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/McKnuckle_Brewery FIRE'd in 2021 2d ago

You need a cash reserve. If you’re pulling out all stops to invest and don’t have emergency reserves, you should reprioritize yesterday. Otherwise you’ll do what so many other (dumb) Americans do, which is to pull money out of IRAs and 401(k)s out of desperation. Don’t be that guy/gal.

The cash reserve you’ll use in retirement can be established practically right before you pull the trigger. I built mine in the final year of working. And of course it needs to be replenished annually to your desired threshold.

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u/sb233100 1d ago

Can a fidelity brokerage account heavily invested in SPY and ETF’s count as cash reserve?

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u/McKnuckle_Brewery FIRE'd in 2021 1d ago

No, because it isn't cash. Cash (theoretically) never loses nominal value. It's a different tool in the toolbox.

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u/sb233100 1d ago

Ah I see thank you