Emergency Savings Accounts (ESA)
We know individuals struggle to adequately save and today’s inflation isn’t helping! Recent surveys showed approximately 40% of Americans would need to borrow money in some capacity (mostly credit cards) if hit with an unexpected bill of $1,000 or more. And, more than 30% of Americans withdrew or borrowed money from an IRA or 401(k)/403(b) during the pandemic – nearly two-thirds of which was used to cover basic living expenses.
The Secure Act 2.0 provided for numerous plan features that enhanced the flexibility for plan participants to access their retirement savings.
One of these unique services is the Emergency Savings Account. This feature allows you to save for unexpected events, while still ensuring that you are investing in your retirement. With 403b Partners, you can be sure that your financial wellbeing is in good hands.
1
Distribution Flexibility
No questions asked distributions! The ESA provides immediate access to your savings at any time for any reason!
Plus - NO Taxes and NO early withdrawal tax penalties, EVER!
2
Account Balance Limits
With increased flexibility comes restrictions. The IRS has limited ESA Account balances to $2500. Once you build up this amount, additional contributions will flow into a regular ROTH account. You can rebuild your account after taking a distribution.
3
Investment Safety
By law, ESA accounts must be invested in secure, stable principal investments that can't lose principal. These are money market or fixed account type accounts. Participants can be assured their Emergency Savings Account will be there when they need it.