Wednesday, January 16, 2013

US Personal Savings Rate

I guess it's no surprise that I love finding new sources of data or interesting data related facts.  I great source of information is the Federal Reserve (particularly the St. Louis Fed).  Upon snooping around, I recently came across this data set which basically shows the U.S. personal savings rate since 1959.  The definition of the savings rate is all money put aside in savings (including retirement) divided by the after tax income. 

I found it a little concerning that the current personal savings rate was hovering just below 4%.  Taking into consideration an average inflation of 2-3%, and the average person only saves about 1-2% of their income each year for retirement.  Ultimately, this means that there are a whole slew of folks out there that are simply not ready for retirement.

Here are some tips for retirement savings:
1.) Save first then spend what you have
2.) Make a budget
3.) Track your performance
4.) Keep an emergency fund of at least 6 months were of spending
5.) Max out employer contributions in your 401(k)
6.) Start saving as early as possible
7.) Open an IRA or ROTH IRA if you are able.

Don't get yourself caught in the same situation as the rest of the US population...start saving for your future!

The other thing I found interesting with this data set is that until the mid 80's the average personal savings rate was about 8.5%.  Now, inflation was much higher then, but this was still a very robust number.  In the 1970's, people were saving aver 14%!

Wonderful Moment of the Day - January thaw!


  1. The current data in stated that the U.S. personal saving rate stood at 3.3% at the beginning of September 2012,Thank's for the tips. With the current status of our society nowadays we should be practical and make a personal saving.

  2. It can be tough to save money in today's world. Such high taxes, hopefully we can get our country back on track.