Start Saving Money Now in Your Employer’s Emergency Savings Accounts

Financial, economy and home savings ideas Businessman grasping money and calculating financial budgets for future emergency use.

When the SECURE 2.0 Act (Setting Every Community Up for Retirement Enhancement) passed, it included provisions for employers to help their employees have an emergency savings account (ESA). Starting in 2024, it would only include employees who were not considered highly compensated—those making less than $155,000.

Even though the savings account is linked to the employee’s retirement account, they can withdraw money without penalties. Employers found the account rules complex, so some companies have created emergency accounts for their employees outside their retirement plans.

Most Americans Have No Emergency Savings

The new provision in the SECURE 2.0 Act was made because only about 25 percent of Americans have an emergency fund. As few as 39 percent have saved only one month’s worth of expenses.