Hi all,
I've been thinking about going part time for a while and I've thought a lot about how best to handle emergency type expenses. I'd love to have some feedback and/or thoughts on what others would do. Here is my thinking.
I have always had a very stable job at mega corp, and honestly not really concerned about losing my job, so I've never kept much in the way of emergency funds, maybe 1-2 months at the most, and have chosen to keep all my money in investments with a chance of much higher returns than a money market.
Now that I am leaning toward part time, my spending will be around 35k / year, and I would receive ACA subsidies as long as my income doesn't go over 40k. To allow for extra income on years where I may have large surprise expenses I think it would be best to have savings to cover those, rather than try to earn more income and possibly go over my ACA limits/cliffs.
It looks like I can continue to max out my Roth and use those contributions as spending without counting as income (currently I have about 15k in contributions, and I can only put in 5500 a year, so that means I'll have to put more money into another savings option.
Again, I'd prefer not to have money in a money market or savings account, as the chances I'll need it are slim, so would I a brokerage account work, where I assume I can withdraw my contributions and they not count as income?
My plans are to let me other retirement accounts (mostly all pre-tax accounts) just continue to grow as I go part time, and still contribute some to keep my MAGI around 35k. This all depends on what kind of part time salary I can negotiate.
Anyone got other ideas?
Thanks!