Tuesday, U.S. Senators Todd Young (R-Ind.) and Cory Booker (D-N.J.) joined the Bipartisan Policy Center for a virtual discussion on their ongoing efforts to expand access to emergency savings to help workers and employers, which includes their Emergency Savings Act of 2022.
The Emergency Savings Act would help Americans save for unexpected expenses without having to tap into their retirement accounts. It would facilitate convenient and affordable access to workplace emergency savings accounts, improving financial security and reducing retirement savings leakage.
“The lack of emergency savings in particular is a source of great frustration and even stress – daily stress – for a lot of my constituents regardless of their income level,” said Senator Young during the discussion. “There needs to be more attention paid to the emergency savings challenges in this country and more tools given to rank and file Americans, which is what we’re trying to accomplish here.”
According to a report by the Federal Reserve, almost half of Americans would struggle to cover an unexpected $400 expense. A recent study found that, in the past year, almost 60 percent of retirement account participants who lack emergency savings tapped into their long-term retirement savings, compared to only nine percent of those who had at least a month of emergency savings on hand.
In September, the Emergency Savings Act was selected for the National Taxpayers Union’s 12th annual “No Brainers” list. The bill was also passed by the U.S. Senate Health, Education, Labor & Pensions Committee this year as part of the RISE & SHINE Act. To hear what supporters of the bill are saying, click here.
The bill builds upon work by Senators Young and Booker to develop this concept over the last several years, including the Strengthening Financial Security Through Short-Term Savings Accounts Act of 2021.
To watch the discussion, click here.