4% of employers offer new emergency savings plans for workers. How to save for emergencies with or without your company

Core Insights - The rising cost of living has increased nearly 25% since December 2020, making it difficult for many Americans to save money [1] - A Bankrate survey indicates that only 47% of Americans have enough savings to cover a $1,000 emergency expense [2] Group 1: Emergency Savings Options - The Secure Act 2.0 introduced two new emergency savings options for employers in 2024: penalty-free withdrawals of $1,000 per year from retirement savings and a linked emergency savings account with a contribution limit of up to $2,600 for 2026 [3][4] - Despite these options, only 4% of companies have adopted the emergency 401(k) withdrawals, and pension-linked emergency savings accounts have seen minimal interest from plan sponsors [4] - A significant reason for the slow adoption is that 94% of companies already have some emergency withdrawal plans in place [4] Group 2: Challenges in Implementation - High-earning employees, those making $160,000 or more annually, are excluded from eligibility for these new plans, complicating administration for companies [5] - The executive director of the Plan Sponsor Council of America noted that companies will analyze the ease of implementation when considering emergency savings programs [6]