I have an account specifically for "rainy days" like this that is separate from my retirement. That way I'm more comfortable with it.

All you are doing is changing the label. The cost is still the same.

What's the cost? Opportunity cost? You can still put it in a money market account when it's inactive.

If you put money for example into one of Vanguard's "Retirement 20xx" funds you can make some pretty good returns that you can use to retire earlier. If you are in your 30s by the time you retire the money would have increased about eightfold as the grand parent said. Since you will have to pay taxes on those gains if it's not a 401k you will likely only end up with like 4-6x of what you have right now. So one month off due to these shenanigans could be 4-6 months of earlier retirement.

That is all true but it still doesn't negate the fact that you should have a rainy day account and having said account has a high cost because:

1. Those 401K's and IRA's have a yearly cap, so anything above that cap doesn't apply. 2. Saving your "rainy day" account is a one time thing. Once you reach 4-6 months of income, you are done. 3. Like we agree, you can put it in a non-tax sheltered fund.

Also, not sure if you are going to get 8x return in 30 years. Maybe 50 years ago. When I was in college you could expect to double your money ever 7 years. I don't believe that's still the case.

I am not arguing against having a rainy day account. You should absolutely have one. I am arguing against tapping into it to take a few months off till Idaho's non-compete period expires. Over the last few years I made ~9% on my Vanguard investments. Vanguard's Retirement 2045 fund made 11% in the last 5 years and 5% in the last 10. That's all still much better than having it wast away in a money market account. You still can get the money out within days.

Oh, most non-compete agreements I've seen are for at least a year. A rainy day fund isn't for waiting that out. A rainy day fund is so you aren't desperate enough to have to take a job that requires you to sign a non-compete like that in the first place.

presumably the op retirement is in a pension or 401 for the tax benefits an emergency fund is just cash.

Saving and investing are two different things. What's your point?