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You shouldn't retire your emergency fund.

One key tenant of personal finance is having an emergency fund for financial rainy days. A common rule of thumb is to set aside about six months' worth of income, which is easy to calculate when you are working full time. However, since you are withdrawing from savings in retirement, you may not think you need an emergency fund, but you do. We recommend heving enough cash set aside to cover six to 12 months of living expenses, both before and after you retire.

 While that money will come in handy if you need a new water heater or refrigerator, you may also find yourself opening your checkbook for your aging parents or adult children. Maybe you want to help a child with a down payment on a house or help put a grandchild through college. Or, perhaps you find yourself helping to pay a parent's medical bills after an illness. Whatever the occasion, having immediate access to cash means you have more flexibility when needed.


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