Twenty percent of Americans would charge their credit card for an emergency bill of $1,000.
Many studies have been done on how Americans are ill-prepared for an emergency. Many would have to dip into their savings or use another form of payment besides using an emergency savings fund. As a part of the new SECURE Act 2.0, there is a provision to help plan participants save through employer-sponsored emergency savings.
Starting in 2024, Employers can automatically enroll their employees into emergency savings accounts with a contribution rate of no more than 3%. Contributions would be made within the retirement plan, and the first four withdrawals from the account would be tax or penalty-free. A BlackRock study found that plan participants are more successful with long-term finances if they have emergency savings. When discussing the SECURE provision around emergency savings, Joe DeBello stated…
The more opportunities you give participants, the more likely they are to use it.
— Joe DeBello, Vice President, OneDigital Retirement + Wealth
This new provision will allow businesses to help facilitate saving through the plan, helping their employees to be prepared in the event of an emergency. When employees feel cared for, they are more likely to stay with your organization. According to the Science of Care, 60% of workers would stay with a company for three or more years if they felt cared for. Being there for your employees to help them through emergencies can go a long way in fostering an employer/employee relationship.
If you would like to read the full MarketWatch article, please click here.
Want to learn more about SECURE 2.0? Check out this recent article: Joe DeBello Featured in 401(k) Specialist Magazine Discussing the Long-Term Impacts of Secure 2.0
Investment advice offered through OneDigital Investment Advisors, an SEC-registered investment adviser and wholly owned subsidiary of OneDigital.
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