Re: Balancing Retirement and Non-Retirement Savings

On May 7, 10:26 pm, Sandra Loosemore <nore...@[EMAIL PROTECTED]
> wrote:
> jIM <noreplysoc...@[EMAIL PROTECTED]
> writes:
> > 6 months expenses are suggested in cash.  This is to cover
> > emergencies.  I have a hard time watching 6 months expenses (25k+ for
> > me) earning 2-4%.
>
> > So I took a 3 and 3 approach.
> > 3 months expenses in 90 day CDs (laddered to mature every 30 days)
> > 3 months expenses in a moderate mutual fund (I use PRPFX).
>
> I do something similar with dividing my "emergency fund" into layers.
> I routinely keep enough in my checking account to cover an extra
> month's expenses, and another $5000 or so in a money market account to
> cover unexpected home repairs and the like.  Beyond that, I have money
> in a muni bond fund that I could tap into in case of a longer-term
> emergency.

I agree with the layering approach in taxable accounts.  Some money
has a general purpose, and watching that general purpose account only
return 1-2% before taxes is not a good way to get or stay rich.

When general purpose moves to specific purpose, I would strongly
advise raising cash.

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