“An emergency fund can boost peace of mind and financial confidence in long-term goals. In a report conducted by AARP, people with emergency funds felt 2.5 times more confident in their ability to achieve their financial goals than those who did not.”
Christine Benz, “What the Coronavirus Means for the Future of Financial Planning,” Morningstar, October 13, 2020
The Takeaway: Over half of U.S. households have no emergency savings fund at all, and are at risk of being severely disrupted by an unexpected medical, car repair, or other bill. Even households with higher levels of income can be caught unprepared, if they fail to plan for job loss or unforeseen events.
You can help build up your emergency reserves by directing a regular amount each paycheck to a savings or investment account. For people who qualify, a Roth IRA account can often do double-duty as an excellent emergency fund. Need help getting started? Check out these 4 tips on how to set up an emergency fund, or talk to us!