Are You Financially Prepared for an Emergency? by Brendan T. Hayes

Posted on September 29, 2016 by Richard Berkowitz

It can be assumed that the more wealth individuals have, the better equipped they are to cover unplanned expenses.  However, according to a recent poll conducted by the Associated Press-NORC Center for Public Affairs Research, 38 percent of households earning more than $100,000 a year admitted that they would have some difficulty coming up with $1,000 to pay for an emergency.


No one can predict the future with 100 percent certainty. Even the best laid plans can be derailed by an unforeseeable event, whether it be minor damage to a car or home or a more serious illness or loss of a job.  However, little thought is often given to these all-too common situations, leaving a large number of individuals vulnerable and unprepared to deal with an unexpected financial crisis.


An emergency fund is an important component of a sound financial plan and key to an individual’s long-tern financial and emotional well-being. Ideally, an emergency fund should contain three to six months of living expenses, including costs for housing, utilities, transportation, child care and food. For retirees, an emergency fund should cover expenses over a longer timeframe to make up for the lack of wages to replenish the fund.


An emergency fund should be kept liquid, in a savings account or other vehicle, separate from retirement plans or investment accounts, where they may risk a tax penalty on early withdrawals or potential losses due to market swings.  Diligence is required to start building the fund and avoid spending the stash of cash on anything other than important, life-sustaining expenses.  After an emergency occurs and money is taken to pay for needed living expenses, individuals should develop a plan to replenish these funds to cover the next unexpected surprise.


Like most things in life, building an emergency fund requires advance planning and organized preparation.  While no one can plan for every possible situation, failing to have a plan could result in significant damage to one’s lifestyle and survival.


About the Author: Brendan T. Hayes is a financial planner with Provenance Wealth Advisors, an independent financial services firm affiliated with Berkowitz Pollack Brant Advisors and Accountants, and a registered representative with Raymond James Financial Services. He can be reached in the firm’s Boca Raton, Fla., office at (561) 361-2001 or via email at

Provenance Wealth Advisors, 515 E. Las Olas Blvd., Ft. Lauderdale, FL 33301 (954) 712-8888.

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Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors and Accountants.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of PWA and not necessarily those of Raymond James. You should discuss any tax or legal matters with the appropriate professional. Prior to making an investment decision, please consult with your financial advisor about your individual situation. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete.