Other things to consider in computing for your EF
- hospitalization should be included which is approximately 100K-200K
- should add about 10% to cover for inflation or price increases
- food expense should be doubled since you'll be spending most of your time at home
- Other utility bills like electricity and water consumption might increase as well.
- insurance premiums and other pre-need plans should be included.
Where to Keep it
1.Bank/Passbook w/o ATM
PROS: Short term vehicle, Easy Access
CONS: Interest is small.
2.Time Deposit (Preferably 30D only)
PROS: Interest is higher than Regular Savings Account
CONS: With charge if you withdraw prior the maturity date.
3. Mutual Fund/UITF
PROS: Potential higher return.
CONS: Not as safe as deposit accounts because it depends on market status. Liquidity - withdrawal takes 3-5 working days.
In summary, according to Sherwin, the key words would be liquidity, accessibility and safety because the objective of this fund is not for growth, but for emergencies. HTH. You can also share some thoughts here.