You can look all over the internet and find numerous articles about America’s retirement crisis. However, you won’t find too much attention given to America’s emergency fund crisis.
The numbers are incredibly crucial: Nearly half of U.S. households lack a basic personal safety net to prepare for emergencies and 140 million Americans have little or no savings at all, according to a recent CFED study. In a Federal Reserve survey, 46% of Americans said they’d have difficulty with an emergency expense of $400.
Clearly, there’s a major problem. PerkUp has created a program to help with a solution by offering automatic payroll deduction emergency savings plans similar to a retirement 401(k). Having your money in a liquid savings account can eliminate the tax burden of borrowing from your 401(k) if an emergency arises.
Employees don’t have a personal savings cushion outside of their retirement plans, so we realized there was an opportunity to apply the same principal of automatic contributions out of paychecks for short-term savings as with 401(k) plans.
PerkUp provides an “off-the-shelf” product that employers can grab and implement. The PerkUp Program allows employees to open a Credit Union sponsored savings account – similar to an emergency-fund 401(k)s to allow employees to automatically divert a portion of their paychecks into the easily accessible account and build up emergency funds. The savings gets swept to the account automatically on payday. PerkUp also incorporates a “rewards” platform for anyone who is enrolled in the program, giving employees awards for saving.
Making saving effortless and rewarding is key in building up emergency funds, and PerkUp believes it can help with America’s emergency fund crisis!