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A personal finance rule of thumb is to save six months' worth of wages. The object is to protect the family against the loss of a job. How many of you out there have six months' worth of savings?

This is what they mean by savings. With the penalties you get for early withdrawal from 401K, not to mention the basic fact that it's intended use is as a retirement investment, not as rainy day savings, you can't consider it saving for rainy days ahead.

I invest 20% of my paycheck in 401K, but I also have 6 months of income tucked away in CDs, staggered so that some of it is always available if trouble strikes, plus I keep a decent amount of cash in a passbook savings for immediate access, plus what's buried in the yard. THAT'S savings.

Just kidding about the buried in the yard part.

>>Just kidding about the buried in the yard part.<<

How will you cash a check if the power goes down for two weeks?

Keep some cash handy!

This is what they mean by savings. With the penalties you get for early withdrawal from 401K, not to mention the basic fact that it's intended use is as a retirement investment, not as rainy day savings, you can't consider it saving for rainy days ahead

Maybe we should define our terms. I say savings is anything that accrues interest. If my 401(k) is invested in instruments that accrue interest, why wouldn't that be considered savings? Can I not borrow against my 401(k)?