Guess Which Americans Have the Lowest Level of Emergency Savings

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It's no secret that most Americans are behind on emergency savings. In fact, in a recent Bankrate survey, more than half of Americans said they don't have enough money to pay for three months' worth of living expenses, which is the minimum all working adults should have on hand for emergencies. But while that news may not come as a shock, here's some data that might surprise you: Of the various age groups surveyed, respondents aged 53 to 62 were the most likely to have no emergency savings at all.

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To be fair, plenty of workers in that age range are doing a good job of saving: 32% have enough money to cover a full six months of living expenses. But the fact that another 32% haven't set aside a dime for the unknown is downright disturbing. And if older Americans don't start prioritizing their emergency savings, they may run into serious trouble when retirement comes around.

Emergencies can happen to anyone

Let's be clear about one thing: No matter how secure your job might seem, or how great your health might be, you never know when you might get downsized, become injured, fall ill, or encounter any sort of scenario where you suddenly can't work for a period of time. Similarly, you never know when a whopper of a bill might fall in your lap, whether it's a medical expense or a home or vehicle repair. That's why it's crucial to keep some savings on hand.

Bankrate's study operates under the assumption that everyone needs a full six months of living expenses in an emergency account, and while this is undoubtedly good advice, some people can get away with saving a bit less. Some examples? Say you have no kids, you don't own a home, your job is steady and secure, and you live with a partner who also earns an income. Even if you can't work for a number of months, you'll still have some money coming in through your partner, and in the absence of a mortgage payment and kids who depend on you, there are more ways for you to cut costs.

Still, a safer bet is to accumulate enough savings to cover a full six months of expenses -- especially if you're in your 50s or older. According to research out of Boston College, workers 55 and over are the most likely to have a hard time finding new jobs if theirs are taken away. In fact, it takes workers 55 and older 40.6 weeks, on average, to find work again, compared to just 31.6 weeks for younger job-searchers.

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Of course, getting laid off isn't the only reason why you might need to access your emergency fund. But given that it can take a qualified older worker a solid nine months to become re-employed, having at least six months' worth of living expenses on hand is a pretty clear necessity.

A lack of savings can derail your retirement plans

Here's another reason why older workers need access to emergency cash: If you don't have any money in the bank, and you're forced to tap your retirement savings, you might end up falling short financially down the line.

Say you're forced to withdraw $10,000 from your IRA or 401(k) because you lose your job and don't have money in an emergency fund to pay your immediate expenses. While it might seem like a simple enough fix, that's $10,000 you won't have when you're retired and living on a fixed income. Furthermore, if you remove that money 10 years before you're set to retire, and your investments were otherwise generating an average return of 7% per year, you'll actually end up losing out on a total of almost $20,000 in retirement savings.

Keep in mind, of course, that any time you remove funds from a retirement plan prior to age 59-1/2, you'll face a 10% early-withdrawal penalty, unless you either have a Roth account or qualify for an exception. So if you're not saving for emergencies because you think you can access your retirement account as a backup, that's truly a bad idea.

A lack of emergency savings can also leave you with no choice but to charge a major unplanned expense on a credit card. If you carry that debt into retirement, those monthly payments will be a major drain on your limited income. You'll also increase your chances of joining the 20% of Americans who, sadly, end up dying in debt.

The best course of action is to work on building your emergency fund now, even if it ends up taking several years. To speed things up a bit, you can, and should, take a close look at your budget and find ways to cut corners, whether it's downsizing to a smaller living space, unloading a vehicle in favor of public transportation, or cooking at home to save money on restaurant meals.

No matter what changes you make, the key is to consistently filter money into your emergency account until you've reached that ideal six-month savings target. Otherwise, you'll be compromising not only your short-term financial security, but your retirement as well.

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