Financial planners are recommending that clients increase emergency fund targets to keep pace with inflation, noting that a fund set at pre-pandemic levels may now cover fewer months of expenses.
The traditional three-to-six months of expenses guideline remains sound, but the dollar amounts have climbed substantially. Dual-income households may maintain smaller reserves than single earners.
High-yield savings accounts are the preferred vehicle for emergency reserves, offering competitive yields while maintaining full liquidity and FDIC insurance protection.
