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CaribbeanDemon 
LSU Fan
Caribbean
Member since Jun 2007
1215 posts
| Emergency Fund (Posted on 1/5/13 at 9:30 am)
I have about $25,000 that I would like to put aside for an Emergency Fund. Some of the money is sitting in a savings account in a local bank the rest will be moved over from another account in the next few days.
The question I have is, what is the money board's take on where to stash this EF? I am thinking short term (3 Month) CD but will look into other ideas that you guys may come up with.
#inbeforehookersandblow
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Paul Allen
LSU Fan
Baton Rouge, LA
Member since Nov 2007
19646 posts
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Vanguard fund through a Roth IRA.
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CaribbeanDemon
LSU Fan
Caribbean
Member since Jun 2007
1215 posts
| re: Emergency Fund (Posted on 1/5/13 at 9:34 am to Paul Allen)
If the money is put into this vehicle, can I get it out quickly and without a tax hit if I need it?
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I Love Bama 
Alabama Fan
Alabama
Member since Nov 2007
27940 posts
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That's a big arse emergency fund but I would put 20k of it in a Roth over the allowed time frame and keep 5 in cash.
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Maniac979
LSU Fan
The Great State of Texas
Member since Jan 2012
400 posts
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(no message)
This post was edited on 1/12 at 8:43 pm
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I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
27940 posts
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No tax penalties from taking your original capital out of a Roth. Zero
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rmc
LSU Fan
Zachary, LA
Member since Sep 2004
21213 posts
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| re: Emergency Fund (Posted on 1/5/13 at 10:33 am to I Love Bama)
quote:
That's a big arse emergency fund but I would put 20k of it in a Roth over the allowed time frame and keep 5 in cash.
+1. Stick it in some fixed income ETF or pimco fixed income fund would seem to be the best way to maximize return w/ little risk. It will beat the hell out of any savings account rates.
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CaribbeanDemon
LSU Fan
Caribbean
Member since Jun 2007
1215 posts
| re: Emergency Fund (Posted on 1/5/13 at 10:43 am to Maniac979)
quote:
If you are looking to do something with the money in three months
I am not looking to do anything with it. It will be strictly an Emergency Fund in case shite hits the fan and I need it. That is why I want a financial vehicle that will allow me to access the cash in the event I have to have it. I threw out the 3 month CD option b/c the money would not be tied up for very long.
As to the other posters discussing Vanguard Roth, that is a good idea and I will start an account. I have concerns though that I may not meet the eligibility requirements next year and years after.
I really appreciate the suggestions.
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Htown Tiger
LSU Fan
Houston
Member since Sep 2005
1686 posts
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Out of curiosity, is it even possible to put $20k into a Roth account all at once? I thought the limit per tax year is $5k?
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I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
27940 posts
| re: Emergency Fund (Posted on 1/5/13 at 12:14 pm to Htown Tiger)
Not to my knowledge. Hence why I said a timeline
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NaturalBeam
LSU Fan
Member since Sep 2007
12384 posts
| re: Emergency Fund (Posted on 1/5/13 at 2:37 pm to I Love Bama)
That's really not an excessive emergency fund if he is usin a 3-6 month expense basis like I was advised to do. My emergency fund goal is 30k which I'm very close to, so I also appreciate the answers here.
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The Easter Bunny 
Georgia Tech Fan
ATLANTA, GA
Member since Jan 2005
40401 posts
| re: Emergency Fund (Posted on 1/5/13 at 9:40 pm to NaturalBeam)
exactly, I've read to have 6 months of living expenses, so it isn't that outlandish. Then what about if you already fully fund your ROTH? There has to be more than just sub 1.0% savings accounts and ROTHs
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CaribbeanDemon
LSU Fan
Caribbean
Member since Jun 2007
1215 posts
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Exactly why I brought this topic up. I want to put away 4-6 months as an emergency stash and was looking for something other than a sub 1.0 savings account to put it in.
The Roth is a good idea but they have $5000 or so cap. That won't do me any good now.
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rmc
LSU Fan
Zachary, LA
Member since Sep 2004
21213 posts
Online
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quote:
Then what about if you already fully fund your ROTH? There has to be more than just sub 1.0% savings accounts and ROTHs
Just open up a brokerage account. Do the same thing you would do in a roth as an emergency fund -- low risk. You'll just get taxed on the earnings and capital gains if you take them.
This post was edited on 1/5 at 9:50 pm
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rmc
LSU Fan
Zachary, LA
Member since Sep 2004
21213 posts
Online
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quote:
The Roth is a good idea but they have $5000 or so cap. That won't do me any good now.
Do $5k for 2012, $5k for 2013. You can do both now. Stick the rest in a brokerage account for the time being in the same type of etfs/funds.
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fishfighter
LSU Fan
Baton Rouge
Member since Apr 2008
11832 posts
Online
| re: Emergency Fund (Posted on 1/6/13 at 5:23 am to rmc)
quote:
+1. Stick it in some fixed income ETF or pimco fixed income fund would seem to be the best way to maximize return w/ little risk. It will beat the hell out of any savings account rates.
This! You should be able to get the money you would need in a couple days.
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Danchase 
Georgia Fan
Member since Dec 2012
64 posts
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If this is SHTF money then buy a gunsafe and put your 25k in there.
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Lookin4Par
Northwestern Fan
Shreveport
Member since Jun 2012
631 posts
| re: Emergency Fund (Posted on 1/6/13 at 11:04 am to Danchase)
you are poor.
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CaribbeanDemon
LSU Fan
Caribbean
Member since Jun 2007
1215 posts
| re: Emergency Fund (Posted on 1/6/13 at 1:18 pm to Lookin4Par)
Take that shite to the O-T kid
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Lookin4Par
Northwestern Fan
Shreveport
Member since Jun 2012
631 posts
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stfu and piiyb
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