[Mase]

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)?

[Huck]

It is a semantic point, it's true. The context of the article is preparedness. When I think of emergency savings, I think of money set aside in whatever is closest to zero risk with no strings attached. That's regular savings. I also have CDs, which do a little better than passbook, and they are staggered so some is always close to being available.

401K is fine, but it's got serious strings attached. You can call it "retirement savings", but it's not what I think of as savings. It's an investment that is at risk, and that has strings attached designed to force you to not touch it til you reach a certain age. So for me, savings means low or no risk, and no strings. Of course you don't get a great return; that's not the point of savings, the way I use the term. I think you need to do all of it: invest and save.