Employer-Based Rainy Day Fund Could Help Employees Save for Retirement

A poll of about 2,500 adults by the AARP Public Policy Institute found three out of four employees were interested in a hypothetical payroll deduction that would hold employees' savings for withdrawal at any time without penalty, reports InvestmentNews . Financial stress and trust in the employer were cited as the chief motivators for participation, as opposed to income, age, or gender. According to the survey, an employer match would make 87 percent of workers more likely to participate. The program would automatically enroll employees and "nudge" them to save. The Federal Reserve estimated that four in 10 American households would be unable to come up with $400 in the event of a financial emergency. The AARP poll determined more than half of U.S. employers that do not offer financial wellness programs are uncertain of their value, while 26 percent of employees said they already save on their own. Also raised were issues about whether an emergency savings program would be necessary for workers who already set aside a portion of their paycheck, or might cut into a list of financial priorities such as planning for retirement or college. Experts said the program's effectiveness would be highly individual to the employee, and is likely more useful to workers for whom debt is not an issue.