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Maybe the point has been covered before, but it seems to me $100K is a very large emergency fund. Needs vary, but I would think that $100K could be split into a tiered investment system--covering emergency needs but providing better returns with the rest of the money.

Yes, your short term emergency fund needs to be appropriately sized and available. But what expenses are anticipated?

1. A hospital stay usually gets sent to insurance company and Medicare first. You can have a month or so before the cash is needed.

2. Nursing home. Usually you need an initial deposit and perhaps a few months of charges. But often these are planned after some event giving time to arrange finances if you have the assets.

3. Funeral expenses. Situations can differ depending on if you have prepaid arrangements and level of service desired.

What else is there?

I think most would need no more than $25K in their shortest term emergency fund. Much of that can be covered by a credit card. A bond fund with check writing privileges should cover it. You take the risk that if the event comes up you might take a bit of a loss on the money needed, but that is balanced by the certainty of better return on the other funds.
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