This is a YouTube video titled "How Much Should You Have In An Emergency Fund?" containing a monologue by Jim Dahle recorded in November 2023. In this English-language content, Jim Dahle discusses recommendations for emergency fund sizes, especially in the context of retirement and financial independence, explaining how retirees might adjust their cash reserves accordingly.
Most people Recommend Saving between 3 and 6 months of expenses in an emergency fund. This number should be made up of your necessary expenses because in an emergency you should cut back on some of your extras if you're close to or in retirement. Some people increase their cash to an emergency fund of one to two years worth of expenses since they don't earn a steady paycheck to back them up. But the truth is, if you have enough money to retire, your entire retirement nest egg functions as your emergency fund and so some people use that as an excuse to actually carry less cash. I would say most retirees are likely to have more cash than they had during their working years. But just like with life and disability insurance, the closer you get to financial independence, the less need you have for an emergency fund. And when you reach that financial independence, you don't need it at all. Even if you do increase your overall retirement account allocation to cash.
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