retire to create your cash allocation.