In the world of retirement strategizing, the focus tends to be on 401(k)s, IRAs, pensions, or other retirement investment accounts. But that doesn’t mean you should forget about the traditional savings account.
Savings accounts can have many uses, but for starters, it’s a great place to stash cash for emergency situations. Financial experts recommend keeping 3 to 6 months’ worth of money in a savings account to cover emergency expenses. Even if you have no foreseeable expenses, there is no way to predict the future, so it’s not impossible that you might need cash on hand to cover an expense.
In addition, savings accounts can be a place to store money for large expenses such as a down payment on a home, buying a car, spending on hobbies, or taking a vacation. Even if there are no foreseeable expenses in the future, your money in these accounts earns interest and can grow over time.
You might be wondering, “I have a 401(k) and an IRA. Why do I need a savings account as well?”
When it comes to your savings, different accounts have different uses. If all you have for savings is in retirement accounts, your withdrawals from those accounts could be subject to an early withdrawal fee if you need it for an emergency expense.
The bottom line is that savings accounts can provide you with a place to keep cash for an emergency expense or a planned expense you’re saving up for. And as a bonus, the cash you keep there has the potential to earn interest.
If you have questions about the savings and investment vehicles that make up your financial picture, contact us at (603) 261-3736 to get started with a financial professional.
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Bob has a passion for making your money work hard for you. He takes profound joy in ironing out a plan for a long and comfortable retirement, no matter what your current income or level of wealth. With a work ethic second to none, he has a zeal for transforming uncertainty into stable ways for you to protect your future and your family. He knows that the quality of your life you enjoy today can remain as rewarding—or even better—after retirement.
With a strong background in information technology, Carol is instrumental in building operational policies and strategies that keep the organization functioning smoothly. Carol’s organizational skills and her flexibility to jump from priority to priority along with her commitment to customer service makes her an essential part of the Grimard Financial team. When Carol is not working with the Grimard Financial Family, she is a very creative and accomplished photographer.