Taking care of your financial future is key. The following statistics and facts about personal savings rates in the US and around the globe 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 a national and global scale.
Top 10 Stats & Facts on Personal Savings Rates
- $2,000 was the median emergency fund balance in the US in 2020.
- In April 2020, there was a peak in the personal saving rate, reaching 33.7%.
- In 2020, D.C. had the highest average savings rate — 18.8%.
- $155,622 is the average amount of debt a person has in the US.
- Ireland has the highest savings rate in Europe.
- The current US savings rate (as of March 31, 2022) amounts to 6.20%.
- Illinois has the lowest debt-to-income ratio — namely, 17.4%.
- The total assets of a 529 plan reached $425 billion in 2020.
- Generation Z has an average debt amount of $16,043.
- The value of personal savings in the US reached 2.3 trillion in 2020.
General Overview of Personal Savings Rates
How did the rates change over the years, and what’s the current situation?
1. $2,000 was the median emergency fund balance in the US in 2020.
75% of Americans keep their savings in physical banks, 25.18% prefer online banks, and 23.06% of Americans use both physical and online banks.
When it comes to emergency funds, 51.13% of Americans have a special account only for emergencies, whereas 48.87% have a shared savings account.
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 second-highest rate of savings in the US — 13.2%.
This information was gathered from 1960 and showcased each decade until 2020. Since the historically low rates in 2005, 2006, and 2007, the saving rate reached a high of 12% in 2012, after which the numbers went down again.
The U.S. personal savings rate in 2019 amounted to a mere 7.6% until going back up in 2020, reaching 13.7%.
If anything, this gives us an overview of economic development over the decades.
4. In April 2020, there was a peak in the personal saving rate, reaching 33.7%.
What started at 8.3% in February 2020 skyrocketed to 33.7% in only two months. After the peak, the rate started dropping to 19% in June and 14.2% in December.
At the same time, the U.S. savings rate in 2021 amounted to 14.7% in February.
5. The value of personal savings in the US reached 2.3 trillion in 2020.
This was a record, compared to the previous years. For instance, the value of personal savings amounted to 1.2 trillion in 2019.
6. At the same time, the value of savings deposits in the US reached $10.63 trillion in April 2020.
Stats on U.S. savings show the value of savings deposits witnessed a steady increase over the years. Starting with $0.39 trillion in 1980, then to $0.92 trillion in 1990, $1.86 trillion in 2000, $5.27 trillion in 2010, and finally $10.63 trillion in 2020.
7. As of March 31, 2022, 6.20% is the average savings rate in the US.
According to FRED personal savings rate data, this is a huge decrease compared to March 2021, when the rate amounted to a staggering 26.60%.
8. 55% of Americans prefer regular savings accounts when it comes to retirement.
401(k) plans are the next most popular accounts among Americans (54%), followed by traditional IRA (20%) and Roth IRA (19%).
9. People between 20 and 29 have an average of $15,000 in their 401(k) savings.
Stats on personal savings rates show us that the average 401(k) balance for people between 30–39 amounts to $50,800. 40–49-year-olds have an average of $120,800, while 50–59 have a 401(k) balance of $203,600.
The 60–69 age group has the highest 401(k) balance — $229,100, followed by the 70+ group ($213,600).
10. $155,622 is the average amount of debt a person has in the US.
The typical American family owes $155,622, or roughly $15 trillion in total debt, including credit card bills, mortgages, car loans, student loans, home equity lines of credit, and so on.
This is important as the amount of debt directly influences the U.S. national savings rate, i.e., more debt means less money goes into savings, so it would be wise to learn a couple of saving techniques.
11. Generation Z has an average debt amount of $16,043.
This was a 67.2% increase compared to 2019. Worse yet, Millennials have an even bigger amount of debt — $87,448 (an 11.5% increase).
That said, Generation X takes the cream with the highest average debt — $140,643 (3.5% increase).
12. Only 4% of Americans had $20,000–$49,999 in their savings account in 2019.
As we can see from the U.S. saving rate 2019 data, 5% of Americans saved $5,000–$9,000 and $10,000–$19,000, respectively. 12% managed to save $1,000–$4,999, and 6% saved over $50,000.
Similarly, 24% of Americans had less than $1,000 on their savings account, and a staggering 45% had zero dollars on their savings accounts, which certainly increases chances of bankruptcy.
13. The total assets of a 529 plan reached $425 billion in 2020.
The personal savings rate (2020) wasn’t the only thing that witnessed an increase in the mentioned year. 529 savings plans also grew, reaching a total of $425 billion.
A 529 plan is a savings plan that’s created to help people pay for education. A 529 plan has two types — savings plans and prepaid tuition plans. Given that the average cost of college is pretty high, and let’s not forget the massive student loans, 529 plans can come in handy.
