Retirement Readiness

Majority of Americans Are Saving, But Most Lack a Financial Plan

Average  rainy day fund is $46,362, but for 30%, that'll last about 1 month

CHICAGO, ILLINOIS–(Marketwired – May 28, 2015) – BMO Harris Premier Services today released their Rainy Day Study, which examines how Americans are saving and planning for their future.

The study, which was conducted by Pollara, found that:

  • Sixty nine percent of Americans said their current rainy day fund would last less than a year, with 29 percent reporting it would last one month or shorter. Only 20 percent were confident it would last longer than one year.
  • For those with rainy day funds, the average rainy day fund was $46,362, with men having more savings than women ($58,061 compared to $33,558, respectively).
  • Only half of respondents reported saving in a systematic manner, i.e. contributing from each paycheck.
  • Eighty-eight percent of respondents reported that retirement was a financial priority for them, yet 21 percent of respondents said they would need to use retirement savings in a financial emergency.

No Dipping

"Dipping into a retirement fund should be the last resort. Not only are there financial penalties for liquidating those accounts early, but also that money that will be missed – even if retirement is 30 or 40 years down the line," said Alex Dousmanis-Curtis, Head U.S. Retail Banking, BMO Harris Bank.

"It's important to build a rainy day fund that can be used in an emergency without having a negative impact on retirement. Working with a financial advisor can be an effective way to develop a plan that will keep you afloat in a financial emergency."

Further, the study explored rainy day fund concerns, as well as what Americans have actually had to use their rainy day funds to cover:

  • Medical expenses (60 percent) were what respondents were most uncertain their rainy day fund would be able to weather. This was closely followed by medical needs for immediate family (56 percent), major car repairs (53 percent), and unexpected home repairs (50 percent.)
  • Three quarters of the respondents have dipped into their rainy day fund (76 percent), with unexpected repairs (car 31 percent, home 28 percent) cited as the most common reasons.
  • While one quarter of the respondents paid back the money they took out of their rainy day fund within two months and an additional 30 percent within three to six months, one fifth never paid back their rainy day fund.

Majority of Americans Don't Have a Financial Plan

The study also found that, while three quarters of the respondents report having 'put thought into their future', more than a third reported that this was only a 'strategy', not an actual plan.

Not surprisingly, only one-in-three Americans feel that their 'strategy' is doing a good job getting them where they want to be. In fact, the majority (57 percent) do not have a written financial plan. A financial plan outlines personal and financial goals and the steps needed to achieve them.

only one-in-three Americans feel that their 'strategy' is doing a good job getting them where they want to be

Goals can include saving and investing, purchasing a home, continued education, leaving a legacy, protection from unexpected events, starting a small business, career change, saving for a child's education, and planning and maximizing income in retirement.

"A well thought-out and written financial plan can benefit anyone who has goals which require funding and is seeking a roadmap to help achieve them," said Mike Miroballi, President, BMO Harris Financial Advisors. "Going through the financial planning process with a professional can help you identify your short and long term needs, what you need to save and what you need to do to reach your goals. Ultimately, a financial plan should provide you with more security and confidence about your finances."

*Survey results cited in this report conducted by Pollara, are from online interviews with an online sample of 3,163 Americans 18 years of age and older, conducted between January 16th and 21st, 2015. As a guideline, a probability sample of this size would yield results accurate to ±1.7%, 19 times out of 20. Data has been weighted by region, gender, and age, based on the most recent Census figures, so that it is representative of all adult Americans.

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 About BMO Harris Premier Services
BMO Harris Premier Services represents a combined service approach of BMO Harris Financial Advisors and BMO Harris Bank, each a part of the BMO Financial Group. BMO Harris® is a trade name used by BMO Harris Bank N.A. and its affiliates. BMO Harris Premier Services includes banking deposit and loan products and services provided by BMO Harris Bank N.A. Banking products and services are subject to bank and credit approval. BMO Harris Bank® is a trade name used by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank does not provide legal or tax advice.

About BMO Harris Bank
BMO Harris Bank provides a broad range of personal banking products and solutions through more than 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. For more information about BMO Harris Bank, go to the company fact sheet. Banking products and services are provided by BMO Harris Bank N.A. and are subject to bank or credit approval. BMO Harris Bank® is a trade name used by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and CDN $633 billion in assets (as of April 30, 2015).

About BMO Harris Financial Advisors
BMO Harris Financial Advisors, Inc., offers a comprehensive range of investment advisory products that include financial planning strategies and estate planning strategies, insurance and brokerage products and services, to meet the financial needs of mass affluent clients. Offices are located throughout the U.S. Learn more at