Can an emergency fund actually be too large?

Yes. Once you comfortably cover your worst realistic scenario, extra cash beyond that mostly loses ground to inflation instead of growing. If you are holding well over twelve months of expenses in savings while still carrying high-interest debt or missing out on tax-advantaged retirement space, that money is likely underworked. The fix is not to shrink your safety net but to redirect the surplus once the net is genuinely adequate: capture any employer match, pay down costly debt, and fund retirement or brokerage investments for long-term growth. The right size balances two risks, keeping too little and getting caught short, versus keeping too much and forgoing decades of compounding. Reassess your target as your income, obligations, and stability change rather than letting cash pile up by default.