Emergency Savings Accounts Could Be Next Big Thing for Employers (1)

Fido needs surgery and that vet bill will be hefty. There’s money in my 401(k), so I’ll just use some of that. It won’t hurt, right?

When the need for emergency funds comes up, as it does for many Americans, taking a hardship withdrawal from the 401(k) plan can look like an attractive option. And that’s led to more and more people taking money out of retirement funds without paying it back. This is known as leakage.

A group of researchers will be exploring how leakage can be stopped if employers sponsor emergency savings accounts for their workers.

Employees may ...