Author Topic: Questions re 6mo, 1 or 2 or 3 years living expenses available at start of FIRE  (Read 974 times)


  • Stubble
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  • Posts: 166
So I have been reading that many people have a stash of cash in a savings account or somewhere as easily accessible of several months living expenses when they retire.

Why WOULDN'T one do this?

Why WOULD someone do this?
-Is it like an emergency fund?
--For when you need 35K today, and cannot wait to liquify funds and to avoid penalties for doing so?
-Is it for when the market has a bad year and your 4% draw yields you significantly less than you average?

What factors should be considered when deciding how much to keep....I have read as little as 6 months to 3 years.

We are a family of 6 and the kiddos are still very young. How do you save up that kind of cash? Just siphoning out of the paycheck we have now sounds like a pretty slow way to go about reaching such a number - say it's $100k. I want to put some towards this every paycheck but keep it in the accounts we are trying to grow like vanguard, betterment, retirement etc and then take it out when we need it when we hit FIRE - but I assume we'll get penalized for that.

What other questions should I be asking?!


  • Bristles
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  • Posts: 326
It can be an important buffer for the ups and downs of the market.  Sometimes called laddering or cash wedge.