A SecureSave survey of 1,028 workers conducted in June found that 55% do not have adequate emergency savings to cover a $500 expense. The findings underscore broader financial challenges facing employed Americans, with 41% of respondents reporting they had foregone necessary expenses including medical care, food, or vehicle repairs due to insufficient savings. Personal finance expert Suze Orman, co-founder of SecureSave, characterized the situation as representing heightened financial vulnerability among working households.
Federal Reserve data corroborates the challenge, with the central bank’s 2025 report on household economic well-being showing that 63% of adults could cover a $400 emergency through cash, savings, or credit card payment at the next statement. That proportion has remained unchanged for three years, following a decline from 68% in 2021. Meanwhile, broader economic pressures have intensified consumer financial strain. Annual inflation stood at 3.4% as of July, remaining above the Federal Reserve’s 2% target, while average gas prices exceeded $4 per gallon. Total household debt reached $18.8 trillion in the second quarter, with credit card balances approaching record highs at $1.26 trillion.
As financial pressures mount, retirement savers increasingly resort to hardship withdrawals. Vanguard data shows that 6% of defined contribution plan participants took hardship withdrawals in 2025, up from 2% in 2020. This trend has prompted concern from policymakers, with the Bipartisan Policy Center noting that retirement account withdrawals for non-retirement purposes represent a growing problem requiring solutions.
Congress addressed the emergency savings gap through the 2022 Secure 2.0 legislation, permitting $1,000 annual penalty-free withdrawals from 401(k) plans for emergencies and authorizing pension-linked emergency savings accounts with annual contribution limits. However, adoption remains limited, with only 4% of 401(k) plans offering the emergency withdrawal feature and PLESAs seeing minimal uptake due to regulatory delays. Meanwhile, separate workplace emergency savings accounts offered by providers including SecureSave, Fidelity, and BlackRock have gained wider traction among employers and employees.
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