When a thread popped up in r/UpperMiddleFinance recently asking others to share their emergency fund strategies, many chimed in, and the numbers were eye-popping. Respondents reported emergency savings well above the typical three to six months of expenses often recommended by financial advisors.

Substantial Buffers, But For Good Reason

One contributor said they were reducing their emergency fund from $50,000 to $40,000, which covers six months of expenses for their household. As many large expenses are now behind them, they are working on getting comfortable with holding less cash.

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But for many others, $40,000 would be just the starting point. One person shared, “We keep $100K in an emergency fund, but our expenses are $10K – $12K a month.” Another described holding $140,000 in savings to cover one year of living expenses while juggling daycare and private school costs for two children. “We could probably float for five years with no adjustments to lifestyle… which helps me sleep at night.”

Many commenters emphasized how their job stability and risk tolerance shaped their strategy. A person working in tech, who recently experienced a layoff, said their family had kept $23,000, or about two months of expenses, until that buffer got tested. “My husband was laid off” they said. “Between his severance and our current savings, I think we could last about 18 months, as long as I'm not laid off next.”

Upper-middle-class commenters also debated how much is too much. One individual with a net worth over $10 million said they keep $120,000 in cash, calling it a modest hedge against market volatility. “Any gain on this money is negligible, but the peace of mind is valuable to me.”

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Where It's Stored And Why That Matters

Most keep their emergency funds in high-yield savings accounts, money market funds or certificates of deposit ladders. A few retirees and early retirement-minded savers hold two to three years' worth of expenses in cash or near-cash to avoid selling investments during a downturn.

Several contributors take a tiered approach, starting with immediate cash to cover a few months of expenses. Beyond that, they maintain backup access through brokerage accounts or Roth IRAs, and in worst-case scenarios, they're prepared to draw from 529 plans or use available credit lines.

While there was disagreement on the exact number to aim for, there was consensus on one thing: having a plan brings calm. 

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There's no one-size-fits-all answer when it comes to emergency funds. For higher-earning households, the right amount depends on factors like job stability, family size and how easily other funds can be accessed. Domain Money, a financial planning service, offers free strategy sessions with certified financial planners to help individuals tailor a plan that actually fits their lives.

As one commenter put it, “We don't plan for what we expect. We plan for the unexpected.” And with inflation, layoffs, and costly emergencies more common than ever, that mindset is helping upper-middle-class households sleep better at night, even if it means parking $100,000 or more in cash.

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