Employees without emergency savings are 2X more likely to tap retirement funds
Fidelity Investments has released new data showing how financial stress, driven by rising living costs, continues to weigh heavily on American workers. Nearly 3 in 4 employees cite the cost of living as a major concern, and almost half admit they don’t have enough emergency savings to handle everyday financial surprises.
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“Many people assume emergency savings are for big life events,” said Kirsten Hunter-Peterson, Vice President of Workplace Thought Leadership at Fidelity Investments. “But often, it’s the small, unexpected costs—like replacing a phone or buying new tires—that throw budgets off. When employees have a cushion to manage these, they feel less stressed and more focused at work.”
The lack of emergency savings has also led many employees to dip into retirement funds. As of 2024, about 5% of employees have taken hardship withdrawals, more than double the rate from 2018. This trend threatens both financial stability and long-term retirement security.
Recognizing the growing impact, employers are stepping up. Financial stress costs U.S. businesses an estimated $183 billion in lost productivity each year. To combat this, many organizations are introducing emergency savings programs to support employee well-being.
“Emergency savings aren’t just a perk—they’re a necessity,” said Emily Kolle, Vice President and Head of Fidelity Goal Booster℠. “Having a simple way to handle everyday financial surprises can significantly improve how employees feel and perform at work.”
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One example is Houston Methodist, which implemented Fidelity’s Goal Booster℠ program to help employees build personal savings. “It’s an easy, accessible way for our employees to save,” said Janay Andrade, VP of Total Rewards. “The feedback has been incredibly positive.”
Fidelity’s Goal Booster offers a user-friendly, digital experience that helps employees set savings goals, open accounts, and track progress with motivational tools. Early results show that employees using the platform take fewer hardship withdrawals, preserving their retirement funds and improving financial confidence.
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With 69% of employers planning to expand financial wellness benefits in the next few years, emergency savings programs are becoming a cornerstone of modern workplace support—helping employees feel secure, focused, and ready for the future.
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Source : businesswire