Business & Finance
Survey highlights emergency savings shortfall among U.S. workers amid rising debt
Data shows many households lack funds for unexpected expenses, prompting increased hardship withdrawals from retirement plans.
The short version
- A survey by SecureSave found that 55% of working respondents cannot cover a $500 emergency expense, with 41% reporting they skipped necessities like medical care or food.
- Federal data indicates total household debt reached $18.8 trillion in the second quarter, while hardship withdrawals from retirement accounts have tripled since 2020 at Vanguard.
- Lawmakers and employers are examining workplace emergency savings mechanisms, though adoption of provisions created by the 2022 Secure 2.0 law remains limited.
Key facts
- A June survey of 1,028 workers by SecureSave found 55% lack sufficient savings to pay for a $500 emergency expense, and 41% skipped necessary expenses such as medical care, food, or vehicle repairs.[CNBC]
- According to the Federal Reserve Bank of New York, total U.S. household debt stood at $18.8 trillion in the second quarter, with credit card debt at $1.26 trillion.[CNBC]
- Hardship withdrawals among Vanguard defined contribution plan participants increased from 2% in 2020 to 6% in 2025.[CNBC]
- A Vanguard analysis found that only 4% of 401(k) plans currently permit the $1,000 penalty-free emergency withdrawals enabled under the 2022 Secure 2.0 legislation.[CNBC]
- The Senate Committee on Health, Education, Labor and Pensions advanced the bipartisan Emergency Savings Enhancement Act to raise annual contribution limits for pension-linked emergency savings accounts to $5,000.[CNBC]
What remains uncertain
- It is uncertain whether the Emergency Savings Enhancement Act will pass the full Congress or accelerate employer adoption of pension-linked emergency savings accounts.[CNBC]