re: Best strategy for emergency fund savings?

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Sure you can withdraw the principal, but you only get 60 days to replace it and then you've wasted that opportunity.

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One exception to this is the fact that you can replace the same year contributions all the way to April 15.


And as for the mentality in general, about a wasted opportunity: it is only true if you would otherwise be maxing out your Roth even without a plan to putting your emergency fund into it, which doesn't apply to the vast majority of investors.

If you aren't maxxing out your Roth already, then the only opportunity wasted is that of tax free growth of capital.

As for withdrawal: it all depends on what you put it into and what the vendor offers. I can get my money in a single business day. Also, no one said you had to put a 100% of it in an investment. When you realistically should have at least 20k in a fund, and often times more, I personally can't think of an emergency that would demand that much within a week.

Also, it's probably wise to have a couple grand serving as a cash buffer in savings for more minor events that aren't true emergencies.