Americans Report Mixed Savings Progress

In a report just released by the American Savings Education Council nearly three-quarters of Americans (73%) report that they “spend less than their income and save the difference.” But little more than half of them (53% of all respondents) say they save at least 5 percent of their income, and only 28 percent say that they save at least 10% of their income. Experts urge people to save at least 10% of their income.

More than two-thirds (71%) report that they “have sufficient emergency savings to pay for unexpected expenses like car repairs or a doctor visit.” Yet, little more than half of those not retired (57%) say they are “saving enough for a retirement in which you will have a desirable standard of living.” An important reason for inadequate retirement savings is the failure or inability to “save for retirement at work through a 401(k) or other contributory plan,” which only 55 percent of the non-retired report having.

Self-reported savings habits also help account for inadequate saving progress.

o Only 62 percent of Americans have a “savings plan with specific goals”;

o only 49 percent have a “spending plan that allows you to save enough money to achieve the goals of your saving plan”;

o only 42 percent “save automatically through regular preauthorized transfers from checking to saving or investments”; and

o only 41 percent “save a portion of tax refunds, gifts, bonuses, or other financial windfalls.”

Relatively few Americans, however, report serious debt problems. Only 21 percent say their consumer debt is “growing” or “remains at the same level.” And more than three-quarters with mortgage loans (76%) say they “will pay off all mortgage debt before retirement.”

These findings are even more sobering considering the tendency of some Americans to report their savings habits and progress as positively as possible. “Hard data about savings behavior suggest that responses to several questions were buoyed by the personal optimism of respondents,” said Stephen Brobeck, Consumer Federation of America Executive Director and a leader in America Saves.

Source: American Savings Education Council

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