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You might have seen the photo: It shows a mile-long line of cars on a New Jersey turnpike, one of the more well-off states. It's people waiting in line to get food from a food bank. The same scenes are being played out all over America, in California, Florida, Pennsylvania, Massachusetts, Texas. These are people who up until mid-March had been gainfully employed, paying their taxes, making their monthly mortgage payments.
"This is where Americans are now, financially," said Commonwealth Executive Director Tim Flacke in a webinar on the future of emergency savings, hosted by TPSU, DCIIA and SPARK, that also included AARP' Senior Strategic Policy Advisor David John, and Christine Lange, Prudential Financial's head of retirement business management and customers solutions.
The three discussed ways to look at emergency accounts, what features they must include, regulatory issues, and more.
1. No longer "Break Glass in Case of Emergency."
We saw a preview of such food bank distribution scenes during 2019′s federal shutdown, when moderate income federal workers missed one or two paychecks and were plunged into a financial disaster. Back then the idea of emergency savings was the metaphor of "break glass in case of an emergency" — emergency savings as the fire alarm switch or fire extinguisher placed behind glass and accessible only in a drastic situation.
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