Unlocking the Potential of Emergency Savings Accounts

A consensus is building around the understanding that liquid savings of between a few hundred and a few thousand dollars is a powerful buffer against unexpected financial shocks and their long-term consequences. To shed more light on the role of savings in households’ financial security, AARP analyzed data from a nationally representative survey of US consumers to identify factors related to whether a household has an emergency savings account. The report finds that emergency savings accounts are an underutilized and potentially powerful tool for financial resilience. We find the following: • Fifty-three percent of US households have no emergency savings account. • The emergency savings challenge is widespread and includes 51 percent of people over the age of 50 and people at every income level. • While no single savings goal is right for everyone, people with an emergency savings Catherine S. Harvey AARP Public Policy Institute