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When the Covid-19 pandemic hit, many Americans felt the financial impact of a sudden drop in income.
If the same type of event were to occur today, many people would still be in financial difficulty, according to a poll conducted by the Bipartisan Policy Center, the Funding Our Future coalition, and Morning Consult.
In addition, government-provided stopgap measures, namely stimulus checks and monthly child tax credit payments, are no longer available to help curb financial hardship.
But one solution, emergency savings plans provided through employers, could help, according to the report.
The survey found that 42% of employed Americans feel very or somewhat financially insecure. Additionally, 24% have zero savings set aside for an emergency expense.
In particular, the survey does not take into account the 40% of adults who are not employed. If it did, the emergency savings shortfall would likely be even more pronounced.
One-third of working adults say they would be very or somewhat uncomfortable with their ability to afford a $400 emergency expense. Furthermore, 8% indicated that they could not afford it at all.
At the same time, 30% of Americans said they could cover a month or less of expenses if their income disappeared.
Those most likely to struggle include parents, as well as workers with less than $50,000 in income.
Employed adults have struggled in the past 12 months when it comes to paying down debt, which was cited by 47% of respondents. It is followed by the payment of utility bills and telecommunications, 46%; rent or mortgage, 44%; credit cards, 42%; food, 41%; transportation, 31%; clothing, 19%; recreational goods, 15%; student loans, 14%; childcare or tuition, 9%; and others, 4%.
The online survey was conducted on February 10 and included 1,600 employed adults.
About 14% of workers have borrowed or withdrawn money from their retirement accounts in the past year, according to the survey.
If employers offered another benefit, emergency savings accounts, that could help employees build a financial cushion and keep them from dipping into their long-term investments.
Like retirement plans, emergency savings accounts would be tied to payroll. Workers could choose to set aside an after-tax portion of their paychecks for their emergency savings funds. In the event of an unexpected event, they would be able to access the money without penalty.
The survey found that 60% of employed adults would be interested in this option.
Currently, only 21% of workers say their employer offers an emergency savings account in the workplace.
According to research, interest in these potential benefits is particularly high among young, black, and Hispanic workers, as well as among parents.
In fact, the Strengthening Financial Security Through Short-Term Savings Accounts Act introduced by Senator Cory Booker, DN.J., last year would address that problem. However, it is unclear whether the proposal will go ahead.