Those of you working for an employer who offers various benefits—such as health insurance and access to a retirement plan—know you’re soon going to get pinged that it’s time to review your benefits for 2027.
I want you to actually open the email (or snail mail) and review everything carefully. Next week’s letter will offer strategies for dealing with the fact that your share of health insurance costs is likely to be higher next year.
But right now I want to focus on whether your employer has stepped up and is offering a benefit that can make it easier to build lasting financial security: the ability to automatically set some of every paycheck aside in a savings account that can be tapped for emergencies.
Can you set up your own emergency savings account? Of course! And many of you already have an emergency savings account you set up at a bank or credit union. But there are also many people who either don’t have one or struggle to consistently add money to an account they opened.
That’s where having it all done automatically through your workplace payroll system can be such a help. It’s why I co-founded SecureSave, which provides employers with the platform to offer an emergency savings benefit to their employees.
The good news is that more employers are offering workplace emergency savings accounts that automatically transfer money from each paycheck into a savings account. Some employers even make contributions to employees’ accounts, much like a retirement matching contribution.
But this benefit is still relatively new. If your employer offers a workplace emergency savings benefit, I say: great for you, and great for your employer. They get it! So many surveys over the past five or so years have documented how financially stressed workers are. And employers increasingly recognize that helping workers build emergency savings can be an important part of a financial wellness program.
So that is why I want you to check your benefits lineup for 2027. Is there an emergency savings account benefit? If this sounds like a benefit that would help you deal with financial stress and your employer doesn’t yet offer it, I would speak up. You and your colleagues should let HR know this is a benefit you would value and that you hope it gets serious consideration in the future.
What I hope you don’t hear is that the ability to take money from your retirement savings is enough help with emergencies. It’s not.
Current law allows up to $1,000 to be withdrawn from a retirement account for certain emergency personal expenses without the usual 10% early-withdrawal penalty. But that doesn’t make it free money. If the money comes from a traditional retirement account, the distribution is generally taxable income. And more importantly, every dollar you take out is a dollar that is no longer invested for your retirement.
My bottom line: Retirement savings are for retirement. You deserve a workplace plan that helps you save for emergencies in a separate account. Talk to your HR team today about offering SecureSave where you work. It could be one of the smartest financial moves you make.
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