I have heard of people starting one prior to having a full emergency fund in place — since a Roth could
double as an emergency fund.
I think a savings account for a large purchase (and
doubling as an emergency fund) is as good a use as any.
RRSPs can
double as emergency funds if necessary: they're friendlier and more liquid than you may think: you can open one this week and collapse it the next if you really need the money.
If I were to gradually move the account to I - Bonds, similar to a CD Ladder, would that be able to
double as an emergency fund (fixed dollar amount equal to 3 - 6 months living expenses) and long - term cash savings (10 - 20 % of non-retirement investments)?
If this is
doubling as your emergency fund then no, keep it liquid.
Since you can also access the contributions any time and for any reason without tax or penalty, it could
double as your emergency fund.
Even if you already have the Roth started,
it doubles as an emergency fund, so putting money into it couldn't hurt.
Not exact matches
If you've been saving for retirement in a Traditional or Roth IRA, you may wonder whether those
funds can
double as emergency savings.
We've decided that once the new tax - free accounts become available (in 2009), we will start up an
emergency fund which will also
double as a savings account for our next car.
Find out what your bank requires and take that balance from your
emergency fund and stick it in your chequing account where it can do
double duty: It'll be there when crap hits the fan and,
as long
as you leave it alone, it'll help you to save on bank fees.