Vestwell announced this morning it is launching a new Emergency Savings Account (ESA) offering, giving American workers a simple, tax-advantaged, employer-backed way to build financial security.
“Emergency savings accounts are a cornerstone of financial security, and we’re focused on expanding Vestwell’s offerings to meet the needs of savers across all income levels,” said Aaron Schumm, Founder and CEO of Vestwell. “With the average American having less than $1,000 in savings, many cannot afford to handle emergencies. This new offering aims to foster a culture of saving that will enable more Americans to prepare for immediate, unexpected needs while laying the foundation for long-term savings to secure their financial futures through retirement.”
Vestwell’s ESA is an after-tax savings tool that earns interest, giving employees quick access to funds without penalties or high-interest debt, ensuring they can respond to unexpected expenses or challenges with less fear of compromising their financial futures.
Thanks to a recent SECURE 2.0 provision which expanded access to workplace ESAs in 2024, Vestwell’s ESA is provided as a workplace savings vehicle, designed to fit seamlessly into an existing employer benefits package or as a stand-alone option. Vestwell’s ESA offers flexible enrollment and contribution options, ensuring maximum versatility for employers to design and provide the savings programs that best fit their business.
“The role of employers is crucial in making this a reality, especially during times of economic instability that increasingly affect the lives and livelihoods of Americans,” Schumm added.
2024 research from Empower found 37% of Americans can’t afford an emergency expense over $400, and almost a quarter (21%) have no emergency savings at all. In the press release touting its new ESA, Vestwell referenced Georgetown Center for Retirement Initiatives research showing that 53% of U.S. households have no emergency savings account. Meanwhile, a survey from Vestwell partner, the Bipartisan Policy Center, suggests that 60% of employed adults want access to an emergency savings account through their employer but only 21% offer this.
According to 2024 findings from Inspira Financial, 81% of employers offering emergency savings funds (ESFs) have seen a positive ROI. Another 76% say the benefit would set themselves apart from other companies.
“We believe that holistic savings solutions can have a positive impact on individuals and families. To achieve our goal of reaching those who have previously been excluded from savings opportunities, we are proud to offer access to our new Emergency Savings Account. In many cases, this is available to employers and savers at no additional cost,” Vestwell’s Schumm added.
Vestwell’s new ESA provides both an intuitive interface for savers and a customizable program design for employers. Employees will be able to contribute directly from a linked bank account and via employer payroll deductions—if their employer chooses to offer this functionality. Employer contributions are also customizable, allowing employers to mix and match incentive options to best support their workforce’s financial wellbeing. Advisors and employers can further elevate their workplace offerings by providing a financial wellness solution that enables employers to tackle one of the most pressing concerns in their workforce: economic security.
EDITOR’S NOTE: This article has been updated to reflect some changes in quotes from Aaron Schumm provided by Vestwell.
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