Your emergency fund is money you keep safe just in case you need it for something unexpected.

Your Roth IRA is a retirement account that’s traditionally invested for the long term.

There’s no way those things mix, right?


A Roth IRA is a tax-advantaged retirement account you open on your own, apart from your employer.

One of the key features of a Roth IRA is that you can withdraw up to the amount you’ve contributed at any time without any taxes or penalties.

As an example, let’s say you’ve contributed $10,000 to your Roth IRA over the years, and your total current balance is $12,000 because of the investment growth. In that case, you’re allowed to withdraw up to $10,000 (the amount you’ve contributed) at any time for any reason without any taxes or penalties.

Double Counting

It’s important to remember that money can never actually be used for two purposes. That is, money inside your Roth IRA might be available for either an emergency or retirement, but it’s not available for both.

Lost Growth

Emergency fund money should almost always be invested very conservatively so that you can be sure it’s there when you need it.

Using your Roth IRA as an emergency fund can be a helpful strategy if you have a limited amount of money to save, need to beef up your emergency fund…

…Above all, make sure that your emergency fund money is there when you need it and that you don’t accidentally run afoul of any IRA rules.

Source: How to Use Your Roth IRA as an Emergency Fund | Blog | Society of Grownups