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Financial assets, not just income, are essential to economic security. Liquid assets, such as money in a bank account that is readily accessible, can keep households from falling into a harmful cycle of debt when they encounter unexpected events like car trouble or a job loss. Financial shocks like these are very common: in one study, 60 percent of households faced an expense or loss of income in the past 12 months for which they did not budget.

Among those in the labor force, older households are more likely than younger households to have some minimal level of liquid savings in a formal account, such as a checking or savings account. However, more than a third of pre-retirees—defined as households with members in the workforce who are between the ages of 50 and 64—have less than $2,000 in liquid savings. Low-income households are not the only ones that struggle to save; significant shares of middle-income pre-retirees also lack liquid savings. Black and Latino pre-retirees typically have lower liquid savings levels than White pre-retirees with similar incomes.