Over the last several years, the retirement industry has made significant progress on developing and implementing emergency savings solutions, with recordkeeping firms leading the way. While these solutions vary, the takeaway is clear: Adequate emergency savings is an important part of financial wellness and retirement security. These solutions, both those currently in use, and those being created, are guided by two key insights:
- Emergency savings should be its own “bucket,” meaning in an account that is distinct from funds intended for long-term retirement savings.
- Well-designed emergency savings accounts are effective buffers against early withdrawals from retirement savings.
The following policy brief, created in partnership with the Defined Contribution Institutional Investment Association (DCIIA) Retirement Research Center (RRC) outlines examples of solutions in market and learnings from the field.