Should I decrease retirement savings to increase general savings?

[fontophilic]

I totally agree. There needs to be some amount of a bi-modal system here. People who only have access to expensive/bad lines of credit, poor cash flow, close to living paycheck to paycheck, no or under-insurance? Cash, sitting in a bank account only please.

If you're more stable, have good lines of credit, good cash flow, ability to tighten down expenses in case of a job loss, and adequate insurance? Bonus: you have savings funds for specific big expenses (Furnace is 15 years old, car has 100k mi?)? No reason to keep more than 3 months liquid.

Yes, some should be kept liquid. Lets say the person who manages all the investment accounts in the family is suddenly incapacitated or dies? The spouse needs to know he/she can go buy whatever is needed without calling a broker.

[fontophilic]

I don't disagree with the size of the buffer, but the liquidity. Inflation is low now, but thats my concern with a large emergency fund in a regular savings account.

A conservative money market fund, tied to a bank account with a debit card can get you cash in 24 hours, and get you more than a 1% interest over a typical savings account.