Taking care of your financial future is key. The following statistics and facts about personal savings rates in the US, and around the world, help us understand just how important it is to save money. Whether it’s for retirement, emergencies that may yet arise, or a rainy day fund, saving money is the best way to ensure that you don’t run into financial difficulties later in life.
After all, saving and investing is the only way to look after your wealth in the long term. The following stats and facts will give you further insight into various savings rates on both a national and global scale.
Top 10 Statistics and Facts on Personal Savings Rates
- The latest information shows that the current rate of saving in the US is around 8.2%.
- The 1970s had the highest rate of savings in the US.
- $11,700 was the median household savings in the US in 2018.
- The average American 20-year-old is saving around 7% of their income for retirement.
- As of 2018, Kansas was the state with the best savings rate in the US.
- The state with the worst rate of savings was none other than Massachusetts.
- Delaware is the state with the highest retirement savings.
- Wyoming is the state with the least amount of money put away for retirement.
- Singapore is the country with the most money placed in savings.
- National pensions and health insurance greatly reduce the amount of money people save for retirement.
General Info Regarding the US Savings Rate
1. $11,700 was the median household savings in the US in 2018.
Still, take this with a grain of salt as a whopping 20% of US citizens (those in the lowest income bracket) have absolutely nothing in savings.
2. The rate of personal savings equals the amount someone saves as opposed to their earnings.
This personal savings rate definition comes up as a ratio of disposable income (after tax) and savings, which puts into perspective how much a person is saving. It’s, by far, the easiest way to calculate a savings rate.
3. The 1970s had the highest rate of savings in the US.
This information was gathered from 1960 and showcased each decade until 2019. If anything, this gives us an overview of the economic development over the decades.
4. The current US saving rate for 2020 is just 8.2%.
In the last five years, the highest this rate has ever been was 8.8% in February 2019, effectively highlighting that the average savings of Americans changes on a regular basis.
5. The top 1% have savings of around $1.1 million.
This just goes to show that the more a person earns, the more money they are able to set aside for savings; the reason being, most of their expenses are covered.
6. Looking at personal saving rates, the average American 20-year-old is saving around 7% of their income for retirement.
The average 401k of a person in their 20s has a balance of $11,800, but if you look at the median balance of 401ks of twenty-somethings, it’s more around $4,300. Planning for retirement should be a huge consideration — hence why the numbers are so troublesome.
7. Likewise, 30-year-olds in America are saving just 7.8% of their income for retirement, according to the current US savings rate.
On the other hand, the average American in their forties is saving 8.5% of their income towards retirement. The average saved amount by those in their thirties is $42,400, and for those in their forties — $102,700; a noticeable difference.
8. Naturally, the 60 age group saves the most for retirement — 11.2% of their income.
Likewise, those in their fifties take second place with 10.1%.
What’s more, the average US saving rate in a 401k plan for someone in their fifties is $174,100 and the average for a person in their sixties is $195,500; the more a person ages, the more they should have saved up for retirement.
9. $90,460 is the average amount of debt a person has in the US.
Also, the total amount of consumer debt in the US at the end of 2019 was around $14.1 trillion.
This is important as the amount of debt directly influenced the US saving rate in 2019; more debt means less money goes into savings.
10. Generation Z has an average debt amount of $9,593.
Worse yet, millennials have an even bigger amount of debt — $78,396, which is likely due to Gen Z being too young to acquire any real debt as of yet.
11. Generation X has an average debt amount of $135,841.
After Generation X, the average amount owed by each subsequent generation goes down. Baby boomers owe an average of $96,984, and the silent generation only owes around $40,925 in personal debt.
Personal Savings Rates by State
12. As of 2018, Kansas was the US state with the best savings rate.
The other four states that make up the top five are Iowa, Nebraska, North Dakota, and Washington.
13. From data gathered in 2018, the state with the worst rate of savings was none other than Massachusetts.
Hawaii, New Mexico, Wyoming, and New Hampshire also found a place on the list of the worst states when it comes to savings rates.
