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Author: Charlie48K Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 79093  
Subject: Re: Dipping into Retirement for emergency Date: 6/28/2001 4:04 PM
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Currently, I max my 457 contribution ($8500). I have no other savings vehicle at this time. I have plenty of debt which I am paying off. I have begun to have concern about my level of "emergency money". I'm speaking of real emergencies... medical, layoff, etc. Would it be Foolish to forego building up a sizable cash emergency fund and instead sock it all into the debt, while relying on the retirement as that emergency fund?

I'm not too familiar with the regs re: this, although I know you can take early distributions for some allowed expenses (such as medical bills).

IMO you need an emergency fund of from 3 to 6 months salary. A 457 fund can not be tapped except for extreme hardships. Your 457 plan has what's called a "hardship" committee and you have to prove to the committee that you've exausted all other forms of funds, including borrowing.
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