When discussing financial planning with clients, I'm reluctant to use the term "rule of thumb." Bite-size nuggets of information disguised as advice often don't address the complexity of clients' actual circumstances.
Case in point: The idea that an emergency fund should contain at least three months of earned income or at least six months of essential expenses. For baby boomers entering distribution mode, this approach may well miss the mark. Instead of discussing an emergency fund with your clients, perhaps it's time to help them develop an emergency plan - a strategy that takes a more holistic view of their financial situation in the event of an unexpected crisis.
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