While 42 percent said they felt somewhat prepared to handle an unexpected cost of $5,000, only 18 percent felt very prepared. Image: Ariya J/Shutterstock.com
Having enough savings to cover an emergency overtook retirement savings as the number one financial worry in a recent survey of workers for the first time in that survey’s four-year existence.
The need for emergency savings was cited as a concern by 47 percent of the 1,500 workers surveyed by the Employee Benefit Research Institute, who were allowed to name any of five potential worries. Retirement savings was at 45 percent, tied with paying monthly bills.
That focus on short-term needs reflects that 41 percent said they had high concern about their household’s financial wellbeing, with 42 percent having moderate concern and only 17 percent having low concern. Most common causes of concern were the potential for a recession, inflation and the possibility of job loss.
In addition, 29 percent said their level of household debt is a major concern and another 47 percent said it is a minor concern.
While 42 percent said they felt somewhat prepared to handle an unexpected cost of $5,000, only 18 percent felt very prepared; nearly a third said they felt ill-prepared for an unexpected expense of even $500.
However, of those who felt they could handle an unexpected expense of $5,000, more than half said they would look to their retirement savings and other savings. Overall, more than half said their retirement savings plans are their only source for funding an such an expense.
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