Why is it important to have an emergency fund separate from retirement savings?

Having an emergency fund separate from retirement savings is crucial because it allows individuals to manage unexpected expenses without impacting their long-term financial security. When emergencies occur, such as medical expenses, car repairs, or job loss, accessing funds from a dedicated emergency fund helps prevent the need to tap into retirement accounts. Withdrawing from retirement savings can lead to penalties, reduced future growth potential, and may jeopardize one's ability to retire comfortably. By maintaining a separate emergency fund, individuals ensure they have liquid cash available for immediate needs while preserving their retirement savings for their intended future use. This approach fosters financial discipline and security, making it easier to navigate unforeseen challenges without derailing long-term financial plans.