Is it better to save for your emergency fund or save for retirement?
Retirement savings and saving for an emergency are both essential financial priorities.
You definitely need to start saving for retirement as soon as possible if you don’t want to be broke as a senior. Additionally, it’s much harder to save enough if you start saving late because you spent years working on building an emergency fund.
If you have a 401k at work and your employer matches your contributions, you typically should contribute as much as you need to earn the maximum match. There’s no reason to miss out on free money. However, if your job is unstable, you have serious health issues, or you’re at elevated risk for an emergency for some other reason, prioritizing your emergency fund might make sense.
If your employer doesn’t offer a match, then it’s a judgment call whether to devote all your spare cash to saving for an emergency fund or allocate some of your money to retirement savings too.
This is another area that I can help you analyze in a Power Plan session.