14. Delaware is the state with the highest retirement savings.
The people of Delaware had an average of $286,000 saved up for retirement according to the US saving rate from 2018.
15. The state with the second-highest amount in retirement savings is Alaska.
As of 2018, the average person in this state had put aside around $271,000 for their later years.
16. New Hampshire has the third-highest retirement savings out of all the states in the US.
In New Hampshire, the average personal savings rates were around $264,000.
17. Wyoming is the state with the least amount of money put away for retirement.
In 2018, the average person in Wyoming had just around $153,000 in retirement savings to look after them as they age.
Personal Savings Rate by Country
18. As of 2019, Singapore was the country with the most money placed in savings.
The Southeast Asian island-nation has an impressive economy that complements its high GDP growth thanks to the rapid industrialization back in the 1960s. As for their rate of savings, you will find that it is around 48%, which is nothing short of amazing when you look at the rest of the world.
19. Suriname is the country with the second-highest rate of savings.
This South American country has a national personal savings rate of around 48%, which is the equivalent of Singapore.
20. China has the third-highest savings rate on the planet.
Following China (in this particular order) are Nepal, the Philippines, Mauritania, Ireland, the Republic of Korea, Bangladesh, and Switzerland.
21. The US is, in fact, not on the list of countries with the highest savings rate.
In contrast to the aforementioned countries, the current US saving rate as of 2019 was a measly 7.6%.
22. National pensions and health insurance greatly reduce the amount of money people save for retirement.
For example, in Finland, there’s no real need for people to save up a substantial amount as they are taken care of in retirement, whereas in the US, people have to rely on their savings in their later years.
Other Factors to Consider Concerning the US Savings Rate
23. In times of economic decline, many politicians feel that consumer spending is more important for the economy than savings.
(World Economic Forum)
However, the truth is that more savings means more money is being invested, which results in better economic growth.
24. One of the most important moves when it comes to savings has been the creation of the 401k accounts.
(World Economic Forum)
401k plans are retirement savings accounts that are created by employers to help their employees prepare for their financial future. In short, employees can contribute to their 401k plan through automatic payroll withdrawal, and their employers then go on to match that amount.
What is a good personal savings rate?
That would be 20% of your income after tax (unless you’re evading tax). Whether that saving is for retirement purposes, emergencies, or for future healthcare expenses, depends on your unique situation. Still, this, in fact, is not the average American savings at the moment, although it would make for a good milestone.
There is a theory called the “50/20/30 rule” and it says that you should spend 50% of your income (after tax deductions) on your needs, which include your housing, food, and other basics essentials. Then, you should spend 30% on the things you want, including clothing and lifestyle choices.
Finally, you should save at least 20% of your income for the future.
How is the personal savings rate calculated?
It is calculated by taking the percentage of a person’s income (after tax) and showing the percentage of that income that is put aside in savings. This shows how much a person is saving compared to how much they earn rather than just giving it a dollar value.
This is a good way to see how much people are saving without having to look at the specifics of how much they earn. People who earn more will more likely be able to save more, however, they may actually be saving less of their disposable income.
What is a good savings ratio?
(Money Under 30)
A good savings ratio is about 20% of your income. This leaves more than enough money for the things you enjoy while still managing to save up for your future.
Likewise, this offers ample flexibility in terms of how you budget and makes it easier to decide what is worth spending your hard-earned money on. If you regularly put money away at the same rate each month, it becomes a daily part of your life.
How do I access my money when it’s in a savings account?
Accessing your money from a savings account depends on what kind of savings account you have. If the purpose of putting money in a savings account is to actually save it, you should be avoiding taking the money out until you achieve your goal.
For the most part, accessing money from a savings account is relatively easy and you can access it through online or mobile banking. However, if you’re withdrawing money from your savings regularly, you’re not allowing it to gather bank account interest, which is how you grow your money. Of course, bank savings rates are different for each bank, so it’s important to know yours.
At the end of the day, saving for the future is vital if you want to not only ensure your standard of living but also grow your wealth. The above-mentioned stats on personal savings rates show that Americans might not be saving as much as they should be, but there is still room for change. And that change has to start with you!