Americans Not Equipped for Rainy Days

December 6, 2001 ( - With the number of the unemployed continuing to rise as companies cut back to weather the first recession in over a decade, a survey finds that 41% of Americans do not have an emergency fund to cover three to six months of expenses.

This translates to 71 million Americans who do not have such a fund, according to a poll by Fidelity Investments.

Asked to list the sources that they’d tap in emergencies, those without rainy day funds cited:

· borrowing from family and friends,
· savings account, and
· a loan or distribution from workplace savings account or IRA.

While 92% of retirement plan participants know that there are taxes and penalties associated with early withdrawals, 54% don’t know that they could lose up to 46% of a distribution taken before age 59 1/2 to penalties and taxes.

The poll also found that three out of five American heads of households and/or their partners have either a workplace retirement savings plan or IRA or both,

· over a third have an IRA, and
· some 46% have an employer-sponsored retirement plan

The telephone survey comprised the responses of 888 heads of households aged 18 and older, living in private households in the continental US. Interviews were completed November 16-19, 2001.