10:30 am EDT - 12:00 pm EDT

Past Event

How employer-sponsored rainy day savings accounts can help workers prepare for emergencies

Thursday, October 26, 2017

10:30 am - 12:00 pm EDT

Brookings Institution
Saul/Zilkha Room

1775 Massachusetts Avenue N.W.
Washington, DC

Many Americans live paycheck to paycheck, carry credit card debt, and have little or no money set aside for emergencies such as sickness, car or home repairs, job loss, or economic downturns. One consequence of this financial vulnerability is that many individuals use a portion of their retirement savings during their working years. Research suggests that for every $1 that flows into 401(k)s and similar accounts, between 30¢ and 40¢ leaks out before retirement. Helping American households build up their emergency savings would increase their financial security today and in retirement. A new working paper by John Beshears, James Choi, Mark Iwry, David C. John, David Laibson, and Brigitte C. Madrian explores the possibility of using employer-sponsored rainy day savings accounts to help workers prepare for an emergency.

On October 26, the Retirement Security Project at Brookings hosted a discussion on the practical considerations and challenges of these innovative employer-sponsored rainy day savings accounts. Following a presentation of the research by David C. John and Brigitte C. Madrian, a panel of experts reflected on these options and next steps for policymakers and employers.