Institutional Affiliation: The Brookings Institution
|Building Emergency Savings Through Employer-Sponsored Rainy-day Savings Accounts|
with John Beshears, James J. Choi, David John, David Laibson, Brigitte C. Madrian: w26498
Many Americans live paycheck to paycheck, carry revolving credit balances, and have little liquidity to absorb financial shocks. One consequence of this financial vulnerability is that many individuals use a portion of their retirement savings during their working years. For every $1 that flows into 401(k)s and similar accounts, between 30¢ and 40¢ leaks out before retirement (Argento, Bryant, and Sabelhaus 2015). We explore the practical considerations and challenges associated with helping households accumulate liquid savings that can be deployed when urgent pre-retirement needs arise. Automatically enrolling workers into an employer-sponsored “rainy-day” or “emergency” savings account—terms that we use interchangeably in this paper—funded by payroll deduction could be a cost-effective w...
|Building Emergency Savings through Employer-Sponsored Rainy-Day Savings Accounts|
with John Beshears, James J. Choi, David C. John, David Laibson, Brigitte C. Madrian
in Tax Policy and the Economy, Volume 34, Robert Moffitt, editor