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Ask Dave

Not Really an Emergency

Dave doesn't think Laura has the best plan for using her emergency fund.

QUESTION: Laura in Missouri wants to use part of her emergency fund to finish funding her 2012 Roth IRA. What does Dave think?

Dave's ANSWER: Don't file your tax return until April 17, which is when it's due this year. As long as you haven't filed your return, you can still contribute to your Roth IRA from the previous year. Save until then and put as much cash in as you can, but don't use your emergency fund to fund a Roth IRA.

Fund as much as you can between now and April for last year without touching the emergency fund. You won't miss your goal by that much.