40% of Americans can’t cover a $400 emergency expense; 25% have no retirement savings

40% of Americans can’t cover a $400 emergency expense; 25% have no retirement savings

We keep hearing the mainstream media talk about the improving economy and the falling employment rate, but beneath the headlines and talking heads, we’ve seen consumer debt continue to climb.


Because those who don’t have sufficient funds either have to borrow, the likely option, on in some cases sell something. This has increased borrowing at the expense of saving has tapped out consumers such that four in ten Americans can’t cover an unexpected $400 expense. Also in the report’s findings – 25% of Americans have no retirement savings whatsoever.

These data points have wide implicatons for the consumer led economy and serves as the latest proof point for our Cash-strapped Consumer investing theme.

“The finding that four-in-ten adults couldn’t cover an unexpected $400 expense without selling something or borrowing money is troubling,” said Greg McBride, chief financial analyst at Bankrate.com. “Nothing is more fundamental to achieving financial stability than having savings that can be drawn upon when the unexpected occurs.”

He’s also concerned about another finding in the report: fewer than 40% of adults think their retirement savings are on track.”

The burden is on us as individuals to save for our retirement,” he says. “Take control of your financial destiny by contributing to an employer-sponsored retirement plan such as a 401(k) via payroll deduction, or arrange automatic monthly transfers from your bank account into an IRA.”

More concerning are the 25% of Americans with no retirement savings whatsoever, according to the report.

Some of this may be due to the lack of employer-sponsored retirement plans, as well as people piecing together several part-time jobs, which may not offer benefits.

Source: 40% of Americans can’t cover a $400 emergency expense

About the Author

Chris Versace, Chief Investment Officer
I'm the Chief Investment Officer of Tematica Research and editor of Tematica Investing newsletter. All of that capitalizes on my near 20 years in the investment industry, nearly all of it breaking down industries and recommending stocks. In that time, I've been ranked an All Star Analyst by Zacks Investment Research and my efforts in analyzing industries, companies and equities have been recognized by both Institutional Investor and Thomson Reuters’ StarMine Monitor. In my travels, I've covered cyclicals, tech and more, which gives me a different vantage point, one that uses not only an ecosystem or food chain perspective, but one that also examines demographics, economics, psychographics and more when formulating my investment views. The question I most often get is "Are you related to…."

Comments are closed.