Having a robust emergency savings fund could help people weather financial shocks, such as job loss during the COVID-19 pandemic, finds a new study from the Brown School at Washington University in St. Louis.
Having a robust emergency savings fund could help people weather financial shocks, such as job loss during the COVID-19 pandemic, finds a new study from the Brown School at Washington University in St. Louis.
“We found that for individuals who lost jobs, those with at least three months’ worth of emergency savings were significantly less likely to tap into their retirement savings early”, said Haotian Zheng, a Ph.D. candidate and lead author of an article published this month in the Journal of Consumer Affairs.
“Ultimately, this study emphasizes the importance of emergency savings in helping workers stay financially resilient during crises”, Zheng said. “Building and maintaining a sufficient emergency savings can help people protect their long-term financial security by reducing the need for premature withdrawals from retirement accounts during periods of unexpected income loss.