Personal Savings Rates by State
Which state has the highest/lowest savings rates?
14. In 2020, D.C. had the highest average savings rate — 18.8%.
The other four states that make up the top five are Washington (15.6%), Alaska (15.5%), Utah (15.5%), and Wisconsin (15.3%).
15. The state with the worst rate of savings (9.9%) in 2020 was Oklahoma.
West Virginia (10.2%), Arkansas (10.5%), Mississippi (11.2%), and Tennessee (12.2%) also found a place on the list of the worst states when it comes to personal savings rates.
16. The state with the lowest amount in retirement savings is Hawaii.
As of 2020, the average person in this state had put aside around $92,513 for their later years. Other states that had low retirement savings were Mississippi ($96,878), Utah ($101,052), Oklahoma ($114,453), and D.C. ($118,968).
17. According to personal saving rates, Massachusetts is the state with the highest retirement savings — an average of $287,518.
New Jersey takes second place, with an average of $274,267 in retirement savings. Illinois comes third, with an average of $245,575.
18. Illinois has the lowest debt-to-income ratio — namely, 17.4%.
D.C. (18.1%), New York (18.5%), Wisconsin (18.6%), Michigan (18.6%), and South Dakota (18.7%) follow close behind.
19. Iowa has the highest debt-to-income ratio — a whopping 31.9%.
High debt-to-income can also be seen in Maine (28.7%), Wyoming (24.9%), North Carolina (24.6%), Kentucky (24.4%), and West Virginia (24.2%).
Personal Savings Rate by Country
Which country has the highest rate of savings?
20. National pensions and health insurance significantly 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. In contrast, in the US, people have to rely on their savings in their later years.
21. Ireland is the country with the highest savings rate in Europe.
Ireland has a high GDP (57.6%) and even higher GDP per capita ($88,000). The country’s high savings rate is partially linked to the debt crisis in Europe.
Luxembourg is the second European country with a high savings rate (53.4%) due to its high GDP per capita ($121,000).
22. Macao is the country with the highest savings rate worldwide.
A former Portuguese colony, Macao, has an average income of $129,000 per person and a savings rate of 64.3%. The Republic of the Congo follows suit with a saving rate of 61.4%, whereas Qatar takes third place with 58.1%.
23. In the fourth quarter of 2020, the household savings rate in the EU amounted to 18.9%.
The numbers fluctuated each quarter, from 15.57%, 23.37%, and 16.11% in Q1, Q2, and Q3, to 18.9% in Q4 2020.
The saving rates were higher in almost every EU country during 2020 since the pandemic led to decreased consumption, which resulted in increased savings.
24. China has the tenth-highest savings rate worldwide.
This Asian country has a national personal savings rate of 44.9%. What’s more, in 2019, China had an average income of nearly $17,000, and high savings rates were a vital factor in the county’s economic growth.
More Factors to Consider When Trying to Save
Why are personal savings important?
25. Many politicians feel that consumer spending is more important for the economy than savings in times of economic decline.
(World Economic Forum)
However, the truth is that more savings mean more money is being invested, which results in better economic growth.
26. When it comes to the US savings rate, one of the most important moves has been creating 401k accounts.
(World Economic Forum)
401k plans are retirement savings accounts that employers create 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 the average personal savings rate in the US?
The average personal savings rate in the US is 8.98%. That said, the rates have fluctuated over the years, ranging from a minimum of 2.20% in July 2005 to a maximum of 33.80% in April 2020.
As of March 2022, the savings rate in the US amounts to 6.20%.
To calculate the savings rates, you need to deduct the amount of money from your disposable personal income.
What caused the U.S. saving rate to increase in April 2020?
The main reason was the coronavirus outbreak, which caused spending to decline by 13.6%. Since the start of the pandemic, the numbers have been fluctuating, from 8.3% in February and 12.9% in March to 33.7% in April 2020, when they finally started to drop until November 2020.
What is a good personal savings rate?
That would be 20% of your income after tax (unless you’re evading tax collection). Whether that saving is for retirement purposes, emergencies, or future healthcare expenses, depends on your unique situation.
This is not the average American savings at the moment, although it would make for a good milestone.
A theory called the “50/20/30 rule” says that you should spend 50% of your income (after tax deductions) on your needs, including your housing, food, and other 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 saves compared to how much they earn, rather than just giving it a dollar value.
This is an excellent way to see how much people are saving without looking at the specifics of how much they earn. People who make more will more likely be able to save more. However, they may be saving less of their disposable income.
What is a good savings ratio?
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?
You can access your money in two ways: by withdrawal and a transaction.
To withdraw your money, you need to visit a bank or use your ATM card (if the bank allows it). People with checking accounts can make withdrawals via their debit cards.
Likewise, having a checking account can help you transfer money out of your savings account. Keep in mind that you need to have a savings and checking account at the same bank.
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!