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That's according to a new study published by SimplyWise, a technology company that provides resources on Social Security and retirement, which found that 45% of workers who are furloughed or unemployed because of the COVID-19 crisis could not last a month off their savings. More than one-quarter – 26% – said they could not last two weeks off their savings.
Forty-two percent of Americans said they could not come up with $500 in cash right now without taking out a loan or selling something. That's up from the 38% recorded in May and 40% in July, the bimonthly survey showed. For workers furloughed or let go because of the pandemic, 63% said they could not come up with $500 in case of emergency.
As a result, more Americans are planning to tap their retirement savings: 14% said they will have to withdraw money from those accounts. A record 27% of respondents said they are planning an early withdrawal from their 401(k). The figure is even higher among people who lost their jobs this year at 49%.
The sobering statistics come more than a month after a series of financial protections Congress put in place with the passage of the $2.2 trillion CARES Act expired.
President Trump signed four executive measures at the beginning of August to replace some of the just-expired benefits, including partially restoring federal unemployment benefits at $300 per week. But states will only issue up to six weeks of payments to eligible workers, a spokeswoman for the Federal Emergency Management Agency, which is distributing the aid, said last week. In Arizona, the extra $300 a week has already come to an end.
Congress appears increasingly unlikely to pass another round of emergency relief before the Nov. 3 election, although Trump has reportedly considered issuing another series of executive measures, including extending jobless aid.
When the sweetened aid ends, the typical unemployment check will return to an average of $330 per week for most Americans.
Thirty percent of Americans saved nothing for retirement in the last year, while 56% saved less than $1,000. Only 44% saved more than $1,000.
The pandemic, which triggered an unprecedented shutdown of the nation's economy, caused the worst unemployment crisis since the Great Depression. Although the labor market has mounted a slow-but-steady recovery – the joblessness rate fell to 8.4% in August after employers hired 1.4 million workers – there remain 11.5 million more out-of-work Americans compared with February.
The study of 1,154 Americans was conducted between Sept. 8-10.