Hey Mustachians!
I am considering moving some money from my $10K emergency fund to a taxable account and using my existing Roth IRA as a back-up emergency fund. I'm 28, here's my situation:
Assets
457(b): $21K
Roth IRA: $8K
T-IRA: $2K
Savings Account: $10K (This is my existing emergency fund)
Home: $140K (I usually don't count this as an asset but wanted to show my complete situation)
CalPERS: $15K (I don't usually count this either as it is for my retirement pension)
Debts
Mortgage: $109K @ 3.375%
Income
Gross: $71K (with 5% raises each year for next 5 years)
Spending
$18K per year
Could be reduced to $12K per year, maybe less, in an emergency
So I'm thinking of putting $7K from the emergency fund into a taxable account. Then I'll have $3K in the savings account for emergencies, and can use my Roth IRA as a back-up emergency fund. Another thing to consider is if I lose my job I will have full access to my 457(b). I have health insurance through work. I realize this is a personal decision, but does anyone see a reason why I should not do this? Other advice is welcome too. Thanks!