Chances are good, you’ve probably heard that you need an emergency fund large enough to cover three to six months’ living costs. Having money in an emergency savings account can help you cover unexpected expenses or cope with a reduction in income due to job loss.
Sometimes, however, people assume that they will no longer need this after retirement because they do not have to worry about losing their job.
The reality, however, is that it is just as important (if not more so) for seniors to have acute savings after leaving work. There are a few key reasons for this.
Why retirees still need an emergency fund
Unfortunately, once you are a senior, emergencies do not just stop. Even if you no longer run the risk of job loss causing income disruption, there is still a good chance that you may face unexpected expenses.
In fact, the chances of surprise costs may be even higher than when you were younger. This is because you are getting older and your health may be worse. And your house may age with you, so there may be a greater chance that you will need expensive repairs.
1. You can not rely on wage income
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