WASHINGTON (WANE) – Do you have a retirement fund? Indiana Sen. Todd Young and Sen. Cory Booker introduced a new bill today to help Americans save for unexpected expenses without having to tap into those funds.
The Emergency Savings Act of 2022 would help create convenient and affordable access to workplace emergency savings accounts, improve financial security and reduce retirement savings leaks. It would allow employees to create an Emergency Savings Account of up to $2,500.
The new bill by Senators Young and Booker is their next step to develop the concept over the last several years, including the Strengthening Financial Security Through Short-Term Savings Accounts Act of 2021.
“We can’t always predict the future, and too many Hoosier families encounter situations where they struggle to cover unexpected expenses through no fault of their own. Unfortunately, this can cause families to dip into their retirement savings, which harms their financial future. Our bipartisan bill would help families create stable emergency savings for unforeseen expenses, while keeping retirement accounts intact for the future,” said Sen. Young.
Sen. Booker also touched on the struggle many Americans face when it comes to retirement.
“We know that many Americans are struggling to make ends meet, and that even a small, unexpected expense or emergency can send families into a financial spiral that puts them even further behind. At the same time, for many of these workers, retirement is becoming out of reach. I’m proud to work with Senator Young to address these savings crises by creating opportunities for workers to build savings for short-term, unexpected costs while also putting them on a pathway for a more financially secure retirement. Building on our past work, this bill will allow employers to offer workplace savings accounts that will make it easier to save, promote financial stability, and help workers build their retirement funds,” said Sen. Booker.
Vice President of the Bipartisan Policy Center Jason Fichtner spoke on how the bill could help employers.
“Employers have a vested interest in improving their workers’ financial resiliency. Near the top of the list should be helping workers better respond to unplanned expenses so that they can avoid prematurely raiding their retirement savings or pursuing high-cost credit alternatives. Legislation that would make it easier for employers to offer employees automatic, short-term savings vehicles in a manner similar to their 401(k)s is a positive step forward,” said Fichtner.