Typical recommendations are 6 months to 1 year of income. So if you make $50,000 a year in income you should have $50,000 in the bank. Let’s just say you do that and that $50,0000 earns 2% over the next 30 years, it would grow to $90,000. Less any taxes that you would have had to pay on the interest earned which is taxed at your highest tax bracket. Let’s say you also had that $50,000 actually invested and it earned 6%. In 30 years you would have accumulated @ $290,000. And potentially been taxed less at long term capital gains tax rate! When making financial decisions, you have to look at everything, not just the information right in front of you. I do still recommend having an emergency fund of 6-12 months, but it does not have to be kept in the bank earning very little. Other vehicles might be stocks, bonds, funds, cash value life insurance, savings and investments that give you quick access to funds if need be but also grow and work for you.
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Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.
James DesRocher Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 800 Westchester Avenue 4th Floor Suite N409, Rye Brook, NY 10573, 914-288-8800. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. TrueView Financial LLC is not an affiliate or subsidiary of PAS or Guardian.
2020-96033 Exp. 03/2022