Split Emergency Savings Fund, Invest Half?

Split Emergency Savings Fund, Invest Half?
News from Fox Business:

Dear Dr. Don,

I am in my early 30s with a young family. Is it a good idea to put up to half of my rainy-day fund into my Roth individual retirement account? What can go wrong if half is in cash for quick access and the other half is in the retirement account ready to pull out if needed? Obviously, not all the money saved into the Roth will be for the emergency fund, but it doesn’t make sense to me to keep all money that may or may not be needed on the sidelines.

Thanks,

-Greg Go-Long

Dear Greg,

The idea behind an emergency fund is to have three to six months’ worth of savings readily available for a financial emergency such as losing your job or needing a major household repair. Having that money liquid saves you from having to dip into less-liquid investments and potentially having to take a loss on an investment to free up funds.

In an ideal world, you’d never need to tap your emergency fund, so consumers view the idea of having that much money earning a low yield in a savings account as a drag on their investment returns.

You contribute after-tax dollars to a Roth IRA. The withdrawal of your contributions prior to retirement doesn’t create a tax obligation. But if you withdraw the account’s investment earnings before age 59 ½ and the…………… continues on Fox Business

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Portfolio management tips by Hemant Rustagi
News from Moneycontrol.com:

Hemant Rustagi of Wiseinvest Advisors spoke to CNBC-TV18 about his views on portfolio rebalancing.

Also Read: Want to invest in gold? Read before you take a decision

Below is the verbatim transcript of Rustagi’s interview on CNBC-TV18

Q: We have spoken about the importance of investors having to review their portfolios in the past. The next obvious step is then rebalancing of the portfolios. How should an investor go about doing this, rebalancing their portfolio and how often should it be undertaken?

A: I would say the portfolio rebalancing is the next logical step after one has reviewed the portfolio. That is…………… continues on Moneycontrol.com

… Read the full article


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