What is the biggest financial risk your team faces?
It’s not necessarily retirement or bankruptcy. It’s much more likely to be a $400 appliance repair.
A recent study by the Federal Reserve found that 44% of Americans could not manage an emergency expense of $400, and more than half don’t have an adequate rainy day fund (defined as three months’ worth of income). But you probably don’t need a study; cooperative professionals tell us all the time that they are concerned about employee savings.
Aside from the worry of not being ready for an emergency, employees facing this kind of “financial fragility” can struggle in many areas of their financial life:
- They may find it challenging to manage spending and budgets.
- They are more likely to carry debt, often on expensive high-interest credit cards.
- When an emergency strikes, they may tap their qualified retirement accounts, a move that typically incurs penalties and taxes.
We want to help you help co-op employees build up their savings. Financial planners broadly agree that a family’s first investment step should be to set up an emergency fund, so that is the #1 goal in our Guidance Center. We can help your team find the right investments for their situation, and we work hard to keep costs down and to carefully manage day-to-day risk.
We’ll also support your efforts to keep employees on course with posters or other educational materials.
Have a question or want more ideas to get started? Contact us and tell us what you think would work for your co-op.