Just over one-fourth (27 percent) of Main Street investors (with a net worth between $100,000 and $1 million, not including primary residence) do not feel that their household is saving enough to meet their financial goals, according to a first quarter Millionaire Corner wealth level study.
Do you have a rainy day fund? How long would you be able to pay your bills without a paycheck if you became sick, were unable to work?
For a majority (59 percent) of American workers, their emergency savings would run out in 12 weeks, according to a recent survey conducted by Cigna. Twenty-nine percent said they would use up their rainy day fund in a month or less.
The financial impact of a serious illness or injury is a concern for a significant majority of respondents (84 percent), while three-in-ten allowed that they worried about dipping in to their rainy day fund at least once a month or even more often. “Running out of money” was cited as the greatest fear about not having enough insurance if they or someone in their immediate family had a serious injury or illness.
Nearly six in 10 respondents (58 percent) reported they would be at some level of financial risk if they became sick and unable to work for a month. This is consistent with the U.S. Federal Reserve Board’s findings that 68 percent of adult Americans do not have savings set aside for emergencies.
Affluent investors realize the important of a rainy day fund and emergency savings, but their actions are lacking, according to a 2012 Spectrem’s Millionaire Corner survey. While respondents cited not having enough money in their senior years, needing to work longer than planned to retire comfortably, and having to ask children for money among their biggest financial fears, a scant 2 percent said that not saving for a rainy day was their biggest financial regret.
Just over one-fourth (27 percent) of Main Street investors (with a net worth between $100,000 and $1 million, not including primary residence) do not feel that their household is saving enough to meet their financial goals, according to a first quarter Millionaire Corner wealth level study. These concerns are highest among the those ages 45-54 (38 percent and those under 44 (36 percent). But they may be getting the message. In another Millionaire Corner survey, nearly half (48 percent) of respondents said they have or would be increasing their savings in light of the still struggling economy.
Where are U.S. workers looking for money in the absence of a rainy day fund? Nearly three-fourths (72 percent) of Cigna survey respondents said they consider their “personal savings” as their primary resource to help pay for unexpected expenses (young people were more likely than their older counterparts to say they would borrow from family or friends).
Half (53 percent) said they would explore options for borrowing or withdrawing from a 401k/IRA or other retirement savings.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.