Picture it. Life throws you a curveball, like a car inspection gone wrong or a sprained ankle. Can you afford it? It’s OK if the answer is no. In a recent survey, more than half of Americans don’t have enough money in their savings to pay for a surprise $1,000 bill.1 Many people might have to depend on their retirement savings, which can hurt their long-term goals. No matter how prepared you feel to handle an unexpected expense, Vanguard advice—and the resources that come with it—can help.
Emergency savings—make it work for you
You may have heard of the general rule: save at least three to six months’ worth of expenses in cash as emergency savings. But like most things having to do with your finances, your situation is unique, so the general rule may not be the best strategy for you.
The actual dollar amount you aim for in your emergency savings, and where you save the money, could depend on several factors, such as:
- Do you have kids?
- Do you rent or own your home?
- How do you feel about your job security?
- Could you rely on someone else’s income if yours fell through?
Taking the time to consider questions like these can help you feel better prepared to handle the smaller surprise bills, or something much more serious, like losing your job. It can also help you decide where to invest your emergency savings.
Choosing an investment strategy
An umbrella for a rainy day
Having the confidence to know you can afford unexpected expenses, and avoid putting your long-term goals at risk, is priceless. And our Rainy Day Tool—available when you sign up for a Vanguard advice service—can help you build that confidence. Here’s how.
It helps you figure out how much to save. The tool considers some of your basic financial info and asks a few questions about your unique situation to find a dollar amount that works for you.
A sense of relief
Get a sense of relief knowing you can handle unexpected expenses. Whether you want to do everything online or prefer to chat with an advisor, you can set yourself up for success with advice from Vanguard.
With the following advice services available through your employer's retirement plan, you get a financial plan, expert investment management, and access to the Rainy Day Tool.
Get low-cost investment management and advice for all your financial goals—entirely online.
Cost: About $15 for every $10,000 we manage each year.3
Requires a minimum $5 account balance4
Get unlimited access to our financial advisors, plus the sophisticated technology of digital advice.
Cost: About $30 for every $10,000 we manage each year.5
Requires a minimum $250,000 account balance6
1Source: Bankrate. Bankrate's 2024 Annual Emergency Savings Report. 2024.
2Taxes: Taking money from your retirement account can affect how much you’ll have to pay in taxes. You’ll owe taxes on pre-tax money. You won’t owe taxes on Roth earnings as long as you are age 59½ or older and it’s been at least five years since your first Roth contribution. If required by law, Vanguard will withhold some taxes for you. You may need to pay a 10% federal penalty tax if you take money out early.
3Actual costs vary. Digital Advisor will reduce your gross advisory fee by the amount of revenue (such as expense ratio rebates) that Vanguard (or a Vanguard affiliate) collects on your portfolio in order to calculate the net advisory fee. Digital Advisor’s annual net advisory fee is approximately 0.15% across your enrolled accounts for a typical investment portfolio, although your actual net fee will vary depending on the specific holdings in each enrolled account. Your net advisory fee can also vary by enrolled account type. Plan participants’ actual advisory fees will vary depending on your plan’s lineup and the revenue that Vanguard receives from those investments. Please see your plan fee disclosure notices for the applicable annual gross advisory fees that apply to your plan assets.
4To be eligible for Vanguard Digital Advisor, you must have either:
- $5 or more in your employer-sponsored retirement plan at Vanguard.
- $3,000 or more in IRAs and taxable accounts— owned individually or as joint tenants with rights of survivorship—at Vanguard.
5Actual costs vary. Personal Advisor will reduce your gross advisory fee by the amount of revenue (such as expense ratio rebates) that Vanguard (or a Vanguard affiliate) collects on your portfolio in order to calculate the net advisory fee. Personal Advisor’s annual net advisory fee is approximately 0.30% across your enrolled accounts for a typical investment portfolio, although your actual net fee will vary depending on the specific holdings in each enrolled account. Your net advisory fee can also vary by enrolled account type. Plan participants’ actual advisory fees will vary depending on your plan’s lineup and the revenue that Vanguard receives from those investments. Please see your plan fee disclosure notices for the applicable annual gross advisory fees that apply to your plan assets.
6To be eligible for Personal Advisor, you must have one of the following:
- $250,000 or more in your employer-sponsored retirement plan at Vanguard.
- $50,000 or more in IRAs and taxable accounts—owned individually or as joint tenants with rights of survivorship—at Vanguard.
- $250,000 total among your employer-sponsored retirement plan, IRAs, and taxable accounts—owned individually or as joint tenants with rights of survivorship—at Vanguard.
Vanguard Digital Advisor's and Vanguard Personal Advisor’s services are provided solely by Vanguard Advisers, Inc. (VAI), a registered investment advisor. Please review the Vanguard Digital Advisor and Personal Advisor brochure for important details about these services. Vanguard Digital Advisor’s and Personal Advisor's financial planning tools provide projections and goal forecasts, which are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.
