The majority of Americans haven’t socked away enough savings to weather even a short-term emergency like car or home repairs, according to new research from the AARP that found dismal savings rates across income levels.

The AARP, which represents some 38 million Americans age 50 or older, said the savings shortfall should be addressed through workplace emergency savings plans.

“We find that workplace emergency savings accounts are an underutilized and potentially powerful tool for financial resilience,” said Catherine Harvey, a senior policy advisor at the AARP's Public Policy Institute and author of the AARP policy paper, entitled, “Unlocking Potential Emerging Savings Accounts."

As part of her study, Harvey looked at savings rates and found that a substantial portion of American workers across all income and levels would face a financial emergency if they were hit with sudden, unforeseen expenses, such as a major medical bill.

Research shows that employer-based interventions are effective in combatting the savings deficit and that plans should be designed to maximize participation by being easy to use, said Harvey.

"There's a lot of evidence from behavioral science about what makes employer-based interventions effective, and not surprisingly, one aspect of an effective program to maximize participation in an employee benefit is to make participation really easy," Harvey said.

To find out what would entice Americans to save in an emergency savings plan, AARP surveyed workers of a variety of income and age ranges about the types of features that would entice them to contribute to an emergency savings plan.

"Not surprisingly," Harvey said, survey respondents cited "the power of the employer match, which speaks to the incentive behind savings as being a very important feature—one that basically blows all of the other features out of the water."

That held true across the board, as even workers who reported strong savings rates independent of an employer plan said they would welcome matching funds.

"If there's a match ... people don't want to leave dollars on the table," Harvey said.

First « 1 2 » Next