Tell Congress you need help saving for emergencies
A workplace benefit everyone wants and needs is an emergency savings account (ESA). Most Americans can’t cover a $1,000 emergency expense. The solution is an ESA, automatically set up and funded through your employer, but right now there are barriers to employers offering this benefit.
Several emergency savings provisions are being considered in Congress right now to ensure employers can offer automatic enrollment into high-quality ESAs. For example, Senators Todd Young (R-Ind) and Cory Booker (D-NJ) recently introduced bipartisan legislation, the Emergency Savings Account Act of 2022, to help American workers build an ESA automatically through their paycheck.
Sign the petition below and ask your representatives in Congress to remove savings barriers, so you can get automatic access to emergency savings through your paycheck.
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Let Congress know you want emergency savings
Discover peoples’ emergency savings stories and why legislation in Congress is essential. Sign the petition to let your representatives know you need easy and automated access to a workplace emergency savings account.
“This is why I have an emergency fund. … I spent about an hour today thinking he probably tore his ACL and needed fairly expensive surgery. Knowing I could just write the check and not have to worry about anything but getting him well was a good feeling.”
“I have 7,500 dollars saved up with 500 in my checking account after so long. I FINALLY FEEL FREEE!!! I feel like I am above water for once and okay. i’ve been working to get to this point for so long, and I am finally here.”
“Unfortunately, we don't have money to fix the house other than small items.. If the roof started to leak we could access the emergency fund to handle that expense, but then must fund the emergency fund first....”
“My real-life week, this week, has drained every penny I had saved, and I'm currently begging dentists for a break on any costs that I incur.”
“Plumber came and fixed the pipe to our outdoor faucet on Wednesday. The same day the car was inspected and needed a fair bit of maintenance work done to pass. $900 bled out by the end of the day, but it didn’t keep us from eating or paying the bills. Now to hope nothing major happens before we can set some more money aside again.”
Hundreds more stories just like these
FAQs
The questions you have about ESAs and the Emergency Savings Act of 2022
An Emergency Savings Account (ESA) is an account, either out-of-plan or in-plan (part of a 401(k), 403(b) or similar) to help you save for emergencies. Many financial experts, like NYTimes bestseller Suze Orman, advocate for having a minimum of three months of expenses saved in an emergency savings account. An ESA should not be an investment vehicle, but rather a savings account ready to access when you need it for unexpected medical needs, car breakdowns, or other necessities.
An employer-sponsored ESA is an emergency savings account provided by your employer. Money can be deducted directly from your paycheck, with the ability for your employer to match your contributions, similar to a 401(k). Both in-plan (part of a retirement plan) and out-of-plan options exist, with out-of-plan options providing more flexibility.
Out-of-plan ESAs allow employees to access their funds outside of the constraints of their retirement plan, while in-plan ESAs are tied to a retirement plan.
Saving money is hard. Putting away a small amount every paycheck (with employer match) makes it easier. Auto-enrollment is a powerful tool to deliver access to emergency savings to all Americans. Current legislative efforts recognize the importance of auto-enrollment for emergency savings vehicles.
Several emergency savings provisions are being considered in Congress, as part of broader retirement security legislation.
The Emergency Savings Act of 2022 is bipartisan legislation sponsored by Senators Cory Booker (D-NJ) and Todd Young (R-Ind). The bill facilitates convenient and affordable access to workplace emergency savings accounts through in-plan options, allowing employees to save up to $2,500 after-tax annually (also the account limit). Employers could automatically enroll their workers at up to 3% of their salary, contributions which the employee could adjust or opt-out of at any time
Senators Young and Booker previously introduced the Strengthening Financial Security Through Short-Term Savings Accounts Act of 2021, which would allow employers to auto-enroll employees in out-of-plan workplace emergency savings accounts. These accounts would have no balance maximums, more flexible withdrawals, and would not be tied to retirement savings programs.
Senators Michael Bennet (D-CO) and James Lankford (R-OK) have also introduced the Enhancing Emergency and Retirement Savings Act of 2021, which would allow one penalty-free "emergency distribution" of up to $10,000 per year from retirement accounts.
All approaches are currently being considered for inclusion in the bipartisan SECURE 2.0 package, which is Congress’s initiative to increase access to workplace retirement and other savings in 2022. This legislation is currently undergoing revision in the Senate, before it will be merged with the House’s already-passed SECURE 2.0 Act.
You can get involved by submitting your story and contacting your U.S. Senators and Congressperson to advocate for Emergency Savings Account legislation. Lack of savings is a problem almost all Americans face — 56% are unable to cover an unexpected $1,000 expense.
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