I keep my pure EMERGENCY 6 months savings in an online HY Savings account

Jan 20, 2023
10:49:39am

The Dark Knight All-American

The interest rate on that got pretty poor for a while but it is back near 4% and it is comforting having that 6 months savings so liquid.

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The Dark Knight

Previous username: WhiteKnight
Bio page: The Dark Knight
Joined: Oct 28, 2004
Last login: May 6, 2024
Total posts: 22,527 (2,243 FO)

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Messages

Author

Time

Is a Roth IRA a good idea for an emergency savings? I understand you can pull

RGGeemer

1/20/23 10:36am

They need to raise the income limit for a Roth

cheezedawg

1/20/23 10:38am

It's insane that there is an income limit to begin with on a Roth

Skeptical Optimist

1/20/23 10:47am

isn't the limit kind of useless? Anyone can get money into roth.

SalmonOfCapistrano

1/20/23 10:53am

Never been a problem for me

supertux

1/20/23 10:55am

If only they raised it as fast as they are raising the social security limit

cougaman

1/20/23 11:24am

It's stupid that the married limit is way less than double what it is for

JuicyJam

1/20/23 11:27am

That is odd

RGGeemer

1/20/23 11:28am

Even Roth IRAs have a 10% early withdrawal penalty

Bainge

1/20/23 10:38am

Not on contributions, right? Just on earnings?

RGGeemer

1/20/23 10:38am

you should be able to withdraw contributions without penalty

LeonMarek

1/20/23 10:39am

<< Deleted >>

Bainge

1/20/23 10:40am

Don't think that's true.

RGGeemer

1/20/23 10:41am

Yeah I am getting mixed answers so I deleted it

Bainge

1/20/23 10:42am

False. Doesn't apply to contributions.

supertux

1/20/23 10:43am

Correct, I have taken funds out w/o penalty

PortlandCoug

1/20/23 10:51am

No. Roth's have a 10% early withdrawal penalty unless held 5 years or taken

JAGA97

1/20/23 10:38am

Not true. You can pull contributions at any time.

VenturaCoug

1/20/23 10:39am

RE: No. Roth's have a 10% early withdrawal penalty unless held 5 years or taken

RGGeemer

1/20/23 10:41am

Yes, it’s a good idea, but you may be forced to pull from depressed investments.

VenturaCoug

1/20/23 10:38am

Yeah this is the real issue. Good chances you need those funds when the market is down.

supertux

1/20/23 10:40am

So is a 1% savings account a better idea than a Roth IRA for emergency savings?

RGGeemer

1/20/23 10:42am

No, but 4% might be. It just depends.

supertux

1/20/23 10:44am

But you can put it into a Roth at vanguard and get 4% in vanguard federal money market. Best of both worlds. Maybe keep

supertux

1/20/23 10:44am

That sounds good. My Roth IRA is with fidelity, is there an equivalent MM there?

RGGeemer

1/20/23 10:46am

Sure

supertux

1/20/23 10:48am

I think the way to look at it is the Roth maybe justifies a slightly smaller

VenturaCoug

1/20/23 10:45am

Bask bank is a good one

supertux

1/20/23 10:46am

But yeah I would keep some in savings and excess in Roth. Want to minimize the chances of needing to use the Roth.

supertux

1/20/23 10:50am

I pulled a small amount last year to cover some grad school expenses literally

LeonMarek

1/20/23 10:53am

Sure. Why not? Just make sure you keep proof of contributions and keep track of any withdrawals you make.

supertux

1/20/23 10:39am

My understanding is that you can pull out the contributions without penalty but

PokeMAN

1/20/23 10:41am

Can use HSA too. Build up your hsa and save receipts, but this has the same

VenturaCoug

1/20/23 10:41am

At a minimum, you can put in contributions and keep in cash

Cougforgood

1/20/23 10:44am

Yep or some decent money market funds right now. Vanguards federal one is like 4%

supertux

1/20/23 10:46am

I keep my pure EMERGENCY 6 months savings in an online HY Savings account

The Dark Knight

1/20/23 10:49am

Didn't realize savings account interest rates were so high. That makes more

RGGeemer

1/20/23 10:51am

What online HY Company are you using?

PokeMAN

1/20/23 10:53am

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