An emergency fund is essential to your short-term and long-term wellbeing. Should unforeseen circumstances arise, having a reserve of funds can make the difference between getting through hard times and having your plans for the future completely uprooted. An emergency savings fund should consist of three to six months of your living expenses; those funds should be held in a savings account so that they can be easily accessed in an emergency situation.

Unfortunately, far too many Americans have too few funds set aside for emergencies—or have none at all. The recent COVID-19 pandemic has brought to light just how ill prepared most Americans are for such unforeseen emergencies as job loss and high medical bills. Merlin Insurance & Financial Services can help you to establish an emergency savings fund to provide you with a sense of confidence that you will be able to face whatever life throws your way.

Many employers now recognize the importance of encouraging their employees to strive for financial well-being. While retirement benefits like 401(k)s and contribution matching are key to helping your employees save for their retirements, many employers also want to provide employees with access to emergency savings.

There are a variety of ways in which your company can provide this benefit to your employees:

• Payroll deductions – Much like deductions for a retirement account, employees can opt for automatic deductions that will be contributed to a dedicated emergency savings account. In-plan options and sidecar solutions are two of the many deduction plans a company can offer.
• In-plan options – These emergency savings plans are provided as part of an existing retirement plan, discouraging employees from taking early distributions from retirement accounts in financial emergencies. Funds can be deducted to the retirement account, then moved to the emergency savings account later.
• Sidecar solutions – These options are independent from an existing retirement account, allowing employees to deduct a specified portion of their paycheck directly to an emergency savings fund.
• Whole life insurance – This type of insurance plan can accumulate cash value over time, which can be used in a financial emergency. If you elect to offer this type of life insurance, ensure your employees are educated on the best practices for leveraging the policy’s cash value.

Whether you’re striving to build your own emergency fund or want to help your employees achieve financial independence, Merlin can help. We provide the education, guidance, and resources you need to understand your options and take those first steps towards a more stable financial future.