The difference between multiple months/years of emergency savings and retirement savings is intent (and timeline).

I could afford to take months or years off, but I’d rather let that money grow in an interest-bearing account for decades and spend it later.

Sure, but in any case having savings (even retirement savings) allows you to not "frantically" look for a job and be slightly more selective.

It is primarily psychological difference. I have 10 years of expense as savings. But that is tied in my retirement/emergency/child education plans. If I stop earning for 1 year, I'll be dipping in them which will create a pressure.

It's relative, but having to dig into your 401k isn't an attractive alternative, one I'd only consider in truly dire straits. You are capped in how much you can put in a year so it's not like a savings account you can aggressively make up for after getting hired.

I'd much rather resort to temp work than dig deeply into my future if I had a choice.

If I could help it I'd rather invest in

I have 3 kids. My grocery bill alone is 2.5k/month.

How are the people making 65k as a household (median income per household in my state) managing this? I don't even understand how 2.5k$ grocery per month is possible. We are 3 in our households (young kid) and probably spending closer to 1k$ per month groceries and eating super healthy/organic.

Keep in mind we have 5 in our household to your 3.

They probably eat cheaper food? We do a lot of fruits and veggies. But not organic. Eating out is too expensive, we don't do that.

Also, I live in Southern California, it might be cheaper where you are.

yeah, being 5 is a big difference. We usually end up going to Costco once a week for ~250$/trip

Tell me you have teenage boys without telling me you have teenage boys ;)

1. I'm not a software engineer, and don't live in or near the valley.

2. I'm married and I have two kids. It's amazing how fast multiple years of saving disappear when you have daycare.

Just to give you an idea of what childcare looks like: It's a very reasonable question whether we should pay for childcare, or hire a full-time staff member for the household to watch the kids: The price is about the same.

Yeah I get it. It's not easy. As a rule of thumb we are still aiming to live with 70% of our household income even with a kid so to mitigate for one of us being laid-off unexpectedly.

I guess it is a trade-off. We could live slightly better in a bigger house but I don't want to stress and be in a tough spot if one of us lose their job. That mental sanity is worth 30% of our income to me.

Same, my rule is my gross yearly salary or 24 months all recurring expenses whatever is larger. I try to set my lifestyle to where the 2 years expenses are 70% of gross salary which is honestly not terribly difficult as a dink.

Peace of mind for the cost of "only" making 4.65% interest is well worth it to me.

I'd rather not tip into my savings if possible. All of my savings are also not liquid.