37% of Americans can't afford an emergency expense over $400, according to Empower research

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Jul 02, 2024, 09:17 ET

60% of Millennials are stressed about a financial emergency striking

GREENWOOD VILLAGE, Colo., July 2, 2024 /PRNewswire/ -- Some 37% of Americans can't afford an unexpected expense over $400, and almost a quarter (21%) have no emergency savings at all, according to new Empower research.

"Not all surprises are good, and people know it. The study suggests financial precarity at a time when household finances may be stretched due to rising prices and inflation," says Rebecca Rickert, head of communications at Empower. "Life happens, and people are stressed about the surprise expenses that could tip them off-balance."

In fact, 1 in 4 (25%) people dipped into emergency savings to cover basic living expenses in the past year. The median emergency savings for Americans is $600; men have double the stores compared to women – with a median of $1,000 versus $500.

For 62%, having a dedicated emergency savings is a priority, yet nearly half (47%) of people say regular monthly expenses are too high for them to put money away.

Americans agree that being able to weather unexpected financial needs creates a sense of Financial Happiness, and many are taking steps to plan for the unplanned.

Despite economic hardships, nearly half (43%) of Americans (and 51% of Baby Boomers) have contributed to their rainy-day fund within the past year – though just 14% contribute regularly.

There may be a silver lining: 34% believe they could handle any emergency expenses that arise.

More key findings:

Ready or not: Over half (54%) report stressing about paying if and when disaster strikes, with Millennials (60%) worrying the most.
Feeling the squeeze: Rising prices (57%) are keeping Americans from building up their emergency funds.
Emergencies of all sizes: Roughly 1 in 5 have had to dip into their funds for car expenses (21%), home repairs (21%), and medical expenses (19%), debt payments (17%), and job loss (10%).
Debt dilemma: Paying down debt is a higher priority than saving for an emergency for 57% of Americans.
Cash stash: 30% of adults keep their emergency nest egg in cash and many are using a high-yield savings account to help their money grow (33%).

Visit The Currency™ to read Empower's full research report, "In Case of Emergency."

*ABOUT THE STUDY
The Empower "In Case of Emergency" study is based on online survey responses from 1,192 Americans ages 18+ fielded by YouGov from April 12 – 15, 2024. The survey is weighted to be nationally representative of U.S. adults (aged 18+).

ABOUT EMPOWER
Empower, a leader in financial planning, investing, and advice, is dedicated to creating financial freedom through people and technology. It administers approximately $1.6 trillion in assets for more than 18.6 million individuals¹ and is recognized as the nation's second-largest retirement services provider² by total participants. Connect with us on Empower.com, and subscribe to The Currency™ for the latest money news and views shaping how we live, work and play.

Media contacts:
Rebecca Rickert [email protected]
Katelyn Kwiatkowski [email protected]

1 As of May 2, 2024. Assets under Administration (AUA) refers to the assets administered by Empower. AUA does not reflect the financial stability or strength of a company.

2 Pensions & Investments 2022 Defined Contribution Survey. Ranking measured by total number of participants as of September 2022.

Empower refers to the products and services offered by Empower Annuity Insurance Company of America and its subsidiaries. This material is for informational purposes only and is not intended to provide investment, legal, or tax recommendations or advice.

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SOURCE Empower