Workers earning low to moderate incomes (LMI) regularly experience financial insecurity. The COVID-19 pandemic exacerbated vulnerabilities, and recovery from the economic disruption has been challenging, uneven, and unpredictable. We are seeing over time the crucial role of emergency savings in building economic security.

Commonwealth and DCIIA RRC recognized the COVID-19 pandemic as a unique window for exploring the relationship between retirement savings and emergency savings, and initiated a two-phase research project. We conducted five waves of surveys of participants in defined contribution workplace retirement plans and interviewed nine of the largest plan recordkeepers and seven plan sponsors. The second phase involved an additional survey plus focus groups to discern how emergency savings solutions could best meet the needs and interests of workers earning LMI.

Our research demonstrates the significant benefits employees can gain when companies and retirement savings providers partner to offer emergency savings opportunities, and provides insights into steps employers and recordkeepers can take now and going forward.

This work was made possible thanks to the generous support of BlackRock’s Emergency Savings Initiative.