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Employers Start Offering Emergency Savings Fund Benefit Option

A growing number of companies are making it easier for workers to set aside funds that will help them weather a financial crisis.

Sandra Block
Kiplinger’s Personal Finance
Kiplinger’s Money Power

Millions of Americans have little or no emergency savings, which leaves them without a cushion if their car breaks down, they fall ill or someone in their household is laid off. Now, though, a growing number of companies are making it easier for workers to set aside funds that will help them weather a financial crisis.

The trend reflects an effort to address a major source of anxiety in the workforce that can affect productivity, absenteeism, turnover and other issues that influence a company’s bottom line. A survey by the Employee Benefit Research Institute found that 47% of employees said that not having enough money to cover emergencies was one of their top sources of financial stress. Only 40% of employees said they could handle an unexpected expense of $500, and just 20% said they could handle an unexpected expense of $5,000.

Employers are adopting different approaches to help employees set up emergency accounts, typically through payroll deduction into a dedicated account. Fidelity Investments, a major provider of 401(k) plans, recently rolled out Goal Booster, which enables workers to deposit a small amount of money — $20 a week, for example — directly from their paychecks into an emergency account. The tool also allows employers to offer matching funds or other incentives that will encourage employees to save.

Delta Air Lines employees who set up a Goal Booster account and complete a two- to three-hour financial education program will receive $750 to kick-start their savings. Delta will then match up to $250 of employees’ contributions to the account. Fidelity has signed up 10 large employers, including Starbucks and Whole Foods, and plans to add 24 more by the end of the year.

Separately, the Consumer Federation of America is offering employers Split to Save (, a free resource they can use to set up automated savings accounts for their workers.

SECURE Act 2.0, enacted in 2022, included a provision that allows employers that offer retirement plans to provide workers with a special Roth account that can be tapped for emergencies. Eligible employees will be permitted to contribute up to $2,500 a year and take up to four tax- and penalty-free withdrawals a year. The IRS has provided employers with guidance on how to implement the accounts, but it likely will be a while before employers offer them because of the rules and recordkeeping involved.

How much do you need? Whether you create an emergency savings account through your employer or on your own, you should endeavor to have enough money to cover several months’ worth of living expenses. If you’re the sole wage earner, you should have six to 12 months’ worth of expenses set aside. Dual-income households may be able to get away with three to six months of emergency reserves, although if both partners work in a sector that’s sensitive to economic downturns you may need to save more.

Your emergency fund should be invested in a low-risk account that’s immediately accessible because you never know when you’ll need the money.

(Sandra Block is a senior editor at Kiplinger Personal Finance magazine. For more on this and similar money topics, visit

©2024 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.