Federal workers burned through savings during government shutdown
There's ample research showing that the average American is ill-prepared to handle so much as a $500 car repair. Federal workers are no exception.
Despite having a higher savings rate than Americans as a whole, most U.S. government employees burned through all or some of their emergency funds during the recent 35-day government shutdown, according to findings released this week by Prudential Financial.
While the report highlights the impact of the government shutdown on a portion of the workforce, far more common events like job loss or pregnancy routinely disrupt income for Americans, the insurer noted. The anxiety that comes with uncertain finances also takes a physical toll and is linked to increased heart disease and death, other research shows.
"The recent government shutdown is a wake-up call for Americans and proves how vulnerable people are to income volatility," Jamie Kalamarides, president of Prudential Group Insurance, said in a statement.
Nearly half of the government workers who were furloughed or otherwise went unpaid during the shutdown fell behind on their bills, Prudential found in surveying more than 350 federal employees and contractors. More than a quarter missed rent or mortgage payments, while nearly a quarter cut back or skipped spending on medical expenses for themselves or family members.
Among federal workers, 61 percent had at least $1,000 in emergency savings when the shutdown started, 29 percent had less than a grand and 11 percent reported having no "rainy day" money. Twenty-six percent said they dipped into retirement accounts to get by, either by borrowing from their account or taking a distribution.
