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Less Than Half of Americans Have Three Months of Emergency Savings, Survey Finds

Digilifetrends Published 5 min read

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  • Just 46% of Americans say they have three months of emergency savings, a six-point decline from 2021 that reverses a long-running increase.

    A young Black woman with curly dark hair sits at a desk in a well-lit room, looking stressed. She is wearing a light pink hooded sweatshirt over a white t-shirt. She holds a pen in her right hand and a document in her left, while her left hand is pressed against her forehead. On the desk are scattered papers, a pink calculator, and a white mug. The background shows a modern kitchen with white cabinets and a window.

  • The gap is sharp by age and income: 22% of people earning under $25,000 have a cushion, compared with 66% of those earning at least $75,000.

  • For retirees, lacking cash reserves can trigger taxable IRA withdrawals, a possible 10% early-withdrawal penalty, and forced selling during market downturns.

Fewer than half of Americans have enough saved to cover three months of expenses in an emergency, and the latest survey suggests that share is moving lower.

That can leave households vulnerable to costs most budgets do not anticipate, such as a broken furnace, a leaking roof, or an unexpected hospital bill. The figures show who has a cash buffer, why it has shrunk, and why the issue becomes even more important after retirement.

Emergency Reserves Are Smaller Than They Were

The FINRA Foundation conducts the National Financial Capability Study. In its latest survey wave, 46% of respondents said they had set aside rainy-day money to cover three months of expenses in the event of illness, job loss, an economic slowdown, or another emergency. That is down from 53% in 2021.

The decline ended a steady upward trend that began in 2009. The results come from the study's 2024 wave, which surveyed more than 25,000 adults.

A rainy-day fund is cash that can be accessed quickly without selling assets or borrowing. Three months of expenses is a common benchmark, and for the average household, it is a substantial amount. The Bureau of Labor Statistics put average annual household spending at $81,905 in 2025, which works out to about $20,476 for three months.

Age and Income Create Wide Differences

The portion of adults with three months of expenses saved varies significantly by age, according to the FINRA Foundation.

  • Ages 18 to 34: 36%

  • Ages 35 to 54: 40%

  • Ages 55 and older: 59%

Older adults have had more time to build savings, so they lead by a wide margin. Income plays an even bigger role. Only 22% of people earning under $25,000 have that cushion, compared with 66% of those earning $75,000 or more. When monthly budgets are already stretched, little or nothing is left to set aside.

Why Savings Buffers Have Been Shrinking

The broader savings picture points to another concern. The personal savings rate, which measures the share of after-tax income people do not spend, fell from 6.9% in the first quarter of 2024 to 4.1% in the third quarter of 2026, according to the Bureau of Economic Analysis.

That does not fully explain the earlier decline in emergency funds, but it does show how little income many Americans are setting aside. With less left over each month, rebuilding savings after a setback becomes harder.

Retirees Face Higher Costs When Emergencies Strike

Without a paycheck, every surprise expense must come from savings. Many retirees keep most of their money in an IRA, and withdrawals can be costly.

Traditional IRA withdrawals are taxed as income. In addition, anyone under 59½ generally owes an extra 10% tax, according to IRS Publication 590-B. A special emergency withdrawal can waive the 10% early-withdrawal penalty on up to $1,000, but ordinary income taxes still apply.

Selling investments at the wrong time adds another cost. If the market is down when the furnace fails, a retiree may have to sell assets at depressed prices just to raise cash. Those shares are then gone and cannot recover with the market. Keeping a separate cash reserve allows the portfolio to remain untouched until conditions improve.

How Retirees Often Set Their Target

Common advice starts with the income gap. Social Security and any pension already cover part of monthly spending, and the cash reserve is meant to cover a set number of months of the rest. Retirees often aim for more months than workers because there is no paycheck coming in to replenish the account.

For example, if monthly spending is $4,000 and Social Security provides $2,500, the monthly shortfall is $1,500.

Six months of that gap would equal $9,000.

Saving that amount over a year would require setting aside $750 each month. These figures are only an illustration, so they should be replaced with actual spending and benefit amounts. The approach works at any income level.

Where the Cash Should Be Kept

Many retirees divide the fund, leaving one or two months of expenses in a savings account for immediate access and placing the rest in T-bills or CDs that may earn a bit more.

One Simple Move to Make This Week

Fewer than half of Americans have three months of expenses saved, and the share is slipping. For retirees, a missing cushion can turn one repair bill into a tax bill and a forced sale.

A practical step is to open a high-yield savings account, review the rate on an existing account, and set up an automatic monthly transfer. Even a modest transfer can start building a buffer, helping keep an IRA untouched when the roof leaks.

Avoid These Retirement Mistakes Before They Hurt Your Future

One investing mistake can create major risks in retirement. Many investors fall into the same traps: being overly cautious, making big bets on supposed certainties, or paying high fees. Any of those missteps can put hard-earned savings at risk.

You can also learn the mistakes even experienced investors make, along with ways to avoid them, in this guide: 13 Retirement Mistakes and How to Avoid Them from Fisher Investments.

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