Should We Use Our $1.2M in IRAs to Build an Emergency Fund If We Only Have $10k in Cash?

Core Insights - The article discusses the considerations for retirees regarding IRA contributions and emergency funds, emphasizing the importance of understanding income sources and financial planning strategies [3][4]. Group 1: IRA Contributions - Retirees may not be able to make IRA contributions unless they have earned income, which is typically derived from employment [3]. - If a spouse is still employed and has sufficient income, spousal contributions to an IRA may be possible [3]. - The process of withdrawing from an IRA to contribute to another account and then withdrawing again is deemed unnecessary and complex [4]. Group 2: Emergency Fund - An emergency fund is crucial for retirees, providing peace of mind and financial security [6]. - The traditional guideline of maintaining three to six months' worth of living expenses may be adjusted for retirees, especially if they rely solely on Social Security benefits [6][7]. - Since retirees may not face the same income loss concerns as pre-retirement individuals, a smaller emergency fund may suffice [7].