How to Create an Emergency Fund for Retirement
As a senior, you'll ideally have a number of income sources available to you. These could include withdrawals from your 401(k) or IRA, Social Security benefits, and maybe even income from a part-time job.
But while having a steady flow of money coming in is a good thing, it doesn't negate the need for a solid emergency fund. Just as workers should aim to have three to six months' worth of living expenses sitting in cash in a savings account, retirees should have reserves on hand for unknown expenses.
You may be thinking: "Why do I need emergency savings in the bank when I have other income sources available?" And here's the reason: If a very expensive, unanticipated bill lands in your lap and you just spent your last Social Security payment, you'll be waiting a month until your next one comes in. Meanwhile, your paycheck from a part-time job may only cover a fraction of that bill.
Source Fool.com
