Yay! I shall investigate this!

If you have a choice between making a Roth IRA contribution or having an emergency fund, I believe you should make the Roth IRA contribution. Ideally, of course, you should do both. But if you’re in danger of missing the contribution deadline and the only way to contribute is to drain your emergency fund, you should do so. Note: don’t be silly and contribute money which you know you’re going to need, just the excess which would normally be in the emergency fund. The reason why you do this is because the Roth IRA can act as an emergency fund. Contributions (though not earnings) can always be withdrawn without taxes or penalty. The only thing you do lose is the ability to make that Roth IRA contribution (since you can’t redeposit it once it’s withdrawn), but you were going to lose that anyway.

This strategy wins very big if you never need to take out the contributions and are able to rebuild your emergency fund. The only possible risk is that you will need to withdraw the funds for an emergency and the market has gone down since you made the contributions (so you don’t have the full emergency fund). However, this risk isn’t very large (it requires two bad things to happen — the market to go down and an emergency to occur before you’ve restocked) and it’s likely that the money lost will be fairly minor (at most 10-15%), barring a market crash.